Fueling Corporate Accountability

by Mary Beth Maxwell on March 29, 2013 · 2 comments

For the past few weeks, I’ve been traveling around the country listening to workers who are paid at or near the minimum wage. Their stories about trying to make ends meet − and having to make choices between  putting food on the table for their kids or filling up the gas tank so they can get to work − are truly moving. Many of them hold multiple jobs, take the third shift, or simply work as many hours as they possibly can just to earn a few more dollars.

Mary Beth Maxwell at round-table in Gary, Indiana

Mary Beth Maxwell speaks with low-wage workers at a round-table discussion in Gary, Ind., March 20.

The bottom line is that for minimum wage employees, every dollar counts. So, it’s especially important for employers of low-wage workers to take their legal obligations seriously. If they are operating outside the law, then they must be made accountable for paying all workers who were shorted and for ensuring that similar violations do not occur in the future.

This was our message to Daniyal Enterprises LLC, a Madison, N.J.-based gas station operator that failed to pay proper wages to more than 400 employees working at 70 of its gas stations. Many of the Daniyal-owned stations operate under well-known brands like Shell Oil and BP.

My agency, the department’s Wage and Hour Division, investigated this employer as part of an ongoing enforcement initiative to increase wage compliance in New Jersey gas stations. Investigators found employees working up to 84 hours a week who were not paid time-and-one-half for overtime hours (those beyond 40 in a week). The company was actually paying employees partly in cash “off the books,” so its payroll records did not accurately show the work times and pay information.

Investigators presented these findings to the company and explained to them how their employment and pay practices violated the Fair Labor Standards Act.  Presented with the evidence, the company agreed to pay the affected employees their back wages − a sum total of $3 million in back wages and liquidated damages that should have been in the workers’  pockets all along. Money that means they might not have to make hard choices, like whether to pay for utilities or buy new clothes for growing children. But, paying money that was due to workers all along does not help ensure that similar violations do not occur in the future, and it does not help level the playing field for competing businesses.

Daniyal had committed similar FLSA violations in the past, so it had to agree to additional accountability measures to ensure that, going forward, its employees will be paid at least the minimum wage and overtime for all hours of their hard work.

The company agreed to a three-year monitoring program overseen by an independent monitor who will report to the Labor Department. Daniyal also will install biometric time clocks at all locations, train employees on the FLSA’s provisions, and establish a toll-free number for workers to report violations to the monitor. I believe all of these actions will ultimately have a trickle-down effect.

The New Jersey Gasoline, C-Store, Automotive Association has already hosted wage and hour training for their members, and it now features a Wage and Hour Division article quarterly in its magazine. With a heightened level of compliance and awareness, gas station industry employers will follow suit, recognizing that compliance with the law is good for business. Compliance shines a favorable light on a business in the court of public opinion at a time when consumer awareness is at an all-time high. You only need to look as far as the nearest computer or smartphone to find praise or condemnation of corporations in real time via social media.

And informed employees are less likely to tolerate working under conditions that violate their rights. Daniyal employees now have a higher level of security that comes with an honest paycheck. Daniyal’s competitors do not have to race them to the bottom by undercutting their own wages, and Daniyal’s suppliers − Shell Oil and BP, among others − have some sense that the company flying their “corporate flag” has taken action to stay in compliance with the law.  All these activities advance compliance across New Jersey’s gas station industry.

I could go on and on about why compliance makes sense. It attracts and retains good employees. It prevents exposure to liability. The legal, ethical, moral and financial compasses all point in the same direction: there is tangible, real value in doing the right thing. The Wage and Hour Division is always willing to work with any employer that needs assistance in getting to compliance, but compliance with the law is ultimately the employer’s responsibility. Our job is to enforce the law, and we take that seriously.

I urge employers to learn from the experiences of Daniyal Enterprises and recognize that, in the end, being accountable to your workers and to your industry is good for business.

For information on the FLSA or any other laws enforced by the Wage and Hour Division, call our toll-free help line at 866-4US-WAGE (487-9243) or visit www.dol.gov/whd.

Mary Beth Maxwell is the acting deputy administrator of the department’s Wage and Hour Division.

{ 2 comments… read them below or add one }

1 Marjorie A. Skillman March 30, 2013 at 6:59 pm

Looking for work and forced to file for retirement just to have an income while I still search for employment is hard.

2 Web April 4, 2013 at 2:08 am

This would be good for everyone.

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