Seeking Relief for FLSA Violations
The Fair Labor Standards Act (FLSA) is a federal law that establishes minimum wage, overtime pay, recordkeeping requirements, and child labor standards.
1. File a complaint with the U.S. Department of Labor, or
2. File a complaint with the U.S. Department of Justice, or
3. File a private lawsuit against the employer.
As a preliminary matter, Option #2 is not common. Far more typical are Options #1 and #3. So, let’s focus on these two.
Option #1: The U.S. DOL complaint
When employees file a complaint with the Department of Labor, the complaint is assigned to a Wage and Hour Investigator who will then conduct an investigation regarding the allegations. The investigation may include employee interviews, inspection of records, and meetings with company executives.
If the complaint is substantiated, the Investigator will calculate any back-wages due to the complainant and other affected employees. The Investigator may also assess punitive damages as well. The Investigator will confer with the Employer to voluntarily pay the estimated back wages owed to the employee and any punitive damages. Sometimes, the amounts agreed to is a result of a compromise between the employer and the Investigator.
If the employer refuses to voluntarily pay the amounts assessed, the Secretary of the Department of Labor may file a lawsuit against the employer.
If the employer agrees to voluntarily pay the amounts agreed to, the employer will sign Form WH-56. Then, the Investigator will send the employer Form WH-58, which the aggrieved employee will be asked to sign when the back wage check is tendered. By signing the WH-58, the employee is waiving her right to bring a private lawsuit against the employer regarding FLSA violations. The WH-58 states, in part:
Your acceptance of back wages due under the Fair Labor Standards Act means that you have given up any right you may have to bring suit for back wages under Section 16(b) of that Act. Section 16(b) provides that an employee may bring suit on his/her own behalf for unpaid minimum wages and/or overtime compensation and an equal amount as liquidated damages, plus attorneys’ fees and court costs. The statute of limitations for Fair Labor Standards Act suits requires that a suit for unpaid minimum wages and/or overtime compensation must be filed within 2 years of a violation of the Act, except that a suit for a willful violation must be filed within 3 years of the violation. Do not sign the receipt unless you actually have received payment of all back wages due.
It will be useful for the employer to explain that the back wage payment is being made as part of a DOL-approved settlement. However, it is important that the employer not intimidate, threaten, or coerce the employee to sign Form WH-58.
Note: If the employee cashes the back wage check but refuses to sign Form WH-58, some courts have held that the employee has waived his right to sue by virtue of cashing the check. However, it is always good practice to have the employee sign the WH-58 before tendering the back wage check.
Option #3: The private lawsuit
In lieu of filing a complaint with the Department of Labor, employees can retain a labor and employment attorney on a contingency fee. The attorney will file a private action to recover unpaid wages as well as liquidated damages and money damages. Attorneys who prevail may also seek attorney’s fees and costs from the employer.
From a financial standpoint, employees who file a private lawsuit for Wage and Hour violations cause far more damage to the employer’s business than employees who file a complaint with the appropriate agency.
Additionally, a private lawsuit will certainly take much longer to resolve than a complaint filed with the Department of Labor. Employers are more likely to save time and money resolving the issues at the administrative level.
Ultimately, it is the employee’s choice how to proceed. If the employee chooses to file a DOL complaint, employers should take that opportunity to hire an attorney and see if the matter can be resolved quickly, efficiently, and at a lower cost than it would to litigate the matter in court.