Dive Brief:
- For the second time in four years, a California company that outsources HR services has been hit with a major fine for the way it manages compensation for its employees, according to several media reports.
- TriNet Human Resources Corp., a publicly-traded company that had $2.7 billion in revenue based in San Leandro, Calif., has been ordered to pay $1 million in back overtime wages and damages to hundreds of employees for violations of the federal Fair Labor Standards Act, the U.S. Department of Labor said earlier this week.
- The federal agency said its Wage and Hour division cited TriNet for failing to pay time-and-a-half to 267 employees who worked more than 40 hours per week. In 2012, TriNet paid $326,000 in back wages and damages after the division found similar violations, according to the Labor Dept.
Dive Insight:
According to the Labor Dept., TriNet provides HR outsource solutions to small and midsize businesses. It offers payroll processing, human capital consulting, employment law compliance and employee benefits, including health insurance, retirement plans and workers compensation insurance.
FLSA requires that covered, nonexempt workers be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus one and one-half times their regular wages for hours worked beyond 40 per week, according to the DOL.
“TriNet is fully committed to compliance with all of its obligations as an employer,” TriNet said in a statement, according to Staffing Industry Analysts, a trade website. It also told the site that "it voluntarily cooperated with the Department of Labor in a review of the overtime exempt classification of a job position at TriNet" and that the Labor Dept. "ultimately disagreed" with the firm's assessment of the situation in question.
“TriNet falsely believed that raising an employee’s salary exempted them from receiving overtime pay,” said Susana Blanco, the division’s Wage and Hour director in San Francisco, in a statement. “Hopefully, the company will now pay better attention to the rules going forward and pay its employees the wages they earned.”