The U.S. Department of Labor’s Wage & Hour Division has initiated an investigation of the Commonwealth of Pennsylvania, after it has been accused of violating the Fair Labor Standards Act (FLSA). The Commonwealth failed to pay at least the federal minimum wage to it’s employees whose pay date fell on July 24, 2009, due to the budget impasse. Additionally, unless the issue is resolved quickly, employees whose pay date falls on July 31, 2009 will receive no pay on that date, either.

A recording on the U.S. Department of Labor’s Wilkes Barre office phone line states that all affected Commonwealth employees who did not receive at least the federal minimum wage are covered by the investigation and do not need to file individually.

A call to Governor Rendell’s office was met with the response that, “He’s following the Commonwealth Court ruling from last summer, stating that he can’t pay the state employees until a budget is passed.”

One of the remedies available under the FLSA is to order the payment of all back wages plus an equal amount in liquid damages.
In other words, the Commonwealth could be ordered to double-pay every state employee who missed a paycheck.
Let’s do the math…

If there are roughly 38,500 employees in a bi-weekly pay cycle (There are 2 bi-weekly cycles that are opposite each other, so a group gets paid every week. Total number of state employess is about 77,000. We will assume for the illustration that the number of employees in each group is approximately equal.)

x $2000 average bi-weekly salary (actual average is probably greater)

= $77 million per week (or $308 million per month) in possible liquid damages, that the Commonwealth could be ordered to pay it’s employees by the U.S. Department of Labor!  That’s in addition to their regular pay!!!

There has been much speculation from the Rendell administration that the FLSA does not apply to them. Here’s an excerpt from the U.S. Department of Labor’s website:

“The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.”

Clearly the FLSA does apply the the Commonwealth of Pennsylvania… Governor Rendell and his allies need to put their egos and pet projects on the back burner and pay the state employees, before they destroy what’s left of Pennsylvania’s already-strained economy.

Check back for more updates…

Comments

  1. Robin says:

    Thanks for the coverage of this, 77,000 state employees DO appreciate it!!

    I would just caution you about your numbers. The damages would not be calculated using the employees normal paycheck rate I don’t think. Since the FLSA extends itself exclusively to the prevailing minimum wage of $7.25 per hour, they would multiply that by the number of hours worked in a week per employee x number of employees impacted weekly and sum it up from there. I know that remedy states “an equal amount”, however, elsewhere on the DOL site they state that the Secretary can seek injunctive relief to include double the amount in damages or triple the amount in damages if the violation is willful. Furthermore, there are fines for the perpetrator if they so wish to impose them…nominal for Ed given his annual income (just ask his wife…he doesn’t know) but could also include arrest….

  2. […] DOL Investigation of Commonwealth for FLSA Violations A reader (thank you!!) has sent me the following link  (click there to read the article) which has quantification of what the failure to pay employees […]

  3. admin says:

    Thanks Robin. On the surface, the FLSA does specifically address the prevailing minimum wage. If you dig a little deeper, you’ll see that it also addresses the employee’s “regular wage”, which is determined by the contracts with AFSCME and the other unions.

  4. […] suspect that the governor fears repercussions from the U.S. Department of Labor’s investigation of the Commonwealth for violating the Fair Labor Standards Act (FLSA), by not paying employees at least the minimum […]

  5. […] issue facing the Rendell administration is the ongoing investigation by the U.S. Department of Labor. Today, an additional 33,000 state employees received no paychecks, which could eventually cost […]