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The
Compliance Vultures are Circling – Are
You Prepared?
At a recent seminar
held by the labor law firm of Fisher & Phillips,
it was stated that over 450 employment related lawsuits are
filed each week. Most of the targets of these lawsuits
are private employers with between 15 and 100 employees. These
lawsuits involve wage and hour violations as well as violations
of the discrimination statutes.
Recently, a firm
in Jacksonville was on the wrong end of a $6.8 million jury
award to a former employee who claimed she was sexually harassed. In this particular case, the woman
was given $6.75 million in punitive damages primarily because
the company had not provided harassment training to its employees
and had not communicated a complaint procedure. Just
the other day, the President of Toyota North America resigned
after allegations of sexual harassment.
In the past several
years, class action lawsuits filed under wage and hours regulations
have exceeded those involving discrimination. There
are a couple of reasons for this. The first is that most companies
are in violation of the Fair Labor Standards Act, the Federal
law that regulates minimum wage and overtime requirements,
and violations are pretty easy to prove. Another reason
is that, under the law, plaintiffs’ attorneys can get
all of the legal fees, regardless of the size of the damage
award. A third reason is it is easier to file a lawsuit
under the Fair Labor Standards Act than it is under Title VII
of the Civil Rights Act. With discrimination charges,
the complainant must file a charge of discrimination through
the Equal Employment Opportunity Commission before being able
to file a lawsuit in federal court. Here’s just
a few of the back pay awards handed down by the Wage and Hour
Division of the Department of Labor since February of this
year: a very well known cruise line operator - $6.25
million for failure to pay overtime; a well known bank in the
Southeastern US - $1,000,000 for requiring employees
to work through lunch or after normal working hours and not
paying overtime; one of the biggest job boards in the world
- $524,000 for misclassifying employees and a nationally known
provider of real estate and escrow insurance - $778,000 for
shortchanging employees in their overtime pay.
The next
big thing is immigration enforcement. Immigration
and Customs Enforcement (ICE) under the Department of Homeland
Security has initiated an all-out effort to find employers
who hire illegal immigrants. In the past, employers
were usually only liable for civil damages. However,
recent raids on employer sites are resulting in criminal charges
to the business officers under the Racketeering Influenced
and Corrupt Organizations, or RICO. Under RICO, business
owners now face jail sentences of 10 to 40 years and fines
of up to $250,000 for each unauthorized alien employed. These
raids, which started in earnest a few months ago, are occurring
all over the country. Industries targeted are those
in security sensitive businesses such as airports, railroads,
power plants and utilities or those known to rely on undocumented
aliens as employees such as agriculture, construction and landscaping. Additionally,
the Social Security Administration is now cooperating with
the Department of Homeland Security and reporting companies
with a high number of mismatched social security numbers.
Later this year the Supreme Court will decide on the legality
of using RICO to pursue businesses that hire illegal aliens.
The moral
of this story – do the right thing. Develop
a policy on harassment and discrimination and communicate it. Know
the rules of the Fair Labor Standards Act and pay employees
according to the regulations and hire people who are allowed
to work in the country.
It
is not worth going to jail over.
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