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How to Avoid Labor Violation Penalties

how to avoid labor violation penalties
Daphne Blake

By Daphne Blake

United States labor laws Changes

With recent legislative changes in the United States regarding labor laws, it is as important as ever to ensure that your business is keeping a verified, well-documented account of labor costs for employees. From the Sarbanes Oxley Act of 2002 to the 2015 changes on overtime regulations, employers are both financially and criminally liable for keeping and publishing accurate financial statements.

Let’s consider some examples to place the severity of those fines into perspective. A company in Minnesota was fined 3.3 million dollars for underpaying its employees intentionally, failing to pay overtime, union pension and ignoring employee benefits. In another case, employers in an Illinois based company were told to pay fines amounting to 200,000 dollars to make up for their employees’ lost wages, failing to pay overtime, and record keeping provisions.

According to the FLSA or the Fair Labor Standards Act, any business owner who fails to pay their employees the minimum wage or refuses overtime pay is held liable for shortfall and liquidation damages. In other words, employers have to pay double the damages since it can also fine the officers and directors of a business. In order to avoid such hefty fines, business owners must comply with overtime, salary, minimum wage requirements, and benefits.

Break down of Labor Fines

labor violation penalties

The FLSA’s Wage and Hour division is responsible for investigating wage violations in businesses across the U.S. Their investigations take wages and the hours worked along with employment conditions into account in order to audit company labor costs. If their results show that an employer is skimping on salaries, the company will be fined an amount that could eventually lead to bankruptcy.

This can be accompanied with suggestions for changes regarding employment practices in order to avoid future violations. Employers will be held liable if they complain about any employee who files a complaint to the FLSA regarding labor violations. Deliberate violations may result in fines amounting to 10,000 dollars and a second conviction might involve imprisonment. Child Labor Violations can result in the same fines and violators may be asked to pay 1,000 dollars per violation. Plus, violators may also have to pay employees who were the subjects of the violation an additional $10,000, each depending on the severity of their case. In case an employee dies or is disabled on the job due to a violation, the employer will have to pay triple the maximum fine that is applicable on such incidents.

You can keep yourself updated with the news releases that the Department of Labor publishes on a regular basis regarding labor laws. In fact, some companies also make agreements with the Department of Labor to ensure their employment practices and shift schedules remain in compliance with their specific industries. For a detailed analysis, you should check with your state’s specific labor office on the possible fines and repercussions of labor violations.

It pays to have an employee scheduling software such as Zip Schedules with you when you are assigning shifts. Besides helping you keep track of your staff, it will keep a record of all of their shift timings so you can ensure you are not violating any of the abovementioned laws.

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