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How Does the DOL Recoup Back Pay?

How Does the DOL Recoup Back Pay?

Imagine how difficult and frustrating it would be if you didn’t get paid for a day, a week, or even three weeks of hard work. This happens to thousands of employees every year. 

In 2023, the Department of Labor (DOL) successfully recouped more than $274 million in back pay and damages. More than $156 million of that amount was recovered in back wages to pay 135,067 employees their rightful earnings. 

By industry, the DOL recouped:

  • $31.8M for workers in health care

  • $35.5M for workers in construction

  • More than $6.8M for agriculture workers

  • More than $8.3M for retail workers

  • More than $29.6M for workers in food service

  • More than $12M for workers in building services  

 

 

What Is Back Pay?

The Fair Labor Standards Act (FLSA), enforced by the Wage and Hour Division (WHD) of the DOL, requires employers to pay employees on time for all hours of work completed. Back pay refers to payment for work done in the past that is owed to an employee. An employee may be entitled to back pay if: 

  • HR needed additional time to process payment after a promotion, raise, or bonus 

  • They were paid less than minimum wage 

  • They experienced salary discrimination

  • They were paid less than the payment amount previously agreed to 

  • HR made a payroll miscalculation (PTO, commissions, overtime, etc.) 

  • They were wrongfully terminated from their position

In the case of wrongful termination, the employee would be entitled to “lost wages” or wages they would have earned had they not been terminated.

 

How Does Back Pay Work?

Understanding how back pay works is essential to ensuring your payroll remains compliant and your workforce is compensated fairly. If employees do not receive earned payment from their employer, they can file a claim with the Wage and Hour Division (WHD) of the Department of Labor within two years of the incident. If the FLSA violation was willful, the statute of limitations extends to three years. 

 

Wage and Hour Division (WHD) Investigation Process

An employee can file a confidential claim by mail, online, or at an office of the WHD. After the claim is filed, the WHD determines if an investigation is the best next step. The investigation process consists of the following stages:

  1. Initial conference with the employer and a tour of the employer’s establishment

  2. Private employee interviews

  3. Record reviews to determine compliance 

  4. Final conference to discuss violations and how to correct them. In this stage, the investigator requests payment of back wages on behalf of the employee 

  5. Employers must comply with the WHD investigator’s decision on payment of back wages 

Keep in mind that the FLSA prohibits employers from retaliating against employees who exercise their rights under the FLSA. Individuals who file a complaint or provide information to the WHD during the investigation are protected under the FLSA and cannot be discriminated against or terminated as a result.  

 

How to Avoid Payroll Errors and Remain Compliant 

1. Use an HRIS 

Using an all-in-one HRIS like BerniePortal allows employers to more easily run accurate payroll. The system will automatically populate data from Benefits Administration, PTO tracking, and Time and Attendance for more accurate pay and deductions. 


2. Respond promptly to employee concerns 

Most people want to give their employer the benefit of the doubt. Often, employees who notice pay errors will reach out to HR prior to taking legal action. 

When an employee informs you of a paycheck error, your job is to conduct a timely investigation and keep the employee in the loop. If the employee’s claims are true, let them know the exact date the back pay will be issued. Addressing employee concerns before the Wage and Hour Division gets involved can save your organization thousands of dollars in liquidated damages and court costs. 

 

3. Maintain accurate and up-to-date records

If the WHD comes knocking on your door, you must have accurate and updated records to show them. The FLSA requires employers to keep records on wages, hours, overtime pay, and other items. For an extensive list, check out our blog on HR employee record retention guidelines.

 

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Additional Resources

You can stay informed, educated, and up to date with important HR topics using BerniePortal’s comprehensive resources:

  • BernieU—free online HR courses, approved for SHRM and HRCI recertification credit
  • BerniePortal Blog—a one-stop shop for HR industry news
  • HR Glossary—featuring the most common HR terms, acronyms, and compliance
  • Resource Library—essential guides covering a comprehensive list of HR topics
  • HR Party of One—our popular YouTube series and podcast, covering emerging HR trends and enduring HR topics
  • Community—the HR Party of One Community forum, a place devoted to HR professionals to ask questions, learn more, and help others

 

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