Savard Marine Services is a labor services company that provides temporary skilled and unskilled labor to clients for various land and marine-based construction occupations. The company is headquartered in Baton Rouge and has branch establishments in Lafayette, Metairie and Gonzales.
Investigators from the division’s New Orleans District Office found the company mischaracterized certain wages as per diem payments and impermissibly excluded these wages when calculating overtime premiums, thus denying employees earned overtime compensation. This improper pay practice also resulted in record-keeping violations because the employer failed to maintain accurate records of employees’ wages and actual hours worked, as required by the FLSA.
“Unfortunately, we are seeing too many companies like Savard Marine Services utilizing the same evasive pay practice to lower overtime premiums. We are concerned that, in this competitive market, labor service providers are looking to each other for new and creative ways to cut labor costs,” said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. “We are focused on identifying and remedying labor violations involving temporary employment arrangements, and we are working with stakeholders and state agencies to ensure compliance with all applicable laws. In keeping with our partnership with the Louisiana Workforce Commission, this case has also been referred to them for consideration.”
Following the investigation, Savard Marine Services agreed to pay all back wages due to the affected employees. Payment of back wages is ongoing. The company also signed a settlement agreement with the department, committing to specific compliance assurance measures to prevent future violations of the FLSA. These measures include setting standards to identify and compensate workers correctly who qualify for bona fide per diem payments, paying accurate overtime and ensuring per diem payments are not automatically excluded from overtime calculations; informing employees about their pay and employment conditions; and obtaining written acknowledgment from employees that they understand the criteria for receipt of per diem payments.
Last month, the department issued a press release on Hutco Inc., a major industrial services employment agency in Louisiana, which utilized the same improper pay practice of mischaracterizing wages as per diem payments. The case resulted in nearly $2 million in overtime back wages owed to more than 2,200 employees. For more information see the department’s May 6 press release at http://www.dol.gov/whd/media/press/whdpressVB3.asp?pressdoc=Southwest/20130506.xml.
An employee’s regular pay rate, upon which overtime must be computed, includes all wages for employment, except certain payments excluded by the FLSA, such as reimbursements for work-related expenses. Payments reasonably approximating travel or other expenses incurred on the employer’s behalf may be excluded from the employee’s regular rate of pay when computing overtime. However, where an employee receives such payments but actually incurs no such additional expenses, such payments do not constitute bona fide reimbursements and must be included in the employee’s regular rate of pay for purposes of computing an overtime premium.
The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also are required to maintain accurate time and payroll records.
Source: DOL
This information is intended to be
educational and should not be considered legal advice on any specific matter.
