They say two things in life are certain – death and taxes. As we grow ever closer to the tax filing deadline of April 15, you can count on a couple of other things as well: tax preparers will be working overtime, and the U.S. Department of Labor’s Wage and Hour Division will continue to enforce workplace protections for them and any other employees burning the midnight oil.
Our agency means business when it comes to our mission of promoting and achieving compliance with federal labor standards to protect and enhance the welfare of the nation’s workforce. In our effort to do so, we use a robust variety of enforcement tools, including subpoenas, search warrants, consent judgments, debarments, the assessment of liquidated damages, civil money penalties and garnishments where appropriate.
These tools led to the Bluefield, Va., accounting firm of Raymond A. Froy Jr., CPA, P.C., recently paying $22,006 in back wages and liquidated damages for minimum wage, overtime and record-keeping violations of the Fair Labor Standards Act.
As a certified public accountant and president of the firm, Mr. Froy advises a large clientele of businesses and accounting firms across a nine-state region on various issues, including, ironically, compliance with federal employment laws. During our investigation of his firm, Mr. Froy refused to cooperate, seemingly with the intent to avoid corrective action. Unfortunately, this is an all-too-common situation. The Wage and Hour Division persisted, however, and obtained the records we needed through a subpoena. The investigation found that, among other violations, the company paid tax preparers “straight-time” wages for all hours worked, rather than time and one-half their regular rates of pay for hours worked in excess of 40 per week, as required.
This case eventually escalated to litigation. The result? Froy’s firm entered into a consent judgment with the department and agreed to pay $17,003 in back wages and liquidated damages to six employees. The consent judgment further stipulated that, if the terms of the agreement were not met, the firm would become liable for an additional $5,002 in liquidated damages. That is exactly what happened. Because the employer did not pay the full amount agreed upon, the Wage and Hour Division went back to court and secured a judge’s garnishment order. We collected the additional liquidated damages and remaining unpaid back wages, bringing the total amount paid to $22,006.
As this case highlights, we mean business. We encourage other employers to learn from this case, to review their pay practices and to make diligent efforts to limit future liability by complying with the FLSA. The president recently highlighted the importance of these protections for the American workforce when he signed a memorandum on overtime directing the secretary of labor to update overtime regulations.
Employers can call the Wage and Hour Division confidentially at 1-866-4US-WAGE or visit www.dol.gov/whd to learn about the laws we enforce. In this season of tax preparation − and throughout the year − rest assured that if tax preparers, temporary workers or any other employees find themselves “taxed” by working overtime but not compensated, we will be watching to ensure that they are properly paid for their efforts. Like death and taxes, you can count on it.
John DuMont is the director of the Wage and Hour Division’s district office in Pittsburgh, Pa., which conducted the investigation of Raymond Froy’s accounting firm.
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