Arkansas' Child Care Industry to Pay Approximately $590,000 for Violations of the Fair Labor Standards Act

Friday, March 1, 2013

An ongoing enforcement initiative conducted by the U.S. Department of Labor’s Wage and Hour Division, which focused on the child care industry in Arkansas, has uncovered significant violations of the minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act. Under the initiative, the division’s Little Rock District Office conducted 100 investigations of child care providers in its jurisdiction in 2012, resulting in approximately $585,716 in unpaid minimum wage and overtime compensation for 817 current and former employees.

Common violations found include employers failing to count time spent when employees attend mandatory training courses as compensable; improperly classifying FLSA-covered employees as exempt from receiving overtime compensation; making illegal deductions from employees’ wages that resulted in earnings falling below the federal minimum wage; paying employees straight time wages rather than time and one-half their regular rates of pay for hours worked over 40 in a workweek; missed payrolls that resulted in additional minimum wage and overtime violations; and failing to maintain the required record keeping.

Wage and Hour investigators continue to make unannounced visits to child care service providers throughout Arkansas, including franchises, multiple employer locations and facilities operating under a state license. Investigations include thorough inspections of payroll records and employment practices, as well as employee interviews, to ensure compliance with all applicable labor standards.

In addition to enforcement efforts, the division is conducting outreach to workers, employee associations, community organizations, state and local agencies, and other stakeholders to inform them of the ongoing initiative and encourage their participation in promoting industrywide compliance. The division is continuing to provide compliance assistance and education to employers, industry associations and state licensing agencies on all applicable regulations, and will continue the initiative in 2013.

The child care industry employs many low-wage workers who, due to a lack of knowledge of the law or hesitance to exercise their rights, are vulnerable to disparate treatment and labor violations. In addition to Arkansas, the Wage and Hour Division is conducting similar enforcement initiatives in Colorado, Louisiana, Montana, New Mexico, Texas, North Dakota and South Dakota.

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. Additionally, employers must maintain accurate time and payroll records.

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