Do You Pay Your Workers Properly?

Most contractors think they probably do; some are undoubtedly correct. But according to an attorney quoted in the Dallas Morning News between 60% and 80% of employers are not in compliance with the Fair Labor Standards Act -- and the Dept. of Labor is cracking down.

Think about these questions: Do you have safety meetings either before or after a shift? Do you have "job huddles" in advance of a project, before your crew leaves the yard? After they return at the end of the day? Do you require them to gas up their work vehicle? If you require them to wear a uniform do they don it once at your yard?

While there are some nuances to consider, in all of those situations employees probably should be paid for the time spent. If that results in OT, then they should be paid OT wages.

Don't agree? (I've talked with many contractors who conduct both 5-minute huddles and 15-minute safety meetings off the time card.) Read on because the issue of worker compensation can be trickier than you think, and recently a number of companies have learned that the hard way.

* In January more than 250 workers employed by a temp agency were awarded $244,000 in overtime back pay because they had been misclassified as "exempt" workers -- but some worked as many 79 hours a week without receiving OT pay.

* 280 workers in a Texas juvenile detention facility received $159,000 in unpaid OT... Why? Because the company, 4M Youth Services, required their attendance at safety meetings before shifts started but did not pay them for that time.

If that last example doesn't get you wondering about your business, it should.

The number of cases investigated by the Dept. of Labor almost doubled from 642 in 2008 to 1,193 in 2011. Theories of reasons for the increase include employers in a weak economy trying to get more production out of their workforce while holding down labor and additional funding for the Dept. of Labor -- but the bottom line is many employers out there are violating the law.

Sometimes its because the law is vague or even confusing, especially in these days of a mobile workforce tied to the office via smart phone and iPad, independent contractors and people working from home offices. But in the construction industry much of that doesn't apply and employers need to make sure they are classifying workers properly (for example supervisors and managers must actually supervise people and manage projects) and compensating them appropriately.

If any of this has you wondering it's probably worth a call to your accountant.