Missed payroll resulted in minimum wage, overtime violations of federal law

MOBILE, Ala. -- Cogburn Health Services Inc. has paid $202,634 in back wages to 312 employees after a U.S. Department of Labor investigation found that the company had violated the minimum wage and overtime provisions of the Fair Labor Standards Act at two rehabilitation and long-term care facilities in Mobile.

The department’s Wage and Hour Division found that employees at the company’s facilities on Tuscaloosa Street and Grelot Road were not paid on their scheduled payday. The company agreed to pay the employees after the division explained that the missing payrolls resulted in a failure to pay required minimum and overtime wages. As part of a settlement, the company also agreed to establish a payroll reserve to ensure that future payrolls are made in a timely manner.

“Low-wage, vulnerable workers depend on regular paychecks, and employers cannot take advantage of employees by missing payrolls and essentially forcing them to involuntarily loan their wages,” said Kenneth Stripling, director of the Wage and Hour Division’s Gulf Coast District Office in Birmingham. “The Wage and Hour Division is committed to ensuring workplace protections for all employees and preventing employers who fail to comply with the law from gaining an unfair competitive advantage over those who do.”

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers must also maintain accurate time and payroll records, and wages required by the FLSA are due on the regular payday for the period covered.

Accessible and searchable information on enforcement activities by the Department of Labor is available at http://ogesdw.dol.gov/search. For more information about the FLSA, call the Wage and Hour Division’s Gulf Coast office at 205-397-7100 or the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available on the Internet at http://www.dol.gov/whd.