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There are many consequences for breaking the FLSA, including willful violations. If an employer fails to convince the court that they acted in good faith and had good reason to believe that their actions did not violate the FLSA, the court will conclude that they intentionally violated the law. Therefore, a willful infraction is one in which an employer has knowledge of the law but has purposefully and repeatedly disregarded the FLSA. In this case, hotel Oasis, (the defendant), had a willful violation as evidenced by the two sets of books they had presented- one showing fewer hours at a higher rate, and the other showing more hours at a sub-minimum wage rate. Defendants intentionally failed to keep accurate records of the time worked by its employees, had overtime pay violations, intentionally manipulated employee records and disguised minimum wage. All these was sufficient ground for the court to conclude that Oasis intentionally failed to act in compliance with the FLSA. This, as held by the court, was a conclusion arrived at after carefully listening to the employee's testimony and the defendants own documentary evidence which resulted to the defendant being awarded liquidated damages based on the findings of willful violation. (Two Sets of Books, One Big Penalty)
What are the standards for holding an officer liable for FLSA violations?
Liability for FLSA violations states that officers of a corporation can be held individually liable for the corporation's violations. Under the FLSA, an "employer" is "any person acting directly or indirectly in the interest of an employer in relation to an employee." FLSA holds personal liability for corporate officers with operational control of significant aspects of the corporation's day to day functions, such as compensation of employees, and officers who personally make decisions to continue operations despite financial adversity during the period of non-payment. However, not every corporate employee who exercised supervisory control should be held personally liable because of several factors important to the personal liability analysis. They include; individual's ownership interest, the degree of control over corporation's financial affairs and compensation practices as well as the role in causing the corporation to compensate or not to compensate employees in accordance with the FLSA. (Two Sets of Books, One Big Penalty)
A violation of FLSA requirement for a company to keep accurate records and wages of its employees as well as hours worked is a case that could hold an officer liable for a personal penalty. Lugo, for example, was held personally liable for Oasis's compensation decisions because he was the president of the corporation hence, had ultimate control over the business day-to-day operations. He was principally in charge of hiring and firing employees, requiring employees to attend meetings unpaid and setting employees' wages and schedules. This made him instrumental in causing the corporation to violate the FLSA.
Explain what liquidated damages are and when they are available for recovery.
Liquidated damages are the double the amount of unpaid back wages entitled to a successful employee paid by an employer who has violated the FLSA by failing to pay the employee for off the clockwork. The FLSA authorizes that the Secretary of Labour recovers on behalf of employees’ unpaid wages, overtime compensation plus an equal amount in liquidated damages.
The only way an employer can escape liquidated damages is when they show to the satisfaction of the court that they acted in good faith and had reasonable grounds for believing that their acts did not violate the FLSA. Hence, liquidated damages are available for recovery when an employer has unpaid wages and fails to prove to the court that they acted in good faith and reasonably believed that they did not require to pay the wages in question. (Barreiror)
With regard to this case, the court awarded liquidated damages since the Defendant failed to show good faith with respect to the applicable statute of limitations.
Barreiror, S. (n.d.). Liquidated Damages and Punitive Damages under the FLSA. Wage and Hour Law.
(n.d.). Two Sets of Books, One Big Penalty. In Management of Employee Welfare.
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