Wage and hour issues can become serious violations, as an Alabama hotel manager recently learned when he was held personally liable for violations to the Fair Labor Standards Act (FLSA). Here’s a quick summary of the backstory: Manager is the hotel owner’s son, with no ownership in the employer’s business; the hotel clerk worked the night shift and was compensated with an hourly wage plus onsite lodging; after a falling out, the worker sued. And the 11th Circuit Court of Appeals decided in favor of the worker, per a recent Fisher & Phillips article.
You might be – rightfully – wondering why we’d post an article about a hotel…two reasons: the personal liability for the manager and the definition of an employer, both of which healthcare businesses, and their managers, should note.
Federal wage law defines an employer quite broadly as, “any person acting directly or indirectly in the interest of an employer in relation to an employee.” This leads me to believe you’re an employer, I’m an employer, we’re all employers, even if we’re just managers or directors. F&S writes that someone with supervisory responsibility or control over significant aspects of the company’s day-to-day functions may be considered an employer. In times past, personal liability was reserved for those in executive positions, but this case brings it very close to home.
F&S offers some good, actionable advice:
- Educate managers on wage & hour compliance and the risk of personal liability. Managers, make sure you know all the ins and outs of these important wage laws and that you’re closely supervising this aspect of your department or team.
- Encourage timely reporting of errors and look for potential wage & hour issues before they become a problem.
- Review your company’s pay practices regularly by: assessing timekeeping processes and employee compliance; reviewing non-exempt classifications, especially in light of recent worker-favorable changes in this area; proactively escalate any issues you believe could become problematic for the company; and consider discussing any questions with an attorney who specializes in human resources. Our company has worked with F&S since 2009 and can honestly say that the peace of mind is well worth any fees.
As a refresher, here is a link to the first in a series of blogs on wage & hour issues.