Maryland’s Workplace Fraud Act of 2009 will go into effect on October 1, 2009.   Under the new law, employers in the landscaping and construction industries that knowingly misclassify employees may be subject to a civil penalty of up to $5,000 per misclassified employee.  An employer that misclassifies an employee three or more times can be assessed an administrative penalty of up to $20,000 for each misclassified employee.  Additionally, employers who fail to produce requested records may be subject to a fine of up to $500 per day for each day the records are not produced.  Although the Act is limited to the landscaping and construction industries, employees in other industries can still seek damages for improper classification under the Fair Labor Standards Act.

A recent study reveals that low-wage employees are routinely denied overtime pay, paid less than the minimum wage, forced to work-off-the clock without pay, and have their meal breaks denied, interrupted or shortened.  The study, which was based on a survey of employees in Chicago, Los Angeles, and New York City, demonstrates that employers continue to ignore and violate the current framework of employee protections under the Fair Labor Standards Act (FLSA).  According to the study, more than two-thirds of the employees interviewed have experienced at least one wage and hour violation in the previous work week.  The study also found that among employees who worked more than 40 hours in their previous work week, more than 75 percent were not paid the mandated overtime rate by their employers.  Other findings include:

1. FLSA violations are more prevalent in certain industries such as apparel and textile manufacturing, personal and repair services, and in private households;
2. African-Americans are three times more likely to experience an FLSA violation than white employees; and
3. Employees employed by companies with less than 100 employees are more likely to experience FLSA violations than those employed by larger companies.

In sum, the FLSA is routinely violated by employers in the low-wage labor market.  For more information on the FLSA and The Employment Law Group® law firm’s Wage and Hour Practice, click here.