Some companies get pretty strategic when it comes to avoiding overtime payments. You would think it would be a simple matter of paying employees a straight wage instead of one and a half times for anything over 40 hours but, in fact, employers go to much more complex measures to “trick” the Department of Labor.
Well, the DOL has seen it all before and when they catch these companies, big fines result. When a business operates under multiple business names and puts their employees on two different payrolls for those two “separate” businesses, overtime washes away – as long as each employee works under 40 hours for each company, they shouldn’t be due any overtime right? It seems like it should be a legal work around since, technically, the employee is being paid by two different companies. But the DOL protects employees from this loophole and prosecutes for this behavior.
In California recently, the hotels, Miracle Springs Resort and Spa of Desert Hot Springs, were fined $60,000 in back wages. In Florida, a similar resort was prosecuted for some pretty ugly practices. Safety Harbor Resort and Spa paid $31,000 in back wages after managers were caught for changing time records, removing hours, and deducting meal breaks.
Trying to save money by paying employees less than they’re due is clearly not a great money saving strategy!