$35,037,586 in Back Wages to be Paid to Workers by Puerto Rico for FLSA Violations

Monday, April 15, 2013

Following an investigation by the U.S. Department of Labor's Wage and Hour Division that found violations of the federal Fair Labor Standards Act's overtime and record-keeping provisions, the commonwealth of Puerto Rico has agreed to pay $35,037,586 in back wages and interest to 4,490 current and former employees of the territory's Department of Corrections and Rehabilitation. This is one of the largest settlements in the Wage and Hour Division's history.

The agreement is a part of a consent judgment approved today by Judge Juan M. Pérez Giménez of the U.S. District Court for the Commonwealth of Puerto Rico. Officials representing the commonwealth and the Department of Corrections and Rehabilitation also have agreed to take significant steps to ensure future compliance with the law, including installing an electronic timekeeping system at its facilities, training supervisors in the use of the new system, hiring additional staff to reduce the need for overtime and adjusting daily tours of duty for guards.

The commonwealth government already has restored more than $15 million in back wages due to employees for overtime hours worked since November 2011. The remaining back wages will be paid on an installment basis, and distributed to current and former employees as scheduled through 2016.

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 hourly rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. In general, "hours worked" includes all time an employee must be on duty, or on the employer's premises or at any other prescribed place of work, from the beginning of the first principal work activity to the end of the last principal activity of the workday. Additionally, the law requires that accurate records of employees' wages, hours and other conditions of employment be maintained.

Under certain conditions, employees of state or local government agencies may receive compensatory time off, at a rate of not less than one and one-half hours for each overtime hour worked, instead of cash overtime pay. Law enforcement personnel may accrue or "bank" up to 480 hours of comp time. In this case, the Department of Corrections and Rehabilitation regularly allowed employees' comp time "banks" to greatly exceed 480 hours. The back wages found due for the employees are the cash amounts of unpaid comp time accrued in excess of the limit.

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