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Massachusetts Firms Pay $2.4M Settlement in Overtime Wage Case

By September 23, 2016 No Comments

A recent ruling by the Department of Labor (DOL) shows how crucial it is to ensure your company’s overtime policy is compliant with State and Federal overtime laws and how costly it can be if they are not.

Force Corp., a Lunenburg-based construction company and AB Construction Group, its Framingham-based affiliate, recently settled a $2.4 million lawsuit regarding unpaid overtime pay for 478 employees, according to the Boston Globe.

The two firms deliberately took a number of steps in attempt to avoid paying overtime pay to their employees. First, they misclassified a large number of employees as independent contractors to avoid paying them overtime wages and other benefits. They also used a combination of legitimate payroll checks and cash payments to pay their employees straight time when overtime pay was required. Finally, both companies kept inaccurate time and payroll records, further incriminating them.

Along with the $2.4 million they must pay in back wages, the companies must also pay over $250,000 in penalties. Additionally, they must work with independent consultants to revise their payroll and recordkeeping practices to comply with the Fair Labor Standards Act (FLSA).

It is vital that management put policies and practices in place to ensure they are compliant with State and Federal overtime laws, ensuring that your employees are properly compensated for their work and that your business is free of potential litigation.