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16 FEDA News & Views Preventing Wage & Hour Problems By Nancye M. Combs of HR Enterprise, Inc. nancyecombs@aol.com There were 30,000 wage and hour complaints filed with the US Department of Labor Wage and Hour Division last year, which is a larger number than all other discrimination complaints combined. T he number of wage and hour com- plaints has grown by 400 percent over the last five years and is one of the most troubling and expensive busi- ness problems today. To make matters worse, the complaints are filed under The Fair Labor Standards Act, which is old (1938), cumbersome and hard to apply to the modern workforce. Added to the number of federal complaints, are the many thousands of complaints filed with the state Department of Labor in each of the 50 states in the U.S. More than 600,000 employees became unemployed during one single month at the start of the recession and only 1.5 percent quit. Many terminated work- ers filed complaints because of the eco- nomic times, seeking to be paid all the money coming to them. Others felt wronged and looked for ways to pay back the employer they blamed for ter- minating them. The U.S. House Education & Labor Committee offered blistering criticism of the inept work of the Wage & Hour Division of the Department of Labor. The Secretary of Labor hired 150 new investigators to enforce the law and 100 new investigators to ensure that projects paid for with the stimulus money com- ply with the wage and hour laws. How Serious is the Problem? Although these may be startling statis- tics, it is even more troubling to learn that the Department of Labor estimates that 70 percent of employers are out of compliance. Upon filing a complaint with DOL, a wage and hour investigator conducts an investigation. When the employer is found to have failed to pay wages due, the back pay award can go back three years, if it is found to be will- ful, and the employer can be assessed damages equal to the amount of the back pay (called liquidated damages). To make matters even more complicat- ed, these complaints can spread into a class action lawsuit quickly. Unlike most discrimination complaints, a wage and hour complaint is like a stone thrown into a lake. It ripples. The investigation spreads throughout the company and the result can be an economic disaster. According to the Department of Labor, listed below are 10 of the most common errors employers make. The remainder of this advisory will address them. Assuming that all employees paid a salary are not due overtime When an employer says that an employee gets no overtime "because he is salaried," there is an automatic red flag. Being salaried and being exempt from overtime are not synonymous. In fact, the Department of Labor has very detailed descriptions of which jobs (not people) are exempt from overtime. The Department of Labor only uses "exempt" and "non-exempt" when classifying those subject to overtime and exempts only "white collar" positions. All blue collar workers, including all crafts posi- tions (electricians, plumbers, drafters, HVAC and tool makers) are not eligible