The Department of Labor recently obtained nearly $4 million in back wages for gas station employees in New Jersey. Raceway Petroleum and its individual owner will pay $1.95 million in overtime compensation and $1.95 in liquidated damages to over 700 former and current employees. The judgment arises from a 2006 class action lawsuit filed by the DOL that alleged the gas station failed to keep accurate time records and failed to pay overtime for obviously non-exempt employees. Over twenty five current and former employees testified in a three week jury trial. In addition to its hefty financial obligation, Raceway must also provide extensive training on compliance under the FLSA.
This case highlights several important points for employers. First, the DOL means business when it comes to FLSA violations. In the words of Secretary of Labor Hilda Solis, this case “should send the message that the Labor Department will not tolerate employers that do not comply with the law in violation of worker rights.” Second, it is incumbent on employers to meticulously record hours worked. The failure to do so can be devastating. At trial, employees testified to working 100 hour weeks, and the employer had no means to disprove the testimony. Third, personal liability can attach to FLSA violations. Finally, wage and hour training should be a priority. Better to do it proactively than to be ordered to do it by a court.
For more thoughts on the state of wage and hour law and best practices in avoiding liability, take a look at Jon Hyman’s post yesterday on wage and hour audits.