by: Terrence B. Robinson

The primary Federal law governing wages, hours and overtime, the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq., was originally enacted in 1938. This law is enforced by the Wage and Hour Division of the Department of Labor.

Most employers see no reason to even think about this law if the pay their employees more than the widely known minimum wage. In fact, problems involving violations of the "wage and hour" laws are relatively uncommon to most employers. However, often when a problem arises, its not discovered by an employer until the violation has been ongoing for years. Too often the liability under the law at that point is absolutely staggering to most employers. Employers assume that as long as they pay the minimum wage and overtime there is nothing else to know about the wage and hour law. This is simply not the case and navigating the complex wage and hour laws is something best left to a wage and hour specialist. One clear sign that you need to consult a labor and employment law specialist immediately is that you still believe that paying an employee a salary means you don't have to pay them overtime.

Employers are shocked and amazed everyday by communications from the wage and hour division. They are quite surprised to find out that the wage policies they have had in place for years without any problem are in fact illegal and they are now looking at paying back wages for a two, and sometimes three year period. The problem is usually that what they thought was simple and made their employees happy [so they thought], turns out to be in direct violation of the wage and hour laws. Everything goes along well until one employee becomes disgruntled, possibly for some wholly unrelated reason and starts thinking about how unhappy they are about some quirk is thee employer's pay policy. This inevitably leads to a call to the wage and hour division or ever worst, a private attorney, to check on the appropriateness of the employers pay practice. Also, many times complaints to the wage and hour division come from former employees who are angry about a termination. In either case, suddenly the employer is facing a wage and hour investigation and finds itself liable to all of its current and former employees for back wages dating back two to three years. Many times this is the first time an employer seeks the assistance of a labor and employment law specialist. Unfortunately, at this point the law violation is all too clear and there is no meaningful way to defend against the wage and hour division's findings.

If no settlement can be reached, it is not uncommon for wage and hour cases to result in summary judgment against the employer and back pay liability to be doubled. Often the best an employer can do at this point is work out a payment plan with the Department of Labor. Employers, therefore, must act proactively to ensure that their pay practices are in compliance with wage and hour laws. Consulting a labor and employment law specialist to review an employer's pay practices can be the best money ever spent as the potential liability under the under the law can be great and may be enough to force some businesses to close their doors.

It should be noted that individual employees can file their own private lawsuits in either federal or state court under the FLSA. 29 U.S.C. § 216(b). The FLSA also provides for "collective actions" which are akin to class action lawsuits, but require other employees to opt-in, rather than opt-out as with traditional class action lawsuits. Collective actions can be quite devastating to an employer as unlike the wage and hour division, a private attorney will seek maximum damages, ie., double back wages for three years, as well as, extraordinarily high attorney fees.