By Douglas Weiner and Meg Thering

The U.S. Department of Labor (“DOL”) has announced that it has been finding “patterns of violative pay practices” in gas stations throughout New York, Long Island, and New Jersey. Last year, in New Jersey alone, the Department of Labor, through its multi-year enforcement initiative, conducted 74 investigations of gas stations and ordered employers to pay over $1 million in back pay to employees.

As many commuters know, long daily and weekly hours are the norm for many employees in the gas station industry. Enhanced enforcement activity is now focused on this industry. Specifically, DOL wage and hour investigators are looking for off-the-clock work, flat salaries paid for all hours without variation for overtime, minimum wage and overtime violations. 

STEER CLEAR OF THE DOL’S ENFORCEMENT INITIATIVE BY KEEPING GOOD RECORDS

 Maintaining a strong set of payroll records is the primary defense to a wage challenge. Keeping accurate records of all hours worked protects employers from claims by employees who may later exaggerate and over-generalize the number of hours they have actually worked. Also, record-keeping violations fuel investigators’ suspicions of wage violations. Failure to keep the payroll records required by law (29 C.F.R. § 516; NYLL § 195; N.J.S.A. 34:11-4.6) greatly increases an employer’s risk of exposure to wage claims. Robust payroll records showing each employee’s daily arrival and departure times, the start and stop times of rest periods and meal periods, and the amounts employees are paid in straight and overtime pay, provide the evidence an employer needs to prove proper pay for the daily and weekly hours actually worked. Of course, employers should also record the actual payments made. Records demonstrating minimum wage and overtime compliance are the best defense to a wage and hour challenge, whether questions arise from a government audit or plaintiffs’ class action lawsuit. 

DON’T GET STUCK IN TRAFFIC: MAKE SURE YOU HAVE GOOD UNDERLYING PAY PRACTICES, AS WELL AS PROPER RECORD-KEEPING PRACTICES

Good record-keeping will get you nowhere if your underlying pay practices do not comply with the law. An “industry norm” defense may not suffice. Depending upon the circumstances, employers may consider a variety of strategies to ensure compliance with federal and state wage and hour laws.  A salary method of compensating non-exempt employees may be designed to comply with the overtime requirements of state and federal law. Using the principles of the “fluctuating work week,” an employer may use the payment of half-time overtime advantageously. 

Employers should also ensure that improper deductions are not taken from wages, employees are given requisite notice of their pay, and workers are properly classified as employees versus independent contractors and as non-exempt versus exempt employees.

In light of this new enforcement initiative, we recommend all gas station employers conduct a “spring tune-up” review of their pay practices and records. Better you conduct this tune-up now rather than having to deal with picking up the pieces of a crash after the DOL or a plaintiff’s attorney comes in and finds violations.

 

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