Department of Labor Steps Up Enforcement of Overtime Rules

By Bowen, Bill | Pittsburgh Post-Gazette (Pittsburgh, PA), April 12, 2012 | Go to article overview

Department of Labor Steps Up Enforcement of Overtime Rules


Bowen, Bill, Pittsburgh Post-Gazette (Pittsburgh, PA)


DALLAS -- In January, 252 workers employed through a Dallas- based temporary service won $244,000 in overtime back wages owed because they had been misclassified as exempt from U.S. wage and hour laws.

Temp Team Inc. workers had been placed at Nieman Printing and elsewhere, and some had worked as much as 79 hours a week without overtime pay, according to the U.S. Department of Labor. Who was responsible for the misclassifications is a matter of an ongoing legal dispute between Temp Team and Nieman Printing.

That back pay award came only a few weeks after 280 juvenile detention workers in Granbury and Rockdale, Texas, got $159,000 for unpaid overtime. Their employer, 4M Youth Services, had required attendance at pre-shift safety meetings but did not pay the officers for that time.

In the years since high-profile lawsuits against Wal-Mart, Target and other retailers, a wave of unpaid overtime enforcement actions and lawsuits has cut a wide swath across a variety of industries, including technology and banking companies. Less than a year ago, AT&T paid $12.5 million to settle a lawsuit brought by a group of information technology workers; in recent years, IBM settled a case involving 32,000 employees for $65 million and game maker Electronic Arts settled a suit for $14.9 million.

As the economy tumbled, the number of Fair Wage cases investigated by the Labor Department has boomed. Nationally, Labor investigated a record number of wage and hour cases, most of which are for unpaid overtime.

It's not just the federal agency, either. More workers are suing their current or former employers for back wages, too.

Several theories have been put forth for the increases: a bad economy pushing companies to cut corners on their labor costs; significantly increased funding and enforcement at the Labor Department; and a complicated set of laws and workplace circumstances that may make it difficult for employers to understand the rules.

The various explanations have a common touch point, many involved in the cases say.

"Technically, somewhere between 60 to 80 percent of all employers in the United States are not in compliance with the Fair Labor Standards Act," said Mike Royal, a lawyer who represents employers in such cases at the Dallas law firm of Fisher & Phillips. "The law is convoluted and complicated, and [employers] are just busy and don't understand it.

"If you are doing what you should be doing to avoid these problems, to understand the law and train your managers, you don't have the problem. Most of this is a training issue."

Another perspective is that the Fair Labor Standards Act, passed in 1938, was built for a workplace that no longer exists. Gone are clear lines of demarcation between manager, hourly employee, administrative worker and the outside salesperson, designations that help define whether a worker is exempt from the wage and hour protections.

Instead, today's workers are more likely to work flexible hours, to telecommute, to be attached by electronic device to their office responsibilities wherever they happen to be -- and at whatever time they may be needed. In today's economy, they are also more likely to be placed by a temporary employment agency or working as an independent contractor.

"There's no doubt that people still need to be paid the time they have been working," said Steve Fox, a workplace lawyer who represents employers at the Dallas firm of Fish & Richardson. "What has become more challenging is keeping up with the number of hours that people work because they so often work remotely, and the exemptions that were adopted by Congress and the Department of Labor have not kept up with the realities of the workplace."

The reality is that the most vulnerable workers are often the ones affected, said Barry Hersh, a Dallas lawyer who represents both employers and workers. …

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