By Steve M. Cohen bio
Sometimes people don’t understand my concern for “mess management.” They may see my warnings about personnel issues, potential lawsuits and government regulation as exaggeration.
6 heavy fines
Let’s take just a single area as an example. In one recent week, the U.S. Department of Labor laid heavy fines on a wide range of companies across the country:
- A McDonald’s franchise has paid $58,227 in back wages to 1,258 employees following an investigation by the Wage and Hour Division at 16 locations in the Denver area. There were minimum wage and record keeping violations of the Fair Labor Standards Act. That is a whopping $46.29 per employee. Plus, there were child labor violations resulting in an additional $8,220 in fines. They do not specify the fines associated with the $58,227 paid for FLSA violations, but we can assume anything up to three times the actual damages—that could be $174,681
- The Mount Rushmore Broadcasting Inc., based in Casper, Wy., was ordered to pay $79,445 in unpaid overtime and minimum wages plus an equal amount in fines to six employees. That’s $13,240 each.
- The Nine Fortune, LLC., doing business as China Wok in New Mexico, was sued to recover $38,508 in back wages and other violations of the FLSA on behalf of 19 kitchen staff. A fine of $59,408 was also published in the case.
- Popsy Pop LLC, a New Jersey Ice Cream Company, has been ordered to pay $34,200 in back wages to 55 workers, again an FLSA violation. Additionally a $48,000 fine was leveled. That’s $622 per employee.
- Chicago nursing home company, The Renaissance at South Shore, has been ordered to pay $138,075 to 295 workers ($468 to each), again on an FLSA violation. In this case, a $62,480 fine was assessed.
- Robert Maughon, doing business as First Med Family Clinic in Tennessee, was ordered to pay $22,240 to 14 employees (that’s $1,589 to each) for FLSA violations. No report on the fines assessed here.
The above six cases represent a total of $307,468 in back wages that these employers have been ordered to pay. The reported fines paid to the government this week were $169,888. The unreported fines could easily be double that number.
The cost of not knowing
My guess is that these managers did not diabolically determine that they would cheat their employees out of overtime or back wages. In fact, my guess is that these small businesspersons did not know the laws and rules that well and just got caught in the DOL net. These costs are staggering, and they accompanied hours of interviews and interrogations and countless numbers of sleepless nights by businesspeople.
I would also caution that these disasters are not limited by industry or profession. You’ll note that this small sample includes a number of diverse areas. No area, not even a law office, is immune.
Conclusion
Don’t let this happen to you. I suggest you look at some of my other blogs and my website (www.laborgroup.com) for more background. Most of all, take these issues seriously. They trip up at lot of organizations every week!
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