Wage and Hour Case Studies - Today's DOL Violation Trends
September 28, 2022
Wage and Hour Case Studies - Today's DOL Violation Trends

The U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) is tasked with enforcing employment laws that affect more than 148 million workers. The WHD enforces federal minimum wage, overtime pay, recordkeeping and child labor requirements of the Fair Labor Standards Act (FLSA), as well as the Family and Medical Leave Act (FMLA) and a number of other employment standards and worker protections. According to the DOL, the core enforcement obligations of the WHD’s investigators include conducting investigations to determine if employers are paying workers and affording them their rights as required by law; helping ensure that law-abiding employers are not undercut by employers who violate the law; promoting compliance through outreach and public education initiatives; and supporting efforts to combat worker retaliation and worker misclassification as independent contractors. In fiscal year 2021, the WHD collected $230 million in wages owed to 190,000 workers, the DOL reported.


Generally, the WHD will initiate an investigation after a current or former employee files a complaint. A WHD investigator may visit an employer to provide information about the application of and compliance with the laws administered

by the WHD. An investigator may also visit an organization to conduct interviews, examine time clocks and ensure all employment notifications are available to employees. Additionally, they may review up to three years of wage and hour records to determine whether there are any violations in an employer’s payroll practices.


In addition to complaints, the WHD selects certain businesses and industries for investigation. For example, the WHD often targets low-wage industries due to high rates of violations, the employment of vulnerable workers or rapid industry changes, such as growth or decline. Occasionally, several organizations in a specific geographic area will be examined.


At the start of 2022, the DOL announced an initiative to hire 100 additional WHD investigators, signaling a potential increase in enforcement in 2022 and beyond. This initiative means now is the time for employers to review their wage and hour practices to ensure compliance with all relevant laws.


This article contains case studies that explore the most recent, real-world examples of employers found to be in violation of wage and hour laws. The case studies include snapshots of violations and general guidance on how employers can prevent similar issues. Employers can examine these case studies to learn from the mistakes of others in comparable industries and avoid costly consequences.


Real-world Case Studies


TAMPA, FL—A DOL investigation uncovered child labor violations by a fast-food restaurant franchisee. The franchisee had to pay more than $12,000 in civil monetary penalties.


What went wrong:

  • The organization allowed 17 employees who were minors—between ages 14 and 15—to work past 7 p.m.
  • The organization also allowed minor employees to work more than three hours during a school day when doing so was not permitted.


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ROCHESTER, NY—A DOL investigation found that a health care agency failed to pay its home health care aids overtime wages. The organization was forced to pay more than $228,000 in back wages for the 260 affected workers.


What went wrong:

  • Although the organization paid its health care aids overtime for hours worked over 44, it failed to pay workers time-and-a-half wages for hours between 40 and 44 they worked per week.


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NEW ORLEANS—A DOL investigation discovered that two contractors misclassified their painters and drywall workers as independent contractors. The organizations were forced to pay more than $246,000 in back wages for 306 workers.


What went wrong:

  • One organization misclassified its workers as independent contractors.
  • The same organization also failed to pay workers time-and-a-half overtime wages after they exceeded 40 hours in a workweek and instead used their regular rate of pay.
  • Both organizations failed to maintain complete and accurate records of the hours their employees worked.
  • The DOL determined that a joint employment relationship existed between the two organizations and, as a result, they were both liable to pay back wages.


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ATLANTA—A DOL investigation found that the Georgia Department of Public Health wrongly disciplined and terminated an employee for absences protected under the FMLA. The department was ordered to pay more than $77,000 in back wages and reinstate the employee.


What went wrong:

  • The department denied the employee’s request for leave for an FMLA-qualified condition.
  • The employee’s denial of FMLA benefits resulted in wrongful discipline and subsequent termination.


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Avoiding Violations

As illustrated by the case studies, avoiding wage and hour violations isn’t always easy. Due to the complex nature of employment laws, compliance is an ongoing challenge for employers. Reviewing these laws and regulations infrequently or only a handful of times is rarely sufficient, but by reviewing these laws regularly, employers can keep their businesses compliant and their workers satisfied. Below is general guidance related to the issues discussed earlier, categorized by violation type.


Child Labor Violations

Hiring minors comes with greater employer responsibilities, as minors have a number of specific wage and hour protections. Failing to comply with laws protecting this worker segment can be particularly costly.


The DOL recently publicized investigations uncovering child labor law violations. The WHD’s recent investigations of three grocery store operators in Idaho and Oregon resulted in more than $240,000 in civil penalties and $114,382 in unpaid overtime and liquidated damages for 266 employees. From 2017 to 2021, the DOL identified more than 4,000 cases of child labor law violations, finding more than 13,000 youth-aged workers employed in a violation.


In the Tampa, Florida, case study detailed in this article, minors were allowed to work later and more often than permitted by law. All of these instances are violations of the child labor provisions of the FLSA. Perhaps this was due to a shortage of workers, and only minors were available for specific positions and hours. Despite challenges in the current labor market, employers must remain compliant with all relevant state and federal laws governing child labor.


Employers should also consider regularly consulting with attorneys to ensure policies and practices are up to date and compliant.


Overtime Violations

The FLSA requires employers to pay covered nonexempt employees overtime wages—at a rate of time-and-a-half—if they exceed 40 hours in a workweek. Some companies utilize a variety of tactics to avoid paying these wages, including those that are unlawful.


In this article’s Rochester, New York, case study, the health care agency maintained and followed a practice in which home health care aids were paid straight time until they had worked more than 44 hours in a week. However, these employees were eligible for overtime pay once they had worked more than 40 hours. This case study demonstrates the importance of properly constructed and regularly reviewed workplace policies and manager training. Consulting with experts and having them review policies prior to their enforcement could save employers tens of thousands of dollars down the line. According to the DOL, employers may also contact the WHD to ensure they understand their responsibilities and avoid similar violations.


Employee Misclassification

One of the most serious problems facing employers is the misclassification of employees as independent contractors. Under the FLSA, employees are entitled to basic workplace protections that do not extend to independent contractors, such as minimum wage, overtime pay, protected FMLA leave, antidiscrimination and antiretaliation protections, workers’ compensation and unemployment insurance. The WHD is responsible for determining whether an employee has been misclassified as an independent contractor. Employers who misclassify workers may be forced to pay back wages, liquidated damages, attorneys’ fees and costs.


In the New Orleans, Louisiana, case study examined in this article, one contractor misclassified its workers as independent contractors. The workers were paid straight-time rates for all hours they worked. Because these workers were employees, they should have been paid time-and-a-half wages after they surpassed 40 hours in a workweek. Both contractors were also required to keep complete and accurate records of all hours their employees worked. This case reveals the importance of correctly classifying workers at the outset of the relationship and ensuring accurate and complete records are kept.


Sometimes it can be difficult to determine whether a worker is an employee or an independent contractor. However, seeking legal advice in these situations can help curtail potential violations and costly mistakes.


FMLA Violations

The FMLA protects workers who need to take a prolonged absence due to a qualified family or medical reason. This law was enacted so employees could deal with serious and potentially unexpected life circumstances without losing their jobs. Yet, an employee can follow all proper procedures, and an untrained or uninformed manager may still violate the law, resulting in costly consequences.


In this article’s Atlanta, Georgia, case study, the Georgia Department of Public Health wrongly denied the employee’s request for FMLA leave, believing the employee’s condition did not qualify for leave. As a result of the denied leave request, the employee was disciplined and subsequently terminated due to absences related to their FMLA-qualified condition. Employers must be aware of conditions that qualify for FMLA leave to avoid wrongfully disciplining or terminating otherwise protected employees.


FMLA violations can be particularly costly, as they may involve paying back employees’ lost wages and reinstating lost benefits. Employers need to ensure managers, employees and other stakeholders understand their FMLA rights. This includes knowing how to submit FMLA requests, understanding situations that might qualify for FMLA leave and comprehending workplace guarantees that come with this leave (e.g., job protection). Understanding these details can help prevent wrongful termination and significant monetary penalties.

 

Conclusion

These wage and hour violation case studies demonstrate how easy it can be for an employer to face challenges related to wage and hour regulations. That’s why it’s so important for employers to seek professional guidance before making potentially costly decisions. By learning from these employers’ mistakes, others in similar industries can avoid major violations and prevent DOL audits.

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Embrace the Future of HCM: AI, Automation, and Scalability | Simco + isolved

March 24, 2025
The future of work is changing fast, and HR leaders are taking notice. More than half of companies are planning to switch their HCM platform this year—but not just for any solution. They’re looking for intelligent, scalable, and AI-driven technology that doesn’t just process payroll but actively enhances business operations. The days of rigid, outdated systems are over. Now, businesses need platforms that adapt, automate, and evolve alongside them. At Simco, we’re passionate about delivering the most advanced, transformative solutions to our clients. That’s why we’ve partnered with isolved, a recognized leader in the HCM space, to provide our clients with a powerful, AI-enabled platform that makes workforce management effortless. With a focus on automation, predictive analytics, and employee experience, isolved is changing the game for small and mid-sized businesses—and we’re here to help you make the most of it. Why isolved Stands Out in the HCM Market For the second consecutive year, Nucleus Research has named isolved a leader in its HCM Value Matrix for Small and Medium-Sized Businesses (SMBs). The firm’s analysis highlights isolved’s enterprise-grade functionality, designed specifically for SMBs looking to streamline operations, enhance compliance, and leverage AI to drive efficiency. isolved’s adaptability ensures it evolves alongside customer needs. Whether an organization’s HR function matures or its priorities shift, isolved is uniquely positioned to support its success through continuous innovation. In 2024, the company launched 480+ product enhancements directly driven by direct customer feedback. Nucleus Research’s report also highlights several key updates, including: isolved's Candidate Match Tool , an AI-powered feature that evaluates and ranks candidates, streamlining the hiring process. Enhanced Talent Acquisition Services , including recruitment process outsourcing (RPO), job placement assistance, and comprehensive hiring solutions for quick-service restaurants (QSRs). A Broadened Content Library, now with over 95,000 courses designed for employee training, compliance, and professional development. A Next-Gen Time Clock , featuring advanced facial recognition and remote access for secure and accurate time tracking. The Power of Partnership: Simco + isolved While technology is the foundation, the real value comes from how it’s applied. At Simco, we don’t just provide software—we offer a full-service HCM and advisory solution, ensuring that all aspects of workforce management integrate seamlessly. Our clients benefit from: A Dedicated Client Success Manager – Your go-to resource who oversees your relationship with Simco, ensuring that every service—HCM, HR advisory, benefits, insurance, and retirement—works together without gaps. A Fully Integrated HCM & Advisory Solution – No need to juggle multiple vendors for payroll, HR advisory, employee benefits, commercial insurance, and 401(k)/retirement plans. Simco is your one-stop shop for all workforce solutions. Strategic Guidance & Ongoing Optimization – We help businesses maximize their investment in HCM technology while aligning it with compliance, employee engagement, and long-term growth goals. As businesses evolve, so do their workforce management needs. By combining isolved’s leading-edge technology with Simco’s hands-on service and industry expertise, we help businesses stay ahead of change, improve efficiency, and create better employee experiences. Ready to explore the future of HCM? Contact us today to learn more about how we can transform your workforce operations!

How to Protect Your Business from Phishing Attacks and Spoofed Domains

March 3, 2025
Cybercriminals continue to evolve their tactics, making phishing attacks more sophisticated and harder to detect. Every day, countless phishing emails reach inboxes, often with the intent to steal sensitive information or spread malware. Unfortunately, many of these attacks succeed in just a matter of seconds— the median time for users to fall for phishing emails is less than 60 seconds according to the 2024 Verizon Data Breach Investigations Report . With stolen credentials being one of the most popular methods of attack, businesses face increasing risks as these types of cyber threats become more complex and dangerous. How Phishing and Spoofed Domains Work Phishing attacks aim to trick employees into revealing sensitive information, often through: Fraudulent Email Links – These emails appear to be from trusted sources but contain malicious links that install malware or steal login credentials. Look-Alike Domains – Hackers create fake websites that resemble real business portals, altering a single character in the domain (e.g., “micr0soft.com” instead of “microsoft.com”). Credential Theft – Once hackers obtain login credentials, they sell them on the dark web, leading to widespread data breaches. Red Flags: How to Identify a Phishing Email Unusual Sender Addresses – Cybercriminals often spoof email addresses to look like trusted sources. Carefully inspect the sender's domain name for typos, extra characters, or strange formatting. A genuine email from "paypal.com" could be faked as "paypall.com" or "paypal-support.com." Urgent or Threatening Language – Many phishing emails attempt to create a sense of urgency, claiming that an account will be suspended, a payment has failed, or legal action is imminent. If an email pressures you into immediate action, be suspicious. Unexpected Attachments or Links – Hover over hyperlinks before clicking to see the actual URL destination. If the web address looks unfamiliar or mismatched with the sender's identity, do not click. Similarly, attachments that appear out of context—especially ZIP files, PDFs, or Word documents—could contain malware. Requests for Sensitive Information – Legitimate organizations will never ask for passwords, Social Security numbers, or banking details via email. If an email requests confidential information, verify with the company directly using a trusted phone number. Generic Greetings or Poor Grammar – Emails that start with “Dear Customer” instead of your name, or those containing awkward phrasing and misspellings, often indicate phishing attempts. Many cybercriminals operate internationally and use machine translations, leading to unnatural wording. Best Practices to Protect Your Business Train Employees Regularly – Frequent security awareness training helps employees recognize phishing attempts. Past studies by Proofpoint show that companies with ongoing cybersecurity training reduce phishing-related breaches by up to 60%. Implement simulated phishing tests to reinforce learning. Enable Multi-Factor Authentication (MFA) – MFA significantly decreases the chances of an account being compromised, even if login credentials are stolen. Microsoft reports that MFA can block over 99% of automated cyberattacks . Ensure all employees activate MFA for business accounts. Verify Requests Independently – If an email asks for sensitive actions (e.g., wire transfers, login changes, or software downloads), confirm the request through a known and trusted contact method. Never use the phone number or link provided in the email —instead, visit the company's official website or call using a verified number. Monitor and Filter Emails – Implement robust email security tools that automatically flag suspicious messages. Advanced filtering systems, like those offered by Barracuda Networks, can block over 90% of phishing emails before they reach inboxes. Encourage a Report-First Culture – Employees should feel empowered to report suspicious emails even if they are unsure. IT teams can analyze these reports to strengthen cybersecurity measures. Early detection prevents widespread damage. Use a Password Manager – Employees often reuse passwords across multiple accounts, increasing security risks. Encourage the use of password managers like 1Password or LastPass to generate and store complex passwords securely. New Tactic: The Rise of QR Code Phishing ("Quishing") QR code phishing, or "quishing," is a new phishing tactic gaining momentum as attackers exploit the widespread use of QR codes. Unlike traditional phishing, which relies on malicious email links, quishing uses QR codes to redirect users to fake websites designed to steal login credentials. Several factors contribute to quishing's success: Ubiquity : QR codes are now commonly used for payments, tickets, and documents, reducing suspicion when they appear in emails. Minimal Text : Unlike traditional phishing emails, quishing messages often contain little text, making them harder for security systems to flag. Mobile Vulnerability : QR codes are scanned on personal devices, which typically lack the protection of corporate systems. According to Abnormal Security , 90% of quishing attacks involve credential phishing , where users are tricked into entering sensitive data. Another common tactic is using fraudulent MFA alerts, which account for 27% of attacks , while 21% involve fake document-signing requests . Final Thoughts At the end of the day, protecting your company from phishing and cyber threats requires more than just technology—it’s about the people behind it. By fostering a culture of awareness and encouraging open communication, you empower your employees to be the first line of defense. Together, with vigilance and the right tools in place, you can ensure the safety of your sensitive data and build a more secure future for your business.

7 Thoughtful Ways to Celebrate Employee Appreciation Day

February 28, 2025
Employee Appreciation Day, which falls on March 7th this year, is an ideal occasion to express gratitude for the hard work and dedication of your employees. At Simco, we recognize that employee appreciation shouldn’t be limited to just one day, but this day presents a special opportunity to go above and beyond in showing your team how much they mean to the success of your organization. When employees feel recognized and valued, it enhances morale, engagement, and ultimately, productivity. Here are several thoughtful and impactful ways to celebrate Employee Appreciation Day, creating lasting positive effects for both your employees and your company. 1. Personalized Appreciation Nothing shows employees you truly value them more than personalized recognition. Tailor your appreciation efforts to each individual, acknowledging their unique contributions and the impact they’ve made. Personalized gestures help employees feel recognized for the specific work they’ve done, making the appreciation feel authentic and meaningful. You can: Write Personalized Thank-You Notes : Take the time to write handwritten notes to your employees, thanking them for their specific achievements and how they contribute to the company’s overall success. Publicly Acknowledge Contributions : During a company meeting or via a group email, recognize each team member's individual contributions, celebrating their efforts with concrete examples. Employee Spotlights : Feature standout employees in your internal newsletter or on social media to highlight their unique strengths and hard work. 2. Host an Engaging Celebration Employee Appreciation Day is an excellent time to host a celebration that brings everyone together, whether virtually or in person. A well-planned event can boost morale and provide a chance for employees to connect with one another outside of their usual work routines. Ideas for celebration include: Catered Meals or Special Treats : Provide lunch, snacks, or a special treat to make the day feel celebratory. A fun lunch or dessert bar can offer an opportunity for employees to mingle and bond. Themed Events : Host a fun, themed event such as a retro office party or a “thank you” happy hour where employees can unwind and enjoy themselves. Virtual Celebration : For remote or hybrid teams, set up a virtual event like a game or trivia session where employees can engage and laugh together. 3. Offer Tangible Tokens of Appreciation While a simple thank-you is powerful, offering a meaningful gift can take employee appreciation to the next level. Thoughtful rewards can show your team that you not only recognize their hard work but are also willing to invest in their well-being. Consider: Gift Cards : Offer gift cards to popular retailers, restaurants, or online stores, allowing employees to pick out something they personally enjoy. Wellness Incentives : Gifts that promote health and wellness—such as fitness trackers, yoga classes, or access to mental health resources—show employees you care about their overall well-being. Company Merchandise : High-quality, branded merchandise like apparel, accessories, or tech gadgets can serve as a lasting reminder of your appreciation. 4. Invest in Professional Development One of the most meaningful ways to honor your employees is by helping them grow professionally. Employee Appreciation Day is a great time to invest in their future, whether through formal training, new opportunities, or fostering leadership skills. Ways to offer growth opportunities include: Learning Stipends : Offer financial support for employees to pursue further education, certifications, or online courses that align with their career goals. Internal Development Programs : Launch mentorship initiatives or leadership programs that enable employees to expand their skill sets within the organization. Growth Opportunities : Encourage employees to explore new roles or responsibilities that align with their career aspirations, reinforcing your commitment to their long-term success. 5. Encourage Peer Recognition Employee appreciation doesn’t have to be a one-way street from management to employees. Encouraging peer-to-peer recognition helps build a strong team culture, where employees feel supported and valued by their colleagues as well. This helps foster camaraderie and teamwork, which benefits the entire organization. Ideas for peer recognition: Peer-to-Peer Appreciation Platforms : Create an internal platform where employees can nominate or thank their colleagues for their contributions, highlighting specific ways they've gone above and beyond. Recognition Wall : Set up a virtual or physical wall where employees can post messages of appreciation for their peers, encouraging a culture of gratitude. Monthly Recognition : Implement a peer-nominated “Employee of the Month” program to recognize and reward employees for their ongoing contributions. 6. Give Back Employee Appreciation Day also provides an opportunity to show gratitude by giving back to the community. Many employees value working for companies that have a strong sense of corporate social responsibility. By organizing a charitable event or initiative, you demonstrate that your organization cares about making a positive difference beyond the workplace. Ideas for giving back include: Company Volunteer Days : Organize a day of service where employees can volunteer at a local charity or nonprofit, allowing them to contribute to causes they care about while bonding with their colleagues. Matching Donations : Offer to match employee donations to their favorite charities, demonstrating that you support their personal values and causes. Charitable Fundraising Events : Host fundraising activities or auctions with proceeds going to a charitable organization chosen by the team. 7. Seek Feedback Finally, a key part of showing appreciation is listening to your employees and gathering feedback on how they feel valued. Employee Appreciation Day offers the perfect occasion to ask for input on what makes them feel appreciated and what could be improved. This helps ensure that future efforts are even more meaningful. Ways to gather feedback: Anonymous Surveys : Send out a survey asking employees what makes them feel most appreciated and if they have any suggestions for improving recognition practices. One-on-One Check-ins : Arrange individual meetings with employees to hear their thoughts on workplace culture and recognition, providing an opportunity for honest feedback. Cultivating a Culture of Appreciation Year-Round Employee Appreciation Day is a special occasion, but the benefits of recognizing your team should last well beyond this single day. When employees feel consistently valued and appreciated, it leads to higher morale, greater job satisfaction, and increased engagement. By investing in recognition efforts, offering meaningful rewards, and fostering a culture of appreciation, you ensure that your team remains motivated, happy, and productive all year long. At Simco, we believe that lifting and supporting employees is integral to creating a thriving workplace. Whether you celebrate Employee Appreciation Day with gifts, events, or personalized recognition, taking the time to show gratitude is a small gesture that can have a lasting impact on both your employees and your business.

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