The Wage and Hour Division (“WHD”) of the US Department of Labor (“DOL”) recently released a complaint it filed against a landscaping and tree removal business. DOL reports that the employer violated the Fair Labor Standards Act (“FLSA”) by failing to pay overtime wages to 29 workers that, over a two-year period, amounted to a whopping $481,927 or some $16,000 per worker. The employer also may be on the hook for an equal amount in liquidated damages. This means damages approaching $1 million and that each of these workers may be due a total of $33,000 each (plus or minus depending on how much back pay they’re owed). To a landscape worker – this is real money.

Now DOL announces violations all the time at its Wage and Hour news site. Many of the cases it announces relate to employers that didn’t pay their workers the time-and-a-half pay to which they were entitled for overtime hours. Some amounts are large; some are small. This one’s kinda large, but that’s not the only reason it caught my eye. This one jumped out because it involved conduct that, if true, denotes a concerted, knowing effort to evade overtime obligations.

The employer allegedly issued “on the books” paychecks to its workers for the first 40 hours they worked in a given workweek. For any hours over 40, the employer paid the workers at their straight-time rate with no overtime premium – in cash and without any records. This suggests the employer knew very well it had to keep good records of hours and that it should withhold taxes, etc., etc. But it made a conscious choice to go off the books the minute a worker exceeded 40 hours. DOL alleges that this was a willful violation of the FLSA basically because their records conveyed a false record of compliance to hide the fact they weren’t paying overtime.

We’ve seen a case like this before. We volunteered at a pro bono employment law clinic here in the DC area. A worker came in to get advice about some issues at his job. He happened to have brought his timecards and pay records with him even though they weren’t related to his concerns. A quick look at those records revealed that he was being cheated out of a lot of overtime pay. He had no idea. His timecards showed that he regularly worked overtime. His pay stubs (generated by an industry standard payroll system) showed he only worked 40 hours and didn’t show that he worked the overtime hours documented on his timecards. For those hours, he was paid in cash at a straight time rate with no overtime premium.

The employer, however, gifted us with a clear paper trail. The employer required its workers to sign receipts for the straight-time cash payments every single time. In other words, the employer studiously documented each and every violation of the overtime laws. This was an FLSA Perry Mason moment—cue the crying employer caught red handed. They knew exactly what they were doing.

Most of our clients are government contractors that are subject to a wide range of rules that are designed to ensure that the government buys goods and services from honest, ethical businesses. This means that most of them operate their businesses with the expectation that key records could be scrutinized and that they bend rules at their peril. Their legal problems mostly arise out of mistakes or honest differences of opinion about how the law should be applied. A cursory review of our blog amply demonstrates that our clients’ world is complex. We do our best to guide them through this morass. And we zealously represent them to ensure that they are treated fairly.

Here, I guess you could say that “off the books” probably also means off the charts - in a bad way. Some of our clients may have made some royally big mistakes, had dishonest employees, or have been a bit lax in their compliance practices. However, I don’t recall an instance when one of our clients so brazenly cheated their employees.