Over the last decade, research by the U.S. Department of Labor (DOL) has found that more than 70% of employers were not in full compliance with the Fair Labor Standards Act (FLSA). Due to these findings, the Wage and Hour Division (WHD) has stepped up its investigations with increased surveillance of compliance to labor standards.
Regardless of what industry or how large a company is, enforcement of compliance has been evident in recent news, most notably Wal-Mart. In 2012, Wal-Mart was ordered to pay $4.83 million in back wages and damages to more than 4,500 employees. Just last month, a jury in Seattle awarded $1.3 million in back wages and damages to 101 former employees of a defunct restaurant & spa. Not long ago, several local companies here in Hawaii were investigated by the WHD when compliance to FLSA was in question further indicating that any company in any state is vulnerable to a DOL audit.
As an employer in Hawaii, it is important to understand whether to follow federal and/or state laws to avoid any compliance issues that could lead to hefty fines, negative press, or even class action lawsuits filed. The DOL firmly states that, “the burden is on [employers] to obey the law, not on the [DOL] to catch them violating the law.” To ensure such standards are met, they recommend a “Plan/Prevent/Protect” approach to compliance where employers are asked to, “assemble plans, create processes, and designate people charged with achieving compliance.”
As listed on the DOL’s website, this “Plan/Prevent/Protect” strategy will require all regulated entities to take three steps to ensure safe and secure workplaces and compliance with the law:
- “Plan”: The Department will propose a requirement that employers and other regulated entities create a plan for identifying and remediating risks of legal violations and other risks to workers — for example, a plan to search their workplaces for safety hazards that might injure or kill workers. The employer or other regulated entity would provide their employees with opportunities to participate in the creation of the plans. In addition, the plans would be made available to workers so they can fully understand them and help to monitor their implementation.
- “Prevent”: The Department will propose a requirement that employers and other regulated entities thoroughly and completely implement the plan in a manner that prevents legal violations. The plan cannot be a mere paper process. The employer or other regulated entity cannot draft a plan and then put it on a shelf. The plan must be fully implemented for the employer to comply with the “Plan/Prevent/Protect” compliance strategy.
- “Protect”: The Department will propose a requirement that the employer or other regulated entity ensures that the plan’s objectives are met on a regular basis. Just any plan will not do. The plan must actually protect workers from violations of their workplace rights.
Read the entire Plan/Prevent/Protect article on the Department of Labor website by clicking here. If you have any questions regarding federal and state wage and hour compliance or need help setting up policies, procedures and training for your company, contact one of our HR Consultants at (808) 791-4900.