DOL’s Wage & Hour Division Sends Message to Related Companies

By:  TIMOTHY C. HAUGHEE

NOVEMBER 22, 2013

Earlier this week, the U.S. Department of Labor’s Wage and Hour Division announced that two separate but related resorts in California agreed to pay nearly $60,000 in back wages to 53 employees, including maintenance and housekeeping employees, as a result of an investigation by the Wage and Hour Division.  The investigation revealed that the resorts were operating under the same management and shared employees; however, the resorts recorded employee hours on separate payrolls.  As a result, affected employees only received their straight-time pay, even though they typically worked more than forty (40) hours in a work week when the payrolls were combined, entitling the affected employees to overtime compensation.

Consequently, related companies that operate under the same management and that share the services of their respective employees should internally audit their payroll practices for compliance with the Fair Labor Standards Act (“FLSA”).  If necessary, the related companies should ensure that they are properly calculating the total combined hours worked by their shared employees so as not to expose the companies to potential liability for violations of the FLSA.

A copy of the Wage and Hour Division’s press release regarding this case can be found here.

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