It’s Their Mistake, But You Still Have To Pay Them
Question: Just wondering, I have a crew that is, I guess average. Normally they do okay. Recently for some reason, they installed a multi-poise furnace on its back. I’m sure the transition was easier, but they know better. Of course, I am going to do the right thing for the customer and reinstall it at no charge. My question is, do I have to pay our guys to re-do their work, or can I withhold the hours it takes from their pay? The change-out they’re doing today is being babysat by a service tech, and I believe we shouldn’t have to justify that kind of labor on something that should be second nature to these guys.
Answer: Good help is indeed hard to find! Other contractors no doubt sympathize with the extraordinary frustrations of added labor job costs and damage to customer good will of having to re-do a job for such a seemingly basic error. But not paying the employees for doing the job over does have risks. Our friends at the U.S. Department of Labor would have no problem with suspending, demoting, or firing employees for an inexcusable error but they might frown on making them work without pay as violating the right to receive minimum wage. As this suggests, however, an employer could reduce their pay to minimum wage for the re-do. Also, an employer might conclude that the risk of enforcement action would be acceptable under these circumstances since the exposure would probably be limited to the hours worked at the rate of minimum wage (calculating the hourly rate in your state, and assuming the employees did not work over 40 hours in the week in question and thus incur overtime).
This response is intended for general informational purposes only and should not be construed as legal advice or a legal opinion, nor is this column a substitute for formal legal assistance. For help with particular legal needs, members are invited to consult with Brooke Duncan III of Adams and Reese LLP. Mr. Duncan can be reached at 504-585-0220 or by email at firstname.lastname@example.org.
MORE ON THIS FROM HILARY ATKINS, ACCA GENERAL COUNSEL:
I think that the overall take-away here is how you treat your employees as a whole. A first time error, well, okay. But if it continues to happen then you have to face some hard choices: you must pay your employees for time worked, but you don’t have to continue to put up with call-back and re-install costs that are hurting your bottom line. You have the option of the legal exposure from the DOL as stated above, or you can terminate the employee and move on (be sure to document everything in writing, of course.) However, there is no legally defensible position you can take as cover for failing to compensate. You will have to weigh the business risks of so doing and then face the consequences.
Posted In: Legal
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