Labor Department ramps up wage and hour enforcement

The U.S. Department of Labor’s (DOL) wage and hour enforcement has become markedly more aggressive under the Obama administration, according to Paul DeCamp, former administrator of the Wage and Hour Division under President George Bush and now an attorney at Jackson Lewis’ Washington, D.C., regional office.

Speaking at the 2012 Jackson Lewis Corporate Counsel Conference in Washington, D.C., on May 11, DeCamp said the division’s investigators are being instructed to seek civil penalties even in a first investigation of a worksite. He described this as unusual, saying penalties used to be only for second or third violations.

DeCamp said he’s also seeing a broader effort to resolve claims on an enterprise-wide basis. It used to be that an investigation would be resolved at a site. Now if there is a violation at a site, a companywide investigation may follow.

He said there are 50 percent more federal wage and hour investigators now than in 2008, when there were just 1,208 investigators.

Targeted industries

Industries targeted in Fair Labor Standards Act (the law governing pay and work hours) class actions and Wage and Hour Division investigations include:

• Construction, specifically residential construction;
• Franchisor/franchisee;
• Corporate parent/subsidiary;
• Warehousing;
• Janitorial;
• Hospitality, specifically food/beverage and housekeeping;
• Home health care;
• Child care;
• Transportation;
• Meat/poultry processing;
• Staffing companies; and
• Gentlemens’ clubs.

Increasingly, class-action wage and hour complaints name individual officers, such as vice presidents of HR, and managers as defendants, DeCamp noted. Courts have been reluctant to dismiss claims against individuals who arguably had some role in setting or implementing the policies at issue, particularly where there is an ownership interest, he noted.

Exempt positions scrutinized more closely

Positions receiving particular scrutiny in the professional exemption include accountants, engineers and information technology. “There is a lot of activity with the professional exemption,” DeCamp remarked.

The executive exemption hasn’t seen as much attention, he said, but there have been challenges to the classification of retail and restaurant store managers and assistant managers under this exemption as well as construction superintendents.

The amorphous administrative exemption is the hardest exemption to satisfy, he said, noting that mortgage underwriters, mortgage loan officers and “everybody else” who fits in this exemption is being targeted by the DOL and plaintiffs’ attorneys.

Timekeeping practices

DeCamp highlighted timekeeping practices that can lead to class actions, including:

• Automatic meal deductions;
• Supervisors editing employee time;
• Rounding;
• Required early arrival;
• Off-the-clock pre-shift meetings; and
• Off-the-clock shift exchange.

The automatic meal deduction is only unlawful if a meal is not taken, but often the DOL will conclude it has not, particularly in the health care industry, he noted.

In addition to complying with the FLSA and state wage and hour laws, Decamp recommended that employers tell employees that if their time records are not accurate, they should let employers know immediately.

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