Company held overtime hours until less busy workweeks

One company’s attempts to find an alternative to overtime pay led to a big fine – and a warning from the Dept. Of Labor (DOL) that others should heed.

Investigators for the DOL found that Progressive Business Systems Ltd. Had a practice of banking employees’ hours when they worked more than 40 in a workweek.

If employees had a busy workweek, the employer didn’t record those hours until a workweek when the employees came up short of 40hours. That led to violations of the overtime provision of the Fair Labor Standards Act (FLSA)/

The Minnesota manufacturer must now pay $85,617 in back pay to these employees and an equal amount in damages.

And the DOL warned this practice is actually very common – and urged any workers who are victims of the practice to come forward and report violations anonymously.

OT needs to be paid promptly

Remember, workweeks don’t have to correspond to the calendar week. They can start any hour of any day, but need to be a fixed and regularly occurring period of 168 hours (seven consecutive 24-hour days).

Anything beyond 40 hours in that period must be compensated at a rate of pay, according to the FLSA.

The payment can’t be waived, and it can’t be tacked onto future pay – the overtime needs to be paid out in the corresponding paycheck.