As all employers should know, the Fair Labor Standards Act (FLSA) requires that non-exempt employees be paid an overtime rate in the amount of one and one-half times their regular rate for all hours worked over 40 hours in a work week. Failure to comply with the FLSA overtime pay requirements subjects the employer to back pay in the amount of the unpaid overtime, liquidated damages equal to the amount of the unpaid overtime and reimbursement of attorney’s fees incurred by the aggrieved employee. The employer is liable for the unpaid overtime for a period of two years from when a complaint is filed, or three years if the violation was intentional. Recently, in the case of Souryavong v. Lackawanna County, the United States Court of Appeals for the Third Circuit provided guidance as to what will be considered an intentional FLSA violation.

In the Souryavong case, a group of county employees worked in dual part-time capacities for the county, and the county tracked and paid the employees separately for each of their individual jobs. The employees did not work more than 40 hours a week in either of their separate jobs, but in the aggregate, the employees regularly worked more than 40 hours per week. The county was unaware that under this two-job scenario it was required to pay its employees overtime pay for hours worked more than 40 in the aggregate in a given work week. The sole issue at trial was whether the county’s violation of this FLSA requirement was a willful violation which would render them liable for three years’ worth of back overtime payments rather than two years.

The employees presented evidence that county officials were aware of FLSA overtime requirements generally, but did not provide any evidence that the county was specifically aware that the FLSA required it to pay their employees overtime if their separate jobs in the aggregate totaled over 40 hours. The Third Circuit Court ruled in favor of the county and found that the FLSA violation was not willful. The Third Circuit noted that willfulness denotes situations in which the employer knew that its conduct was prohibited by the FLSA or showed reckless disregard for the matter. In this case the county was not aware of the specific legal requirement pertaining to the two-job scenario, nor did the county act in an egregious manner which many courts suggest must be present in order to find a willful violation of the law. An employer’s simple negligence in failing to be aware of the FLSA violation is not enough.

While employers can take some solace in the fact that the Souryavong decision provides some forgiveness for an innocent mistake of law, it must be noted that the county was nonetheless liable for significant penalties due to the FLSA violation including two years of back overtime payments, liquidated damages and attorney’s fees. Employers must be very mindful of wage and hour laws lest they find themselves subjected to very costly litigation.