Following an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD), Lippert Components will pay $338,151 in overtime back wages and liquidated damages to 1,199 current and former employees. The WHD found violations of the overtime requirements of the Fair Labor Standards Act (FLSA) at 53 plants nationwide.
WHD investigators found that when determining overtime rates, LCI failed to include in the calculation certain bonuses employees had earned. Instead of computing overtime at time-and-one-half employees’ total straight time earnings, including these bonuses, the employer based that calculation only on employees’ pre-bonus earnings. Excluding the bonuses resulted in artificially lowered overtime rates, violating the FLSA.
“Employers are obligated to pay employees all the wages they have legally earned,” said Patricia Lewis, wage and hour division district director in Indianapolis. “Employers have an obligation to understand and to comply with the labor laws applicable to their business. We encourage employers to make use of the many tools we provide to help them, and to contact the Wage and Hour Division for assistance to ensure they understand their obligations.”
In September 2016, Lippert Components began including the bonuses in question in employee’s regular rates of pay in overtime work weeks. However, the employer failed to make any retro-active payments. As a result of this investigation the employer paid back wages for pay periods preceding the date that they began to comply with the law.