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Wage and Hour Violations Can Cost You

Keeping track of all the Department of Labor’s (DOL) wage and hour rules can be challenging. But, if a DOL investigation determines that your workplace failed to follow the rules set out by the Fair Labor Standards Act (FLSA), the outcome can cost you big time! Since 2016, the DOL has conducted over 25,000 investigations and recovered more than $195 million in back wages for more than 195,000 employees. Make sure to review your business’s practices to avoid these consequences!

DOL Finds Franchise Operator With Multiple FLSA Violations

The DOL recently investigated 11 Menchie’s Frozen Yogurt franchise locations in Washington and Oregon all owned by the same operator. In a news release from February 1, 2022, the DOL announced finding multiple FLSA violations across the locations including:

  • Store managers illegally taking portions of employees’ tips
  • Employees working more than 40 hours a week without being paid overtime
  • Inaccurate records of employees’ hours worked
  • Minors illegally operating trash compactors

These violations are going to cost the operator $96,973 in back wages owed to 330 employees.  Additionally, because the DOL found at least some of these violations to be willful, the operators will owe the DOL $19,736 in civil penalties. Altogether, these preventable violations will cost the operator $116,709!

FLSA Compliance Reminders

Although the violations at the Menchie’s locations were willful, business owners can—and sometimes do—violate the FLSA without even realizing it. Accidental violations can still cost you during a DOL investigation. It is important to periodically review your business practices to make sure you are meeting the FLSA’s standards. Be sure to:

  • Keep accurate records of your employees’ hours.
  • Follow all child labor standards in the workplace.
  • If you implement tip pool, make sure to use one of the proper policies. For more guidance, check out our recent article on legal tip pool arrangements.
  • Never allow managers or supervisors to take part in a tip pool.
  • Check your tipped employee policies to make sure you are complying with the latest rules for using the tip credit. Our legal update on the 80/20 rule and 30-minute rule can help you comply.

Complying with the various wage and hour rules can be difficult and downright confusing. If your workplace needs assistance complying with these rules, our business and labor and employment teams are experienced in this area of law and happy to address any questions you have.

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At Fahey Schultz Burzych Rhodes PLC, we’ve been helping municipalities, franchised businesses, employers, and more with their legal needs since 2008. We’d love to learn how we can help you, too.