Gadzooks! This is one of the largest wage and hour judgments ever!

Yesterday, the Department of Labor announced that a Pennsylvania federal court awarded $35.8 million in overtime back wages and liquidated damages to 6,000 current and former workers across fifteen facilities in what it claims to be “one of nation’s largest FLSA judgments.”

In its Findings of Fact and Conclusions of Law, the court began by emphasizing that the Fair Labor Standards Act “mandates that each covered employee receive a ‘fair day’s pay for a fair day’s work.'” However, the “overwhelming evidence” confirmed that the defendants had “created and oversaw a system whereby employees who had worked a fair day, and often more, did not receive their fair day’s pay.”

Specifically, the Department of Labor put forth evidence of years of FLSA violations, including:

• Willfully failing to pay employees for all hours worked, including work done during meal breaks.
• Failing to incorporate all promised compensation, including non-discretionary bonuses and shift differentials, when calculating overtime pay.
• Avoiding paying overtime by incorrectly treating employees as exempt from the act’s overtime requirements.
• Not keeping accurate records of hours employees worked and compensation due for those hours.

These were not “occasional, innocent payroll errors,” noted the court. Instead, the defendants “created and intentionally maintained a system through which employees were consistently, systematically, and willfully subjects to payroll practices that did not remotely comply” with the law. The result was an “adversarial payroll system where employees were regularly shortchanged amounts owed — their ‘fair day’s pay’ — then forced to ‘fight’ and ‘battle’ to receive just compensation,” which led employees to “simply give up.”

The court concluded that the defendants acted “willfully–if not maliciously” and the court was “compelled” to hold them accountable for their willful, flagrant violations.”

The court entered an order for $17,902,219.10 in back wages due and another $17,902,219.10 in liquidated damages due.

Don’t let this be your business.

• If you have questions about the FLSA — it can be complicated — ask them.
• If you know the lines of the FLSA, implement safeguards to avoid coloring outside of them.
• If you do intentionally violate the FLSA, courts will — and must — hold your business accountable.