In today’s litigious environment, businesses must be proactive to prevent or reduce the chances of Fair Labor Standards Act (FLSA) lawsuits and U.S. Department of Labor investigations. One of the most effective ways to do so is to regularly conduct FLSA compliance audits. These audits will help determine whether any FLSA compliance issues or other employment issues exist in your business.
Each year, thousands of disgruntled employees file Fair Labor Standards Act (FLSA) lawsuits in the Federal District Court. Many claim that they were not paid the minimum wage, were not properly paid for all hours worked, were not paid overtime, or were incorrectly classified as exempt from overtime.
Financial impact of FLSA lawsuits on your business
The financial consequences to employers not in full compliance with the FLSA may be devastating. Employees found to have been employed in non-compliance may recover back wages for up to three years, an equal amount in liquidated damages, attorney’s fees, and court costs. Furthermore, these actions often evolve into collective actions that include a large number of current and former employees.
Equally worrisome is the fact that these lawsuits are regularly filed, not just against the corporation (or other legal entity), but also against the principals (persons) who run the business. This can make business owners, and other high-level management personnel that meet the definition of an “employer”, individually and personally liable for any violations of this law.
In addition to private lawsuits, Department of Labor investigations may also subject the business to significant back wage liability and penalties. Businesses in South Florida are frequently the targets of such investigations and it is our goal to keep you compliant to avoid federal penalties.