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Business Owner Who Failed to Turn Over Pay Records Ordered to Prison

    Client Alerts
  • December 08, 2023

Last week, a federal judge in Michigan ordered the U.S. Marshals Service to arrest and imprison a home healthcare agency owner who repeatedly defied a U.S. Department of Labor demand that she provide pay records as part of a wage payment investigation. According to DOL, the owner refused to cooperate with a DOL administrative subpoena issued during an investigation of overtime and other pay practices.

Following this refusal, DOL filed a motion for contempt in federal district court seeking enforcement of the subpoena. That court directed imprisonment of the owner until she complies with the terms of the subpoena.

DOL has broad powers under the Fair Labor Standards Act to investigate employers’ pay practices. These powers include the right to obtain payroll and related records. While employers may legitimately object to the scope or specific items in such requests, outright defiance or ignorance of these requests can result in legal consequences that dwarf the potential exposure presented by the underlying wage investigation.

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