One of the most misunderstood laws on the books is the Fair Labor Standards Act (FLSA) , enacted during the Great Depression to protect the rights of workers. It’s full of wrinkles, exceptions and quirks that can be confusing, particularly when it comes to wage and hour liability.
Is your organization laboring under common myths that could lead to disastrous consequences? For example: It’s no big deal if a company accidentally misclassifies a non-exempt employee as exempt. Myth or fact?
What about this one: The Department of Labor (DOL) only cares about prosecuting large employers with deep pockets in certain high-profile states.
And what about ingrained workplace behavior? Is it a myth or fact that employee behavior—such as working through lunch—is virtually impossible to modify?
A new, free eBook, How 8 Myths about FLSA Can Bust Your Budget & Blow Your Reputation, provides some answers. Distributed after our recent webinar the eBook exposes common misconceptions and counters them with the cold, hard facts of wage and hour liability. I wrote the eBook to help HR professionals, corporate legal counsel and compliance leaders avoid multimillion-dollar payouts and public relations nightmares And make no mistake about it. The consequences of ignoring wage and hour laws—or pretending they’ll go away—can ignite a litigation explosion.
Take a practice that involves several minutes of unpaid work a day, spread it over a population of hundreds of workers and let damages accumulate for up to three years—if the employer is aware of the violation and fails to fix it. Don’t forget plaintiff’s costs plus your company’s time lost defending claims.
Eliminating liability begins at the top
Some busy senior executives sometimes expect legal and human resources professionals to fix wage and hour compliance so they can attend to more “important” matters. That’s not how it works. Just as you spend money to build market share, launch new products and increase brand recognition, you must be willing to invest in initiatives that will change risky workplace practices.
- Begin with new hires. Orientation programs for managers and employees should include a wage-and-hour policy component.
- Follow that with wage-and-hour specific training for current managers then current employees. Give people basic information about the FLSA and how it applies to pay practices, job classifications and everyday work practices.
- Provide classroom training for managers so they can explore concepts and skills, ask questions and clarify their responsibilities.
- Provide ongoing reinforcement to keep the message alive and sustain commitment to a common goal.
- Align wage and hour compliance with your organization’s goals. Give people a reason to change.
- Change workplace practices—which brings us back to ingrained behavior. Fortunately, when it comes to changing long-standing but risky behavior in the workplace, it can be done. Fact: It takes commitment and persistence.
Unless employers consciously and deliberately address FSLA issues and permanently fix them, ongoing FLSA liability will persist and even grow. For employers that choose to ignore the issue or ineffectively address underlying problems, wage-and-hour compliance will continue to be a long-term and costly business and legal risk.
Stephen M. Paskoff, Esq., is president and CEO of Atlanta-based ELI Inc., which provides award-winning learning solutions that transform complex laws and ethical codes of conduct into simple behavioral rules that improve performance, reduce legal risk, and create productive workplace cultures. Mr. Paskoff is the former co-chair of the American Bar Association’s Compliance Law Training and Communication Subcommittee. He can be contacted at firstname.lastname@example.org.