If you are an employer, you know there are strict laws about minimum wages and overtime. But what about your workers' time preparing for a job or training? Do those hours count? Yes, they do, and a San Diego contractor found out the hard way.

Findings from the U.S. Department of Labor

Watkins Environmental is a San Diego-based contractor that offers asbestos, lead, paint removal services, demolition, and mold remediation.  After a federal investigation, the Wage and Hour Division of the U.S. Department of Labor determined the company failed to compensate hourly construction workers for the time they spent in required training and in pre-work project preparation. This discovery led to overtime and minimum wage violations. 

In addition, the DOL investigators found the company’s employee records were incomplete and inaccurate, which violated the Fair Labor Standards Act [FLSA].

Employee Benefits Art.pngDamages and Back Wages

The infractions affected 125 workers and led to substantial penalties for the organization. Watkins Environmental was ordered to pay $181,722 in back wages and an equal amount in liquidated damages of $363,444. Moreover, the company was required to pay the DOL $28,462 as a civil penalty for its FLSA violations.

Following the Laws

Companies in all industries are required to follow minimum wage and overtime laws. The federal minimum wage is $7.25 but higher in states where that state’s minimum wage exceeds federal requirements. Workers who are subject to both the federal and state rates must be paid the higher rate. The DOL provides more information: click here.

The overtime law stipulates that hourly employees must earn overtime pay if they “…work more than 40 hours a week.” That pay rate should be at least one and a half times their regular pay rate. The workweek does not have to match the calendar week, and it can vary for different groups of employees. But it cannot be an average of hours over the course of two weeks or more. You can learn more at the DOL website here

Advice for Contractors

Keeping up with all the wage and hour laws can be challenging, but you must comply. As this case proves, violating these laws can lead to severe consequences and stiff penalties, devastating your company. Ensure you keep detailed records of all your employees’ hours and wages. 

The DOL offers a Timesheet App that can help you track your workers’ hours and pay and ensure they are accurate.

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.