Department of Labor Settles $7 Million Wage and Hour Grievance

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Department of Labor Settles $7 Million Wage and Hour Grievance

By: Anthony Oceguera

The Department of Labor (“DOL”) just agreed to pay $7 million to settle a longstanding arbitration with its own employees, according to a press release issued by the American Federation of Government Employees Local 12 (“AFGE”).  The settlement concerns allegations reportedly dating back to 2006, when the AFGE first filed a grievance against the DOL on behalf of its members.  Yes, the DOL, the agency that doggedly pursues employers for failing to abide by federal wage laws, has itself been embroiled in a 10 year battle with the AFGE over allegedly not paying its own employees overtime pay.  According to Law360, who first reported the settlement, the basis for the alleged non-payment of overtime stemmed from the DOL misclassifying an undisclosed number of its employees as exempt from overtime under the Fair Labor Standards Act (“FLSA”).  Further details regarding this settlement are sure to emerge.

What is truly significant about the DOL’s settlement is that it highlights the difficulties facing all employers when navigating federal (and state) wage laws.  If the government agency responsible for writing FLSA regulations cannot get it right, how can private employers be expected not to get tripped up when deciding if and when to classify an employee as exempt or non-exempt? 


The DOL’s new Rule for Overtime for White Collar Workers, which goes into effect on December 1, 2016, raises the salary threshold for non-exempt employees.  Employers are encouraged to read our previous article Closing Time: New Federal Overtime Law Forces Employers to Make Tough Decisions, which provides additional information about this Rule.  When this Rule goes into effect, you can expect a significant increase in litigation alleging overtime claims based on misclassification.  Employers should evaluate non-exempt positions to make sure they comply with salary requirements set forth in the new Rule.  Employers should also evaluate whether or not these positions meet the requirements of administrative, professional or other available exemptions.  As the DOL’s own settlement shows, all employers are targets for overtime litigation.  

If you find yourself facing allegations of misclassification, please contact The Saqui Law Group for expert legal advice. 


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