USDOL is famous for requiring three years’ of payroll information during a FLSA investigation. They often assess civil money penalties when FLSA violations are determined to be “willful”. So, what is the actual definition of the word willful?
“the findings of the relevant enforcement agency, court, arbitrator, or arbitral panel support a conclusion that the contractor . . . knew that its conduct was prohibited by any of the Labor Laws or showed reckless disregard for, or acted with plain indifference to, whether its conduct was prohibited by one or more requirements of the Labor Laws.”
While there is controversy in the legal world as to whether or not this definition is in line with past definitions of the word willful, this is the definition in the latest Rule applying to government contractors. So, should all employers be careful to stay clear of “plain indifference”. Absolutely!
In the classes I teach around the country, HR and Payroll managers tell me they would not often have an answer for the question: “What made you think this was a proper way to do ‘it’?” This question is #1 when any type of audit or investigation is conducted. Giving an answer which indicates you just never thought about it or you have just always done it this way is possibly an indication of plain indifference toward employment law. The DOL may call this willful and double or even triple your damages.
We know that taking care of the people who work for our company is really Job 1 for HR, Payroll, OSHA and any other employee related function. So, showing any sort of indifference or lackadaisical attitude toward the law is unacceptable to the enforcement agencies and should be unacceptable to our own management team. Sadly, it is often the owner or person I like to call “Big Boss” – who becomes overwhelmed with problems like budget – that forgets to remember obedience to the law is not an option. We must take this seriously. Small businesses get hit with actions, too. These are not just big business problems.
So, take it seriously and remember personal liability is real. Even though ‘Big Boss’ may not be keen on obedience to the law, managers and supervisors can be held personally liable for participation in such plain indifference to employment law.
Until Next Time, Be Audit-Secure!