How Companies Can Achieve Compliance And Avoid DoL Penalties

How Companies Can Achieve Compliance And Avoid DoL Penalties

Staying in compliance with labor and workplace regulations has always been a major worry for organizations because of the impact it can have on their finances and their reputation. These concerns are often a major distraction to management and employees, and can severely hinder their productivity. The volume of litigation related to the Department of Labor (DoL) and the Fair Labor Standards Act (FLSA) has increased greatly in recent years. Let’s take a look at one of the recent stories to hit the headlines.

El Rancho Supermercado, a supermarket chain in the US, has been fined $50K in civil penalties, apart from being asked to pay approximately $84K in back wages by the U.S Department of Labor, after many of its franchises were found to have violated provisions of the FLSA.

The owners and operators of El Rancho Supermercado stores were ordered to pay $84,076 in back wages to 1,114 employees working as sackers, cashiers, cooks, bakers, stockers and tortilla makers for “depriving low-wage workers of their overtime compensation and by paying many below the federal minimum wage.”

A DoL press release further stated that:

“Investigations by the division’s Dallas District Office found that many employees were paid on a piece-rate basis rather than an hourly rate. Their total wages amounted to less than the federal minimum wage of $7.25 an hour, and they were not paid an overtime premium for hours worked over 40 in a work week. Additional minimum wage violations resulted when the employers made illegal deductions from the workers’ paychecks for uniforms and cash register shortages. The employers also failed to combine all hours worked by employees at multiple franchise locations in a workweek, and failed to include non-discretionary bonuses when computing overtime premiums, thus denying employees proper overtime compensation. Additionally, the employers failed to maintain the required record keeping.”

Technology aiding compliance

According to the FLSA, employers must maintain accurate time and payroll records. In reality, many business still use antiquated punch card time-clocks, manually-entered records of clock-ins, and inadequate record-keeping procedures that result in major audit fails should the DoL investigate any workforce complaints.

In addition to inculcating a culture of compliance within, organizations can also take the help of technology to effectively deal with the risks of non-compliance to labor laws and internal business policies. Technology helps them automate time tracking processes and provides visibility to track compliance. Replicon’s time and attendance management solutions such as TimeAttend have helped organizations maintain compliance by helping them:

  • Track time accurately
  • Manage overtime, time off, meal breaks, rounding and other business rules
  • Manage time records and pay data to be presented in case of an audit

For more information on compliance and how modern solutions can mitigate compliance-related issues, read our informative white paper here.

The original news release by the DoL can be found here: https://www.dol.gov/opa/media/press/whd/WHD20130968.htm

Vivek Gopalpuria
ABOUT THE AUTHOR
Vivek Gopalpuria
Vivek is the Associate Director of Product Marketing at Replicon. Replicon provides award-winning products that make it easy to manage your workforce. With complete solution sets for client billing, project costing, and time and attendance management, Replicon enables the capture, administration, and optimization of your most underutilized and important asset: time.
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