If you are an employer, you know there are strict laws about minimum wages and overtime. But what about the time your workers spend preparing for a job or being trained? Do those hours count? Yes, they do, and a San Diego contractor found out the hard way.

Findings from the U.S. Department of Labor

Watkins Environmental is a contractor that offers asbestos, lead and paint removal services as well as demolition and mold remediation in the San Diego area. After a federal investigation, the Wage and Hour Division of the U.S. Department of Labor determined that the company failed to compensate hourly construction workers for the time they spent in required training and pre-work project preparation. This discovery led to overtime and minimum wage violations. In addition, the DOL investigators found that the employee records were incomplete and inaccurate, which violated the Fair Labor Standards Act.

Damages and Back Wages

The infractions affected 125 workers, and they led to substantial penalties. Watkins Environmental was ordered to pay $181,722 in back wages and an equal amount in liquidated damages for a total of $363,444. Also, the company was required to pay the DOL $28,462 as a civil penalty for its FLSA violations.

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Following the Laws

Companies in all industries are required to follow minimum wage and overtime laws. Currently, the federal minimum wage is $7.25, but it is higher in some states. Workers who are subject to both the federal and state rates must be paid the higher rate. The DOL provides more information on its website.

The overtime law stipulates that hourly employees must earn overtime pay if they work more than 40 hours a week. That pay rate should be at least one and a half times their regular pay rate. The workweek does not have to match the calendar week, and it can vary for different groups of employees. But it cannot be an average of hours over the course of two weeks or more. You can learn more at the DOL website.

Advice for Contractors

It can be a challenge to keep up with all the wage and hour laws, but it is critical that you comply. As this case proves, violating these laws can lead to severe consequences and stiff penalties, which can be devastating for your company. Be sure that you keep detailed records of all your employees’ hours and wages. The DOL offers a Timesheet App that can help you track your workers’ hours and pay and ensure they are accurate.

The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice nor should it be relied upon as legal advice for your specific factual pattern or situation.