FLSA Compliance: The Three Mistakes That Cost Employers Millions

The Fair Labor Standards Act is a minefield, and we see employers step on the same landmines over and over. Here are the three costliest mistakes:

Think you’ve got your employee classifications figured out? Think again.

1. The “Contractor” Who Isn’t

You call them independent contractors. Your contract says independent contractor. Doesn’t matter. The DOL looks at reality, not labels. If you control their work, provide their equipment, and pay them regularly—that’s an employee. And you just inherited years of unpaid overtime claims.

In Galarza v. One Call Claims, calling insurance adjusters “contractors” didn’t save the company from a massive overtime bill. The work relationship told the real story.

2. The “Manager” Who Doesn’t Manage

Slapping a manager title on someone and paying them salary doesn’t make them overtime-exempt. If they’re not actually supervising employees or making real personnel decisions, they’re entitled to overtime. Period.

The salary threshold is $684/week, but that’s just the starting line. The duties test is where employers lose. What’s your “manager” actually doing every day? If it’s not managing people, you’ve got a problem.

3. The Hours You’re Not Tracking

Remote employee answering emails at 9 PM? That’s compensable time. Hourly worker changing into required uniforms? Compensable. Drive time between job sites? Compensable.

You’re responsible for tracking all work time—even the time you didn’t authorize. “I didn’t know they were working” won’t save you from a DOL audit.

The Bottom Line

FLSA violations aren’t just expensive—they’re avoidable. Regular compliance audits catch problems before they become lawsuits.

Need a wage and hour audit? We’ll tell you where you’re exposed—before the DOL does. We can help.