“Penny Foolish” Employer Ordered to Pay Back Wages

You’ve probably heard the old proverb about being “penny wise and pound foolish.” But here’s a case about an employer who was “penny foolish.”

The story, as alleged in a Department of Labor (“DOL”) Complaint, begins with an employee who did not receive his final paycheck after quitting his job at an auto shop. So, later, he contacted the shop owner and asked that his final wages, in the amount of $915, be mailed to him. After still not being paid, the employee filed a complaint with the DOL.

After the shop owner learned about the DOL complaint, he provided payment. But, allegedly, he did so by dumping 91,500 oily pennies, weighing 500 pounds, on the employee’s driveway, along with a note that read, “F— you.” According to the employee, the pile of pennies blocked and stained his driveway and took nearly seven hours to remove.

After conducting an investigation, the DOL determined that the auto shop owner not only retaliated against the employee who made the complaint, but it also paid its employees at the straight time rate, rather than the time-and-a-half overtime rate, for time worked over 40 hours per week, as well failed to keep adequate and accurate records of pay rates and work hours.

Eventually, the DOL sued the auto shop and its owner. On June 13, the case was resolved pursuant to consent judgment. Under its terms the auto shop and its owner were ordered to pay $19,967 in back wages, and an additional $19,967 in liquated damages, to a group of nine employees, including the employee who made the complaint, based on the failure to pay them at the legally required overtime rate.

“The court has sent a clear message to employers … who subject employees to unfair wage practices and outright intimidation and retaliation,” a DOL lawyer stated. “By law, worker engagement with the U.S. Department of Labor is a protected activity. Workers should not fear harassment or intimidation in the workplace.”

This case serves as a good reminder that bad things happen when you fail to promptly pay all wages due to separated employees. And even worse things happen when you let your emotions get the better of you when an employee asserts a legal claim. Here, a sequence of missteps turned $915 in unpaid wages into a DOL investigation that unearthed a series of overtime violations, culminating in a federal lawsuit and order to pay nearly $40,000 to nine workers.

Penny for your thoughts?

Boyd A. Byers

Foulston Employment Law Attorney