Employers that underpay employees in violation of the Fair Labor Standards Act’s overtime provisions are generally liable for two years’ worth of back pay. These are then doubled as punishment for getting it wrong.
If the violation is willful, that adds another year of unpaid wages to the tab, which is also doubled. That’s a 50% bonus for the employee.
If your lawyers have told you that you have misclassified an employee, ignoring that advice can be used against you. The opinion becomes evidence of a willful violation, making the employee eligible for the bonus payment.
Recent case: Robert worked for a sports car racing team, building and maintaining the cars, helping run the team’s shop and coaching its driver.
After Robert was fired for insubordination, he sued, alleging that he had been misclassified as exempt.
He asked for back pay going back three years instead of the standard two. The reason? He believed that his employer’s violation was willful.
And as part of the evidence of that willfulness, he discovered that the team owner had ignored written legal guidance from its attorney. The memo included an opinion that the team’s mechanics should be classified as hourly employees and not as exempt administrative, executive or professional employees.
The company argued that failing to follow its attorney’s advice wasn’t evidence that it acted willfully.
The court said whether the team acted willfully or not could go either way. Since that was the case, it ordered a trial. Now a jury will decide the matter after hearing all the evidence, including the lawyer’s opinion letter. (Johnson v. Derhaag Motor Sports, No. 13-CV-2311, DC MN, 2014)