The previous nominee for the Worst Employer of 2017 may not end up as the last employer standing when I tally the votes at year’s end (at least according to some of the comments and tweets I received). Today’s nominee, however, should receive more universal support (or disgust, as the case may be).
How many sets of time and pay records should you keep on your employees? For your sake, I hope your answer is not any number greater than “one.”
In Perez v. EL TEQUILA, LLC (10th Cir. 2/7/17), the employer, a Tulsa, Oklahoma, area chain of Mexican restaurants, kept two sets of books — one that showed its employees working, and receiving compensation, for a maximum of 40 hours per week, and another that showed the actual amounts of time worked (which, to no one’s surprise, often totaled more than 40).
The Department of Labor investigated this employer four separate times for wage-and-hour violations.
Based solely on the bogus set of books, the employer passed the first investigation with a clean bill of health.
The second and third investigations uncovered the bogus time records at all four of the employer’s restaurants and resulted in a back-pay bill of nearly $650,000.
This employer, however, was not finished cheating its employees. Following these investigations, the employer began manually overriding its employees’ punch-ins and punch-outs, such that it still paid them for only 40 hours per week, even though they were working much longer. Those shenanigans resulted in a fourth investigation, and another $636,000 in back pay for unpaid overtime.
All told, this employer (which lost at both the trial court and the appellate court) ended up with a judgment against it totaling $2,137,627.44 (which included back pay and liquidated damages).
If you rip off your employees to the tune of $2-plus million in unpaid overtime, resulting from duplicate books and fabricated time records, you might be the worst employer of 2017.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. To comment, email firstname.lastname@example.org. Follow Hyman’s blog at Workforce.com/PracticalEmployer.