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Not posting FLSA notices means unlimited liability

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in Office Management,Payroll Management

For want of a thumbtack, the Fair Labor Standard Act’s (FLSA) statute of limitations didn’t run.

Upshot: An employer that normally would have been liable for three years’ worth of willful FLSA violations may be on the hook for violations stretching back 11 years. (Cruz v. Maypa, No. 13-2363, 4th Cir., 2014)

The statute of limitations tolls for thee. An employee from the Philippines began working in the United States as a domestic worker in 2002. During that time, she put in 18-hour days, was paid an average of $250 a month and was required to sign false time sheets and endorse paychecks that she never received. She left this employment in 2013 and sued for 11 years of FLSA violations. Her employers wanted the case dismissed, citing the three-year statute of limitations for willful violations of the FLSA.

A federal trial court dismissed the case, but a federal appeals court put it back in play, ruling for the first time that the FLSA’s statute of limitations may be tolled, or prevented from running, when an employer fails to post required notices.

Appeals court: The purpose of the notice posting requirement is to ensure that employees are aware of and able to assert their rights. Since the FLSA didn’t impose any penalties on employers that didn’t post notices, the court reasoned that without tolling, employers wouldn’t have any incentive to comply with the law. The court sent the case back down to the trial court for further proceedings.

POST IT NOTES: Don’t let the facts of this case fool you—employers of domestic workers are covered under the FLSA just like your company. Notice posting under the FLSA isn’t a minor concern anymore. You can post notices online, but be aware that the Department of Labor has yet to conclude that online posting meets the FLSA’s standards.

Your best bet: Continue to post paper notices in a conspicuous area where employees can see them.

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