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Minimum Wage Violations Still Stinging Employers

Posted on: October 1st, 2014

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Minimum Wage Violations are most likley in happen at food and retail workplaces

Retail stores and restaurants have frequently been in the news for minimum wage violations. In the most recent case, Mystic Pizza in Connecticut was ordered to pay 110 employees more than $105,000 in wages for paying less than minimum wage and/or not receiving overtime pay. Mystic’s cooks, dishwashers and hosts were paid $5.69 an hour, but Connecticut’s minimum wage is $8.70 an hour. Full details

Other well known chains, like Victoria’s Secret, TJ Maxx, Gap, Petco, Papa Gino’s, Sears and Delta Airlines, have also been called out for minimum wage violations too.

It’s hard to fathom. These businesses have access to payroll and time & attendance systems, which accurately track employee hours and tips. But looking closer, these companies have circumvented these systems and many of the violations stem from other reasons, such as forcing employees to work off the clock to avoid overtime, or mis-classifying workers for tax benefit.

Company Exposure To Minimum Wage Violations

No company is immune to minimum wage and hour laws. Even the Federal Government itself is subject to these rules, and was found to have violated FLSA rules when it delayed paychecks during the government shutdown. Details

Smaller businesses might think that the DOL is only focusing on the big fish, judging by the headlines, but banking on that is a risky strategy.

The most common wage & hour violations in these cases include Overtime, Exempt/Non-Exempt classifications and 1099/W2 employees.

The stakes are high — settlements totaled $467 million in 2012, and are growing. Businesses can be subject to fines/penalties from both federal & state agencies.

How Businesses Can Reduce The Risk of  Minimum Wage Violations

  • Implement state-of-the-art Payroll and Time & Attendance systems
  • Review your employee classifications (exempt vs non-exempt) to ensure accuracy with FLSA
  • Provide frequent training to managers/supervisors on work rules & proper procedures
  • Ensure the employees take their required breaks and meals
  • Review and update job descriptions to accurately reflect job duties

MassPay helps small to mid-sized businesses review their business processes, identify the gaps and risks, and stay in compliance with Wage & Hour, Affordable Care Act and other regulations, through our ASO (Administrative Services Organization) service.

Use our HR & Payroll expertise to stay in compliance, reduce your liability and reduce your payroll and HR administrative costs.

Contact us to learn more.


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