Penalties for violating the fair labor standards act

Enforcement Under the Fair Labor Standards Act

The Department of Labor's Wage and Hour Division (Wage and Hour) enforces the FLSA for employees of private businesses and state and local governments, and Federal employees of the Library of Congress, U.S. Postal Service, Postal Rate Commission, and the Tennessee Valley Authority. The U.S. Office of Personnel Management enforces the FLSA for other Federal employees, and the U.S. Congress for congressional employees.

Wage and Hour's enforcement of the FLSA is done by investigators stationed across the United States. As Wage and Hour's authorized representatives, they conduct investigations and gather data on wages, hours worked and other employment conditions or practices, in order to determine compliance with the law. Where violations are found, investigators may recommend changes in employment practices to bring an employer into compliance.

It is a violation of the FLSA to fire, or in any other manner, discriminate against an employee for filing a complaint or for participating in a legal proceeding under this law.

The Wage and Hour Division conducts investigations for a number of reasons. Many investigations are initiated by complaints. All complaints are confidential; the name of the complainant and the nature of the complaint are not disclosed. The only exception is when it is necessary to reveal a complainant's identity, with his or her permission, to pursue an allegation.

In addition to complaints, Wage and Hour selects certain types of businesses or industries for investigations. Occasionally, a number of businesses in a specific industry or geographic area will be examined. In either situation, the objective is to assure compliance with the law in those businesses, industries, or localities. Regardless of the reason for the investigation, all investigations are conducted in accordance with established policies and procedures.

An investigation consists of the following steps:

  • A conference between the Wage and Hour representative and representative(s) of the business, during which the Wage and Hour representative will explain the investigation process.
  • Examination of records to determine what laws or exemptions apply to the business and its employees. These records include, for example, those showing the annual dollar volume of the business, the manufacture, handling or selling of goods moved in interstate commerce, and work on government contracts. Information from an employer's records is not revealed to unauthorized persons.
  • Examination of time and payroll records, note taking or making transcriptions or photocopies of information essential to the investigation.
  • Private interviews with certain employees. The purpose of these interviews is to verify the time and payroll records, to identify a worker's duties in sufficient detail to determine what exemptions, if any, apply and to determine if young workers are legally employed. Interviews are normally conducted on the employer's premises, but other arrangements may be made. In some instances, present and former employees may be interviewed at their homes, by phone or by a mail interview form.
  • When all the fact-finding steps have been completed, the employer and/or the employer's representative will be told whether violations have occurred and, if so, what the violations are and how to correct them. If back wages are owed, the employer will be asked to pay the back wages and the employer may be asked to compute the amounts due.

    • Recovery of Back Wages

    Listed below are methods which the FLSA provides for recovering unpaid minimum and/or overtime wages:

  • Wage and Hour may supervise payment of back wages.
  • The Secretary of Labor may bring suit for back wages and an equal amount as liquidated damages.
  • An employee may file a private suit for back pay and an equal amount as liquidated damages, plus attorney's fees and court costs.
  • The Secretary of Labor may obtain an injunction to restrain any person from violating the FLSA, including the unlawful withholding of proper minimum wage and overtime pay.

    • An employee may not bring suit if he or she has been paid back wages under the supervision of Wage and Hour or if the Secretary of Labor has already filed suit to recover the wages.

    A 2-year statute of limitations applies to the recovery of back pay, except in the case of a willful violation, in which case a 3-year statute applies. In other words, unless the violations are willful, back wages may only be recovered within two years of when the violations occurred.

    Employers who willfully or repeatedly violate the minimum wage or overtime pay requirements are subject to a civil money penalty of up to $1,000 for each such violation.

    Violators of the child labor provisions are subject to a civil money penalty of up to $10,000 for each young worker who was employed in violation.

    Willful violations of the FLSA may result in criminal prosecution and the violator fined up to $10,000. A second conviction may result in imprisonment.

    "Hot Goods" Provision

    The FLSA prohibits the shipment, offer for shipment, or sale in interstate commerce, of any goods produced in violation of the minimum wage, overtime pay, child labor or special minimum wage provisions. In the absence of an employer voluntarily correcting the violations, the Wage and Hour Division may seek to restrain the shipment of the goods (e.g., not allowing the manufacturer to ship the goods to the wholesaler).