Proposed Legislation Threatens New FLSA Penalties
As reported by the Fisher & Phillips, LLC employment blog, both the Senate and House have proposed bills that would, if passed, provide for expansive changes in the Fair Labor Standards Act’s (“FLSA”) civil monetary penalties.
Today, the FLSA permits the Department of Labor (“DOL”) to impose a civil penalty of up to $1,100 for each violation of the minimum wage or overtime provisions, but only if the violation was either repeated or willful. The law also currently authorizes penalties for “each such violation” and the DOL tends to apply these on a per-employee basis, and the total fines can be more than the wage underpayments. If the pending proposals are adopted, the potential exposure will increase substantially.
Under the proposed legislation, fines of up to $1,100 could be imposed for violations that are neither repeated nor willful — accordingly, violations would be punishable in this way even if the employer had never before violated the FLSA and was acting in good faith. Further, the employer would be exposed to the penalty “for each employee or other individual who was the subject of” a violation. If violations were repeated or willful, then the per-person penalty ceiling would jump to $5,000. And adding a new wrinkle, civil penalties would apply to violations of DOL’s recordkeeping requirements. Employers can be fined even if the recordkeeping violation resulted in no FLSA wage underpayments or child-labor problems.