What started as a dispute over a few hundred dollars ended with an Atlanta-area employer paying nearly $40,000. That outcome is a useful lesson to employers on several fronts. One, always maintain legally compliant pay records, including pay rates, hours worked, and sums paid. Two, always make sure that you are paying your non-exempt workers proper time-and-a-half overtime when they work more than 40 hours in a week. And three, if you feel the urge to pay wages that you owe under the Fair Labor Standards Act in a way that smacks of revenge… don’t. Just issue a check and move on. It’ll be cheaper and better for your business in the long run. If you have any questions about your rights and responsibilities under the FLSA, make sure you consult with a knowledgeable Atlanta wage and hour lawyer.
The original dispute, which received relatively broad coverage as a result of its peculiar facts, pitted a Peachtree City auto repair shop against one of its former employees. The disagreement began after the employee, A.F., contacted the U.S. Labor Department’s Wage and Hour Division to complain that his employer had not paid him his final paycheck, which amounted to $915.
Rather than simply cutting a check, the employer obtained 91,500 pennies, covered them in automotive fluids, and then delivered them to A.F.’s driveway. To remove doubts regarding motivation, the employer stuffed the man’s pay stub in an envelope with “[expletive] you!” written on the outside. The pile of pennies weighed more than 500 pounds and took more than seven hours to remove from the man’s driveway.
The employer’s elaborate snark came at a comparatively heavy cost, however. The WHD investigated the employer but, when it did, it did so for much more than just the greasy penny stunt.
WHD investigators concluded that the employer violated the FLSA in how it paid A.F. and several coworkers. Specifically, the DOL accused the employer of paying the nine employees straight time for all hours worked, regardless of how many hours they worked in a week, thus violating the FLSA’s requirement that workers receive time-and-a-half overtime pay for all hours worked over 40 in a week. On top of those violations, the DOL also accused the employer of failing to maintain legally compliant records detailing employees’ pay rates and hours worked.
The Impact of Liquidated Damages
The total sum that the employer allegedly illegally underpaid the workers was less than $20,000. However, when a case involves unpaid overtime, the employer potentially can be liable for the actual sum it wrongfully didn’t pay plus “liquidated damages.” Liquidated damages is a type of penalty and, in unpaid overtime cases, the amount of liquidated damages is equal to the amount of actual unpaid wages.
So, if your employer paid you only your straight-time rate of $20 per hour for four weeks during which you worked 60 hours each week, your employer would have illegally underpaid you by $800 ($10 overtime rate x 20 hours x 4 weeks.) The employer, however, would owe $1,600 total, representing $800 in unpaid overtime and $800 in liquidated damages.
In the auto shop case, that meant that the employer eventually shelled out more than $39,934 — $19,967 in unpaid wages and $19,967 in liquidated damages.
As an employer, a failure to comply with the FLSA can have very expensive consequences. Whether you’re an employer or an employee, it pays to get thorough and accurate legal advice. The experienced Atlanta wage and hour attorneys at the law firm of Parks, Chesin & Walbert are here to provide you with exactly that, along with top-level dispute resolution skills. Contact us through this website or at 404-873-8048 to schedule a consultation today.