The DOL’s Database of Investigations on Compensation

In a recently posted database, the federal Department of Labor (“DOL”) has allowed the public to see the companies who have been investigated for various violations of the laws the DOL enforces, including overtime violations, minimum wage violations and independent contractor violations.

I quickly scanned the records just for 2014-2015. During that time, more than 35 Amarillo businesses were investigated. Some employed just three or four people. Others employed more than 100. But there are some visible trends in the local DOL investigators’ handiwork.

Local preschools were put under the microscope because they often pay their teachers on salary rather than hourly, resulting in frequent Fair Labor Standards Act violations. Amarillo and Canyon hotels are a favorite target, often because they pay housekeeping personnel by the room, rather than by the hour. Amarillo restaurants were repeated targets because of common violations of the tip wage credit, which allows restaurants to include tips in the calculation of whether their employees are making minimum wage or because the restaurant paid employees on salary. Local construction companies, heating and air companies and plumbers showed up on the investigation list probably because their blue-collar workers were not paid overtime correctly, weren’t paid for their travel time, or were put on salary as supervisors when they regularly  performed labor that should have been paid hourly.

Other industries that were affected by the DOL’s local efforts in the last year included home healthcare, landscaping, retail, trucking, medical, automobile service and online companies.

What can you do in your business to assure that you are paying your employees correctly? This is a very complicated area of the law, but here are some quick generalities:

  • Pay almost all of your employees by the hour and pay each one overtime wages if the employee works more than 40 hours in any one 7-day workweek.
  • Don’t pay anyone on salary unless that employee is earning at least $455 per week (an amount we expect could almost double later this year under new FLSA regulations).
  • Don’t pay anyone on salary unless you have had your employment lawyer perform an exemption analysis to determine if one of the very narrow exemptions applies to that job. Job titles such as “assistant manager”, “inside or internet salesperson”, “legal assistant”, “working foreman” and similar titles are going to invite DOL scrutiny. Your lawyer will review the actual duties in detail and not rely on the assigned title to see if you can legally pay any of your employees on salary.
  • Don’t pay anyone as an independent contractor (“contract labor”, “day labor”, “cash employee”, “owner/operator”) unless you have had a very long talk with your employment lawyer about that employee. There are numerous and onerous criteria that have to be met for a worker to actually be an independent contractor and rarely have I found a local business that can meet the tests. This is an area that is being very closely scrutinized by the DOL , the IRS and the TWC.

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