The United States Department of Labor (DOL) has set its sights on the construction industry. Construction firms and roofing companies of all sizes have recently been targeted by DOL investigations in an effort to crack down on labor employment infractions nationwide. When the DOL visits your workplace, will your business be prepared for an investigation?
Throughout this informative editorial, a Tampa construction lawyer will explain everything employers need to know related to labor laws, potential infractions, and ways you can prepare your company for a visit from the DOL. Remember, if your business needs legal representation, consult the knowledgeable and experienced Tampa construction lawyers at Cotney Construction Law.
How Does the Department of Labor (DOL) Conduct an Investigation?
The DOL is the department of the U.S. federal government responsible for occupational safety, wage and hour standards, and unemployment insurance benefits, among other employment-related areas of the law. The DOL is a cabinet-level department that has agents stationed nationwide. These federal agents conduct wage-and-hour investigations and examine company employment records to determine if the business is compliant with employment laws.
Although many of these investigations are initiated by an employee complaint, the DOL can perform an anonymous or unannounced investigation. However, in most cases, an employer will receive notice that their workplace will be investigated. This includes receiving an appointment letter from the DOL that notifies the employer of an investigation and requests that the employer prepares company records for the DOL to review before they visit the workplace.
Construction and roofing companies need to understand the procedures of a DOL investigation, including the following:
- The agent will examine company records to determine what laws or exemptions apply.
- The agent will review payroll and other wage and hour records that are critical to the investigation.
- The agent may hold private interviews with employees to learn more about the employee’s job responsibilities and how they may apply to exemptions.
- At the conclusion of the investigation, the agent will request a meeting with the employer. During this meeting, the employer will be notified of their violations and the corrective actions for these infractions.
Employers can be represented at any point during a DOL investigation by one of our Tampa construction attorneys.
What is the Penalty for a Violation?
During an investigation, if a DOL agent determines that the employer has violated a federal labor employment law, the employer will receive some form of penalty. Although the penalty for a wage and hour violation is determined on a case-by-case basis, if a construction business fails to comply with labor laws, they will be penalized in one of the following ways:
- Recommend Changes: If a violation is discovered and is determined to be either a first-time infraction or was inadvertent, the DOL can recommend administrative adjustments to the practices of the business to ensure future compliance.
- Pay Damages: The DOL will usually require the company in violation of the law to pay back owed wages to employees, pay liquidated damages, or civil money penalties through a settlement with the employer.
- Civil Penalties: For willful or repeated wage and hour violations or crimes involving violating child labor laws, the employer may be subject to pay signficant civil penalities.
- Litigation: The DOL can file a lawsuit on behalf of employees that are owed additional compensation. The DOL can also seek a U.S. District Court injunction to prevent further violations or seek an order from the U.S. District Court to “prevent the shipment of affected goods.” Lastly, an employee also has the legal right to seek recovery of lost wages or liquidated damages in a private suit.
- Criminal Penalty: Employers that are repeat or willful offenders of labor laws may be subject to criminal penalties including excessive fines and imprisonment.
Depending on the severity of the violation, if this is a repeat violation, or whether or not the violation was inadvertent or deliberate, the penalty for a violation can vary greatly. When you partner with one of our St. Petersburg construction lawyers, they can ensure that you are compliant with these labor rules and restrictions by assessing your business practices, company records, and significantly reducing the possibility of errors.
Should I Cooperate with a DOL Investigation?
As a federal agency, the DOL has a right to inspect company and payroll records and question employees of a business; however, the Fourth Amendment of the Constitution prohibits unreasonable searches and seizures. Typically, for federal agents to inspect a property, examine company records, or interview employees, they will require some form of voluntary consent from the employer or an administrative subpoena to obtain company records.
Although your business may technically be protected from a DOL investigation, interference with an ongoing investigation is forbidden by law. If your business has been contacted by a federal agent from the DOL, immediately consult a St. Petersburg construction attorney. Our attorneys can navigate you through the process of an investigation and help mitigate the chances of a potential violation.
Understanding the Fair Labor Standards Act (FLSA)
The most common types of violations that warrant the attention of the DOL are related to the Fair Labor Standards Act (FLSA) of 1938. Administered by the Wage and Hour Division (WHD) of the DOL, the FLSA “establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments.”
Our Clearwater construction attorneys will go into more detail regarding the specific federal labor laws governed by the WHD. Furthermore, we will discuss how construction companies may inadvertently violate some of these laws and ways a construction attorney can help ensure the company is compliant with federal labor laws.
Workweek, Hours Worked, and Minimum Wage Requirements
A “workweek” is considered a 40-hour interval of time over a period of 168 hours during a seven day period. A workweek can begin at any point during the week. The “hours worked” is the period of time that an employee is on duty and performing work-related tasks either at their workplace or any other location. According to the FLSA definition, hours worked includes the total amount of time from the first to last “principal work activity” of the day.
The federal minimum wage is $7.25 per hour; however, employers are required to pay the “prevailing” wage amount if the state minimum wage exceeds this amount.
For example, the State of Florida’s minimum wage is currently $8.46 per hour, so employers are required to pay non-exempt employees the higher state hourly total instead of the federal total. If a construction firm has any workers that perform work duties for 40 hours per week and earn less than $400 (the actual minimum in Florida is $338.40 for 40 hours) they should closely review their payroll records and make certain that the worker is earning at least the minimum wage per week.
Nonexempt workers are required to be paid one and one-half times their regular hourly rate for each hour worked after 40 hours in a workweek. Although there are some employees that may be exempt from overtime depending on their work responsibilities (typically, supervisor-level employees or employees in highly specialized positions), many employers violate overtime laws by making one of the following mistakes:
- The employer fails to accurately track the hours each employee works
- The employer doesn’t consider certain work tasks as time on the clock
- The employer calculates hours every other week instead of on a weekly basis
- The employer fails to pay certain non-exempt workers overtime
Employers should perform these tasks to ensure they are compliant with overtime laws:
- The employer should consult an attorney or educate themselves on the job requirements and positions that are exempt from overtime
- The employer should keep accurate payroll records
- The employer needs to properly calculate overtime pay and compensate workers for surpassing the 40-hour workweek accordingly
Under the FLSA, employers are required to keep accurate records of employee’s wages, hours, and other important information including:
- Employee’s basic personal information (name, address, occupation, age)
- Total hours worked each week
- Total daily and weekly earnings
- Hourly pay rate including overtime work
- Total overtime pay for a workweek
- Total deductions from wages
- Total wages paid every pay period
It’s critical that employers maintain accurate recordkeeping data related to their company’s employment records. Employers should also retain all recordkeeping documents including time cards and work time schedules. Failure to retain these documents or failure to provide government inspectors with access to these records can result in additional penalties for wage violations. Moreover, the willful destruction of recordkeeping data is a serious offense that is subject to an infraction of up to $10,000.
Child Labor Laws
Designed to prohibit the employment of children in positions that are deemed “detrimental to their health and well being,” the FLSA features several child labor provisions restricting the total number of hours of work for minors under the age of 16. There are also certain job responsibilities in construction that are considered too hazardous to be performed by minors including the following types of tasks:
- Driving a motor vehicle
- Roofing jobs
- Operating power-driven circular saws and other dangerous machinery
- Trenching or excavating
- Exposure to radioactive substances
Generally, employers need to be cognizant of the following labor laws:
- 18 or Older: Can perform any type of job with or without hazards for unlimited hours
- Minors 16 or 17: Can perform any job that is non-hazardous for unlimited hours
- Under 16: Can work only up to three hours on a school day, eight hours on a non-school day, 18 hours in a school week, or 40 hours in a non-school week. They also cannot perform hazardous work duties.
If your construction business employs workers under the age of 18, employers need to be mindful of the total hours they are working along with the tasks they are performing. Consult a Clearwater construction attorney to learn more about child labor laws that may impact your workplace.
Other Important Labor Laws
Along with the FLSA, WHD also governs the following labor laws:
Davis-Bacon Act: This act requires that professionals who have assisted with the construction of a federally financed project be compensated the local prevailing amount for wages and fringe benefits. Similarly, the McNamara-O’Hara Service Contract Act requires that contractors and subcontractors compensate employees no less than the local wage rates for contracts in excess of $2,500.
Walsh-Healy Act: This legislature requires that all employees that provide supplies and materials on a federal project be paid the prevailing local minimum wage rates along with overtime pay. Additionally, the Contract Work Hours and Safety Standards Act also sets forth requirements regarding overtime for construction contracts.
Family and Medical Leave Act (FMLA): If an employee suffers from a significant health condition or is experiencing other family-related medical situations, they may be entitled up to 12 weeks of unpaid protected leave annually. Consult our Clearwater construction lawyers for any labor law counsel related to FMLA leave.
Immigration and Nationality Act: The WHD governs several important laws related to the temporary employment of both immigrant and nonimmigrant workers.
Equal Pay: The FLSA prohibits any form of sex-based wage differentials. If a disparity between the wages of a male and female employee in the same position is discovered, this is a violation of the Equal Pay Act. All provisions that prohibit discrimination are enforceable by the Equal Employment Opportunity Commision (EEOC).
Other Important Labor Topics
If you own a construction firm, roofing company, or any other type of construction-related business, a Brandon construction attorney can assist you with the labor employment laws related to your business and ensure that your business remains compliant with these rules and restrictions. Along with the above listed laws related to the FLSA, employers should consider the following labor questions related to the practices of their business:
- Displaying Employment Posters: Does your workplace have the required posters in place notifying your employees of their labor employment rights? For example, is your workforce aware and educated on topics like the federal minimum wage amount or their rights under the FMLA?
- Exempt Employees: Do you understand the requirements for an employee to be exempt from overtime pay? Do you understand the difference between an hourly worker and a salaried one? Depending on the specialized tasks of each member of your workforce, they may or may not qualify for overtime exemption.
- Compensatory Time: Do you understand all forms of compensatory time? This paid time can include everything from training time to travel time to the time workers are located on the premises before and after their “scheduled shift” time.
- Independent Contractors: Is your workforce mostly independent contractors or employees? Before you speak to the DOL during an investigation, you should consult a Brandon construction lawyer that can determine the job status of each member of your workforce and educate you and your workforce on complex labor employment laws related to independent contractors versus full-time employees.
- Retaliation: Has any employee of your business made a complaint or reported your business to the DOL for an alleged wage and hour law violation? Did this employee experience an adverse employment action after making this complaint? If an employee is demoted, experiences reduced hours, or their employment is terminated for engaging in a protected activity, you may face litigation.
As the construction industry has recently been targeted by the DOL for a myriad of investigations, employers should partner with a construction law firm to ensure compliance with labor laws. From educating your workforce to reviewing employment records and policies, it’s critical that you prepare your workplace for a potential investigation. Seek the advice of our Brandon construction attorneys to mitigate any potential risks and ensure that your workplace is compliant with all labor laws administered by the DOL.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.