Federal Investigators Find Childcare Workers Routinely Cheated Out Of Wages

Cheating daycare workers out of wages owed to them is so common, the U.S. Department of Labor’s Wage and Hour Division is conducting ongoing multistate investigations of wage law violations at childcare facilities.

Childcare providers aren’t what they used to be.

Childcare is a rapidly expanding industry that employs many low-wage, vulnerable workers. These workers who, due to a lack of knowledge of the law or unwillingness to exercise their rights, are vulnerable to poor treatment and labor law violations.

“Childcare employees work long hours looking after children’s safety, yet are often denied the wages and workplace protections guaranteed by law,” said Cynthia Watson, the Wage and Hour Division’s Southwest division regional administrator. “We are committed to strengthening compliance in this industry, which is important not just for the workers, but for all the families depending on them for quality child care services.”

The Fair Labor Standards Act (FSLA) requires that employees be paid at least the federal minimum wage of $7.25 for all hours worked. In addition, workers must also be paid plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers must also maintain accurate time and payroll records.

Ongoing FSLA enforcement initiatives are underway in Arkansas, Colorado, Louisiana, Montana, New Mexico, North Dakota, South Dakota and Texas.

Since 2009, the division’s Denver office has conducted more than 100 investigations of childcare providers in its jurisdiction.

Majority Of Childcare Providers Investigated Cheat Employees

Eighty-six percent of all investigated employers were violating the FLSA. The federal government has so far recovered about $195,000 in back wages owed to more than 800 workers.

The DOL’s Wage and Hour division division is says it “vigorously” pursuing violations — including demanding payment of back wages, civil money penalties and liquidated damages — to ensure accountability and deter future violations.

Due to the severity of violations found throughout this industry, the division is documenting its structure to better target enforcement efforts.

In one recent case, Crème de la Crème, a Denver-based childcare provider with locations throughout the country, paid $41,440 in back wages owed to 354 current and former childcare workers. The payments came following a DOL investigation found overtime and record-keeping FSLA violations

Investigations found violations at 21 Crème de la Crème day care centers in Colorado, Texas, Georgia, Kansas, New Jersey, Virginia, Ohio and Illinois.

Investigators found systemic FLSA violations due to the employer’s failure to properly pay overtime hours, those beyond 40 hours in a workweek.

The violations include failing to pay employees for time spent at mandatory training courses and for work performed before or beyond scheduled shifts.

In one instance, employees were hired by the company to teach soccer and tennis at the facility. Crème de la Crème misclassified them as independent contractors and consequently denied proper compensation.

Finally, Crème de la Crème failed to maintain proper records of employees’ work hours and wages. Crème de la Crème has agreed to comply with the FLSA in the future.

“We are pleased that these workers finally will be paid their rightful wages and, as demonstrated by our ongoing initiative, will continue to investigate Colorado child care providers to remedy violations and ensure sustained compliance with the law,” Watson said.

The investigations were conducted under a multiyear enforcement initiative focused on the childcare industry in Colorado, in which widespread noncompliance with the FLSA has been found.

Due to the severity of violations found throughout this industry, the division is documenting its structure to better target enforcement efforts.

As part of the initiatives, the division continues to provide compliance assistance and education to employers and industry associations regarding FLSA requirements and the consequences of violating the law.

Wage and Hour Division is also reaching out to workers, employee associations, community organizations, state licensing agencies and others to inform them of the ongoing initiative and encourage participation in promoting compliance.

For more information about federal wage laws call the DOL’s Wage and Hour Division toll-free helpline at 866-4US-WAGE (487-9243) or its Denver office at 720-264-3250. Information also is available at http://www.dol.gov/whd/.