May 10, 2019

When You’re Not Just Wrong, You’re Willfully Wrong!

A recent case is getting a lot of attention.  That’s federal judge just ordered Steak-n-Shake to pay $7.7 Million for mis-classifying managers as exempt instead of non-exempt. What may be getting less attention is the distinction the court highlighted between the employer’s violation of the federal Fair Labor Standards Act (FLSA) and the state’s wage and hour law. The judge pointed out that, “there is a conceivable set of facts in which an employer acted in good faith under the FLSA but in reckless disregard for the legality of their actions under the [state law].” Unfortunately for the employer in the case, the judge found that the employer’s “failure to pay overtime was not a good faith mistake.”

This illustrates a great reminder for all employers, be sure you are complying with both federal and state wage and hour requirements! Ignorance is not bliss. Be able to show due diligence in complying with federal, state and – we need to throw in local wage and hour laws, too!  Remember, there are at least 19 states that have their own overtime/ white-collar / EAP regulations that are stricter than the federal regulations!