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Apr
2013
26

Georgia Printing Company Slapped With $40,000 of Mandatory Backpay, Fines for Misclassification

A Georgia printing company, H&W Printing, has been ordered to pay nearly $40,000 after an audit showed they were misclassifying employees as independent contractors.

The Department of Labor Wage and Hours Division collected $31,863 in back wages for the 69 affected employees. The WHD also found several violations of the Family and Medical Leave Act and the Fair Labor Standards Act. The repeat violations to the FMLA cost the company an additional $7,741 in civil penalties according to the 1099 Compliance Blog:

Investigators determined that the organization routinely misclassified its employees as independent contractors during a three-month “probationary period” and denied them overtime wages during that time. Managers’ practice of destroying time sheets after workers had been paid was also cited as a violation of federal regulations.

Caryl Stribling, acting director of the Wage and Hour Division’s Atlanta District Office,¬†said in a release:

“Far too often, employers misclassify their employees as independent contractors to avoid paying them in compliance with the FLSA, as well as other federal, state and local statutes. Misclassification costs taxpayers enormous sums of money each year in uncollected employment taxes, and gives unscrupulous employers an unfair advantage. The Wage and Hour Division is vigorously pursuing corrective action in those situations when workers are, in fact, employees, to ensure that they are paid required wages and to level the playing field for employers who play by the rules.”

The violations of the FMLA and FLSA yielded in a quick primer from the DOL:

Since 1993, the FMLA has been a major component in the department’s effort to promote work-family balance, providing workplace protections for those living with a serious health condition, or caring for a covered family member with a serious health condition. The FMLA helps to ease the burden that can come with needing time away from work when faced with such an illness by providing eligible employees unpaid, job-protected leave with continuation of health care coverage under the same terms and conditions as if the employee had not taken leave. Leave may be taken all at one time, or may be taken from time to time as the medical condition requires. An employer is prohibited from interfering with, restraining or denying the exercise of, or the attempt to exercise, any FMLA right. Prohibited conduct includes refusing to authorize FMLA leave for an eligible employee.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per workweek. Additionally, the law requires that accurate records of employees’ wages, hours and other conditions of employment be maintained.

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