An Epidemic of FLSA Violations And Multi-Million Dollar Penalties
Several large corporations, including FedEx, Children’s Hospital Los Angeles, Walmart, Sam’s Club, and Bank of America, have faced multi-million dollar settlements for repeated Fair Labor Standards Act (FLSA) violations such as misclassifying workers, denying breaks, and unpaid overtime, highlighting the significant financial risks of non-compliance even for well-resourced employers and underscoring the importance for businesses of all sizes to ensure adherence to wage and hour laws through accessible compliance solutions like WorkforceHub.
Learning from your own mistakes is a good thing, but it’s even better to learn from someone else’s and avoid them altogether. Today’s post is a cautionary story citing wage hour violations made by multi-million dollar companies.
FLSA infractions committed repeatedly by large employers can rack up massive fines. Consider these:
- Fed Ex agreed to pay drivers misclassified as independent contractors $240 million in back wages.
- After being served with four class action suits, Children’s Hospital Los Angeles agreed to recompense $27 million in back wages and attorney’s expenses to workers who claimed they were owed for wage and break violations.
- Walmart and Sam’s Club settled a $62.2 million FLSA suit for requiring off-the-clock work, denying breaks, and shorting workers overtime pay.
- Bank of America and subsidiary Merrill Lynch made a deal to recompense $14 million to settle two overtime class actions.
If mega-corporations with massive HR departments, teams of accountants, and armies of attorneys are held accountable when they violate DOL regulations, it should concern SMBs with fewer resources. The WHD does not publish details about its audits, but it’s clear that employers of all sizes are vulnerable to an audit—especially those in low-wage industries.
You don’t need to hire a dedicated compliance expert. With WorkforceHub, your current HR team can easily handle FLSA, ACA, PBJ, and any applicable state or local regulations.
References:
- http://www.thinkadvisor.com/2017/02/07/metlife-hit-with-50-million-class-action-lawsuit
- https://www.bigclassaction.com/settlement/employees-win-unpaid-overtime-class-action-against.php
- https://www.law360.com/articles/841693/children-s-hospital-la-gets-approval-for-27m-ot-settlement
- https://www.law360.com/articles/793537/bofa-merrill-lynch-win-judge-s-ok-of-14m-deal-in-ot-suits
- https://www.reuters.com/article/us-fedex-settlement/fedex-to-settle-driver-lawsuits-in-20-states-for-240-million-idUSKCN0Z229Q
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