Willful VS. Non-willful DOL Violations: Penalties & Differences

What’s the difference between a willful and non-willful violation of DOL protocols? What are the penalties like for each? 

In simple terms, willfulness is a legal concept used to determine whether the defending party knowingly broke the law. Regardless of whether the law was violated intentionally, there are punitive consequences. However, when willfulness is proven, the offending party often faces more severe penalties.  

The Fair Labor Standards Act (FLSA) establishes a standard for determining willfulness that was further articulated in McLaughlin v. Richland Shoe Co. According to this standard, an employer's actions are considered "willful" if they are aware of or demonstrate reckless disregard for whether they have violated the FLSA. "Reckless disregard" is shown when an employer should have investigated further to ensure compliance with the FLSA but chooses not to do so. It should be noted that merely having a general knowledge of the FLSA is not enough to establish willful behavior. This same standard of willfulness applies to most violations under the Department of Labor (DOL). 

Now, let's discuss penalties. If a company is found guilty of violating workplace standards, they are required to pay various categories of compensation. These include unpaid wages owed to affected employees, liquidated damages for those employees, the company's attorney fees, penalties, and sometimes attorney fees for the plaintiff. Under the FLSA, willful violations of Section 206 (minimum wage) and Section 207 (maximum working hours) can result in penalties of up to $2,374 per affected employee. For Section 203(m)(2)(B) (regarding tip retention by employers), the maximum penalty is $1,330 per affected employee. 

In the case of violations under the Service Contract Act (SCA), consequences may include withholding contract payments to cover underpaid wages and fringe benefits, termination of the contract with liability for associated costs to the government, legal action to recover underpayments, and potential debarment from future contracts for up to three years. Determining violations under the Davis-Bacon Act (DBA) depends on whether the contractor has neglected their obligations to employees and subcontractors. 

As an employer, one of your primary responsibilities to your employees is to familiarize yourself with the laws that govern their workplace to ensure safety and compliance. By working with Onsi, the leading compliance experts, you can have peace of mind, knowing that your company is adhering to the law and avoiding penalties like the ones mentioned above.

- Hailey Soupiset, Intern & Joshua Hinckley, VP Business Development