"Off the Books" Payroll Practice Costs Employer
Incorrect, as a Michigan contractor recently learned. The DOL's Wage and Hour Division (WHD) announced a settlement of almost $84,000 in unpaid overtime and liquidated damages for 19 employees of Den-Man Contractors Inc., a demolition and construction company. Instead of paying overtime at the rate of 1.5 times the hourly rate, the employer paid workers in cash at the straight-time rate. WHD also discovered several recordkeeping violations.
“Investigators found that many of the employees were paid for overtime hours in cash off-the-books at the employees' straight-time hourly rates, a clear violation of the Fair Labor Standards Act,” said Timolin Mitchell, WHD district director. “We are especially vigilant in areas, such as construction, where these violations are common. No employer should derive an unfair advantage and make financial gains by exploiting their employees.”
The amount of back wages due totaled just under $42,000. Because the violation was intentional, employees received an equal amount in liquidated damages. The employer must now follow strict documentation procedures to ensure future compliance, in accordance with the terms of the settlement agreement.
The investigation and resulting penalties could have been easily avoided with an accurate and comprehensive time and attendance tracking system. A good start is TimeForce, the attendance management system from Infinisource. Please click here for more information.
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