Phoenix foster care housing provider ordered to pay more than $186K in back wages to 98 workers wrongly classified as 'exempt' from overtime

Employer: Family Support Resources Inc.

Sites: 24 residential foster care housing sites throughout Phoenix metro area

Investigation findings: Family Support Resources wrongly classified House Managers and Assistant House Managers who worked primarily as caregivers as exempt from overtime pay. As a result, the company did not pay overtime for hours worked beyond 40 in a work week, in violation of the Fair Labor Standards Act. This employer receives funding from the Arizona's Department of Child Safety.

Resolution: Under the terms of a consent judgment filed with the U.S. District Court for the District of Arizona, Family Support Resources, and owners Larry Douglas and Alta Douglas, will pay $186,222 in unpaid minimum wage and overtime back wages and $1,946 in interest to 98 workers. The employer will also pay $30,184 in civil money penalties. The case was investigated by the U.S. Department of Labor's Wage and Hour Division in Phoenix, and litigated by the department's Regional Solicitor's office.

Quote: "It is critically important for employers to properly classify their workers," said Eric Murray, director of the Wage and Hour Division's district office in Phoenix. "Shorting workers their hard-earned wages not only harms the workers and their families, but also harms other employers who are playing by the rules. The Wage and Hour Division offers a great deal of compliance assistance to help employers understand and comply with federal labor laws and to ensure that workers receive all of the wages they have earned. We will remain vigilant in our enforcement of a fair day's pay for a fair day's work."

Information: Simply paying an employee a salary does not necessarily mean the employee is not eligible for overtime. The FLSA provides an exemption from both minimum wage and overtime pay requirements for individuals employed in bona fide executive, administrative, professional and outside sales positions, as well as certain computer employees. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Job titles do not determine exempt status. In order for an exemption to apply, an employee's specific job duties and salary must meet all the requirements of the department's regulations. On June 30, 2015, the Wage and Hour Division announced a Notice of Proposed Rulemaking (NPRM) to update the regulations defining which white collar workers are eligible to receive pay for hours worked over 40 in a workweek. For more information, please visit www.dol.gov/whd/overtime/NPRM2015.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour, as well as time and one-half their regular rates for every hour they work beyond 40 per week. The law also requires employers to maintain accurate records of employees' wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law. For more information about federal wage laws administered by the Wage and Hour Division, call the agency's toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.