Overtime Advisor

How Not To Respond To A DOL Audit: Fur Company Gets Its Hide Tanned By the DOL

Accused of doing just about everything wrong possible under the wage and hour law, a Boston processer of hides and furs is being sued by the DOL in federal court seeking $1,000,000.00 in back wages and damages.  According to the DOL, the company engaged in repeated “knowing, deliberate and intentional violations.” 

The DOL conducted an investigation which the company apparently attempted to thwart by, for example, ordering “employees to hide in a nearby house” when the DOL investigators arrived, thus frustrating efforts to interview the employees.  After the company’s employees were reached by the DOL and interviewed—the company, Boston Hides & Furs Ltd., fired them.  According to the DOL, the company “employees worked approximately 10 hours per day, six days per week processing hides and furs for shipping to tanneries. These workers were paid a daily cash wage of $50 to $70, which amounted to an hourly pay rate far below the federal minimum wage of $7.25 per hour. The employees also were not paid time and one-half the required state minimum wage of $8 applicable for those hours worked above 40 in a week. Additionally, the defendants failed to keep adequate records of the workers' employment, work hours and pay rates . . . .”

Clearly, the company just compounded their errors by failing to cooperate with the DOL during the course of the investigation.  When the DOL comes knocking it is key to cooperate with the DOL investigator—while still retaining an employment lawyer who can protect your rights and help present your best defense.  The cost of fighting a federal lawsuit (and then having to pay whatever resulting back wages, penalties and damages are deemed to be owed) is most usually far greater than the company would have needed to pay had it focused at the outset on resolving the investigation.  Of course, the sooner a company can bring itself in compliance with the wage and hour laws the less it will be exposed to such audits and the often substantial liability that follows them.

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