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Turn to legal or immigration experts when facing wage-and-hour complexities

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in Compensation and Benefits,HR Management,Human Resources,Leaders & Managers,Management Training

The federal Fair Labor Standards Act (FLSA) and the North Carolina Wage and Hour Act are complex laws that are tough to master. It would require an HR director’s full-time attention to make sure a midsize company wasn’t breaking the law. Adding to the intricacy, the U.S. Department of Labor frequently issues updates and opinion letters.

Even so, ignorance is no excuse for violating wage-and-hour laws. In fact, those who “bury their heads in the sand,” as one court put it, face steep penalties. Those include double damages for any wage mistakes, plus back pay for an additional year in excess of the two years of back wages that are usually due.

So, what’s a diligent HR professional to do? If you don’t face any unusual wage-and-hour issues (that is, you pay at least the minimum wage, don’t make deductions for equipment or housing and employ mostly hourly employees or FLSA exempt employees who fit neatly into the exemptions allowed), you can probably stay up-to-date by reading newsletters such as this one and calling an attorney when you hit a puzzling problem.

On the other hand, if you employ seasonal labor, import employees from other countries and make deductions for their equipment and transportation, you may want to hire an expert in visas and seasonal labor.

That’s what saved one employer from double damages and an extra year of liability.

Recent case: Mercedalia Garcia and other employees from Mexico sued Frog Island Seafood for various alleged wage-and-hour violations under both the FLSA and North Carolina law.

The employees were admitted under a special visa program as temporary foreign workers to work as crab pickers at Frog Island Seafood’s processing plant.

The company hired a 12-year veteran of managing seasonal visa workers to handle the details, including getting the visas approved and managing the actual work.

The employees sued, alleging that they should not have had to pay out-of-pocket to travel from Mexico to North Carolina, including border-crossing fees. Nor, they said, should they have borne the expenses for knives they used on the job. Those costs, they argued, brought their pay below the minimum wage.

The court went through each claim carefully, looking to see if the company could reasonably have known whether it should or should not have paid for the expenses in question. Because the state of the law had been in flux and new rules came out after the employees arrived, the court said the company hadn’t willfully violated the law, although it was liable for some back pay.

The big question, however, was whether the company was liable for double back pay for three years rather than regular back pay for just two years. The court said because the company had hired an expert to navigate a complex set of laws, it didn’t have to pay double damages or for the extra year. (Garcia, et al., v. Frog Island Seafood, No. 2:06-CV-46, ED NC, 2009)

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