There are many industries where the agreement between the worker(s) and the employer is that the worker will receive a certain fixed lump sum of money, sometimes wholly or partly in cash, for an agreed-upon number of hours. This situation is rife in the gasoline station industry, as evidenced by the fact that a New Jersey gas station operator has recently settled a case, agreeing to pay $3,000,000 in unpaid wages/overtime and penalties to more than four-hundred employees at more than seventy gas stations in New Jersey for violations of the Fair Labor Standards Act . The case is entitled Harris v. Daniyal Enterprises LLC et al and was filed in federal court in New Jersey.

The employer also had to pay $91,000 in Civil Money Penalties. These are assessed for willful conduct or for repetitions of the same type of offending conduct, which occurred in this instance. The owner was also held personally liable.

The Acting Secretary of Labor noted that “this agreement returns hard-earned wages to workers in one of only two states that still mandates full-service gas pumps. All gas station owners and operators in New Jersey should take note of this precedent by reviewing their payroll practices and legal obligations. Gas station attendants are few in number, earn low wages, work long hours and often lack English proficiency — factors that contribute to their vulnerability as well as the importance of protecting their right to be paid properly."

There were fourteen companies named as defendants, all owned by Mr.Chaudhary; these companies operated BP and Shell gas stations in New Jersey. The Complaint alleged that the employees often worked more than eighty hours per week, with no overtime, with payment off the books to disguise the fact that the employees were working in excess of forty hours per week..

There had been two prior investigations by the DOL, both finding that monies were owed. In both instances, DOL officials met with Mr. Chaudhary and explained his obligations for recordkeeping and proper payment of wages, which he evidently did not heed. Under the terms of the agreement, the employer must implement a monitoring program at each station to ensure FLSA compliance, as well as establishing a confidential hotline for employees to report alleged violations.

First lesson—it only takes a single employee to complain to a DOL (or an attorney). Then, anyone in the same boat, i.e. similarly situated, will be included in the action. Second lesson—informal deals or arrangements, i.e. a salary for a set number of hours (often over forty) is a dangerous idea because overtime must still (and always) be paid, regardless of the “agreed-upon” arrangement.