DoL Achieves Million Dollar Payout

A petroleum distribution plant, which has a number of locations across New York, has agreed to pay 767 employees a total of $900,000 in back wages.

Chestnut Petroleum Dist. Inc., which has 37 gas station / convenience stores located throughout the state of New York, has also agreed to pay a $100,000 penalty to the federal government.

This settlement follows an investigation by the Wage and Hour Division of the DoL, which alleged a number of violations of the federal Fair Labor Standards Act (FLSA).

This is the latest in a spate of lawsuits raised by the US Department of Labor, and has revealed that, in many workweeks during the period between April 20, 2003, and May 28, 2006, employees at various locations within the Chestnut Petroleum Dist. Inc. corporation were paid less than the federal minimum wage and were not properly compensated for overtime hours worked.

The investigation also disclosed that the employers failed to keep required records that showed, among other things, the hours worked each day, total hours worked each week and rates of pay for many of the employees.

The FLSA requires that covered employees be paid at least the applicable minimum wage as well as one and one-half times their regular rate of pay for hours worked over 40 per week. The law also requires that accurate records of employees' wages, hours and other conditions of employment be maintained.

A consent judgment, signed by US District Judge Stephen C. Robinson on March 30, 2007, prohibits the defendants from committing future violations of the minimum wage, overtime, recordkeeping and anti-retaliation provisions of the FLSA.

Further, the judgment orders the defendants to pay minimum wage and overtime back wages totaling $850,000 combined, plus interest, to the majority of the workers, and to pay $50,000 combined to two employees who were unlawfully fired.

Also, the defendants must pay a civil money penalty of $100,000 to the Labor Department.

Finally, the court has ordered the defendants to expunge from their employment records all references to the actions taken against the two wrongfully fired employees and to implement a compliance program designed by the Labor Department to ensure their future compliance with all requirements of the FLSA.

With compliance to state and federal legislation likely to get tougher in the future, you may wish to consider investing in a time and attendance system, which automates the process of recording and paying wages to your employees.