The U.S. Department of Labor Wage and Hour Division (DOL)’s announcement of two settlement agreements in less than a week signals the growing advisability for U.S. employers to audit and tighten overtime, worker classification and other wage and hour practices in response to rising enforcement risks under the Fair Labor Standards Act (FLSA). Less than 1 week after announcing a $1,060,554 settlement with CALNET, Inc. and two subcontractors, the DOL announced on January 24, 2011 that that Washington restaurants Super China Buffet and Great Dragon Inc., doing business as King Buffet restaurants will pay $420,000 in back wages and liquidated damages to 83 employees to settle a DOL lawsuit for alleged violations of the federal Fair Labor Standards Act. Highlighting the growing exposure employers generally face from the heightened Labor Department emphasis on overtime and other wage and hour law enforcement, .these and a series of other settlements demonstrate the significant risks that employers face from mischaracterizing or failing to properly pay for on-call, standby or other compensable hours of work to non-exempt employees. Employers and others providing workforce staffing should review and tighten existing worker classification, timekeeping and classification, recordkeeping and other practices and take other steps to strengthen the defensibility of their practices.
