Understanding FLSA Violations: A 2026 Guide for Virginia Employers and Employees

The financial risk of non-compliance with the Fair Labor Standards Act (FLSA) is escalating for businesses across the country. This trend underscores a heightened focus on enforcement that directly impacts Virginia’s business landscape, making a thorough understanding of federal wage and hour laws more critical than ever.

The FLSA is the federal law that establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for employees in the private sector and in government. While some violations are willful, many stem from genuine misunderstandings of the law’s complex provisions. For employers, these unintentional errors can lead to costly investigations, litigation, and significant financial penalties, disrupting operations and damaging reputations.

Identifying Common FLSA Overtime and Minimum Wage Violations

The most frequent and costly mistakes employers make often fall into a few key categories. From misclassifying employees to improperly calculating overtime, these errors can accumulate into substantial liabilities over time. Federal agencies have become increasingly aggressive in investigating these common pitfalls, resulting in major financial consequences for non-compliant businesses.

Employee Misclassification: The Exempt vs. Non-Exempt Dilemma

One of the most significant areas of FLSA violations is the misclassification of employees as exempt from overtime. The law makes a critical distinction between non-exempt employees, who are typically paid hourly and are eligible for overtime, and exempt employees, who are salaried and not eligible. To qualify as exempt, an employee must meet both a salary basis test (being paid a fixed salary) and a duties test (performing specific executive, administrative, or professional duties). A new Department of Labor final rule significantly alters this landscape. According to the US Department of Labor, the standard salary level for exempt workers increases to the equivalent of $58,656 per year, effective January 1, 2025. This change is projected to make approximately four million more U.S. workers newly eligible for overtime pay.

Off-the-Clock Work and Unrecorded Hours

Off-the-clock work is defined as any compensable time an employee works that is not recorded or paid. This issue is a frequent target of federal enforcement actions. For example, a California contractor was recently required to pay over $320,000 in back wages and penalties for failing to pay employees for pre- and post-shift time spent picking up supplies, which investigators classified as required work. Similarly, another contractor was ordered to pay $770,000 in back wages and damages for minimum wage and overtime violations directly linked to inaccurately recorded work hours. These cases illustrate that employers are responsible for tracking and compensating for all time an employee is required to be on duty, even if it occurs before or after a scheduled shift.

Improper Calculation of the Regular Rate for Overtime

A common but costly mistake is calculating overtime based solely on an employee’s base hourly wage. The FLSA mandates that overtime must be paid at 1.5 times the employee’s regular rate of pay, which must include not only their base pay but also most other forms of compensation, such as commissions and non-discretionary bonuses. Recent Department of Labor opinion letters have reinforced this, clarifying that performance-based bonuses must be included when calculating overtime premiums. Failing to include this additional compensation in the regular rate calculation results in underpayment of overtime and can lead to significant back-wage liabilities.

The Escalating Cost of FLSA Non-Compliance

For businesses, the consequences of FLSA violations extend far beyond simple back pay. Federal enforcement actions, coupled with a rise in private litigation, have turned non-compliance into a significant financial liability that can jeopardize a company’s stability and growth.

Federal Enforcement and Back Wage Recovery

The U.S. Department of Labor’s Wage and Hour Division (WHD) has demonstrated a robust commitment to enforcement. In fiscal year 2023 alone, the WHD collected over $130 million in back wages for overtime violations. These enforcement actions can be financially devastating for individual businesses. For instance, a federal court ordered an Arizona roofing contractor to pay $147,708 in back wages and liquidated damages for overtime violations. The inclusion of liquidated damages, which effectively doubles the amount of back pay owed, is a common feature in such cases and serves as a powerful deterrent against non-compliance.

The Rise of Private Litigation and Collective Actions

Beyond government enforcement, employees have the right to file private lawsuits to recover unpaid wages. The financial stakes in these private actions are immense; in 2022, the ten largest wage and hour settlements totaled a staggering $574 million.

Navigating the complexities of the Fair Labor Standards Act (FLSA) requires specialized legal expertise, particularly when violations affect large groups of employees. Firms that focus on this area of law are essential for workers seeking to recover unpaid wages through collective or class actions. These legal actions allow multiple employees with similar claims to sue their employer as a single group, which can be a more effective way to address systemic pay issues.

The Lore Law Firm has established itself as a national leader in this field, with an extensive track record of advocating for workers whose FLSA rights have been violated. The firm’s attorneys specialize in handling complex class and collective action lawsuits, helping employees seek compensation for unpaid minimum wage or overtime claims. Their process, detailed on their site, is designed to guide workers through every step, from the initial case evaluation to the final resolution, allowing employees to pursue claims with limited upfront financial burden.

Proactive Strategies for Compliance and Recourse

For both employers and employees in Virginia, understanding the proper steps for ensuring compliance and seeking recourse is essential. Proactive measures can help businesses mitigate risk, while knowledge of their rights empowers workers to address potential violations effectively.

Best Practices for Virginia Employers

For Virginia’s business leaders, treating FLSA compliance as a core operational function can help reduce the risk of costly compliance issues. A proactive approach focused on regular review and clear policies can prevent liabilities before they arise. The following best practices can serve as a risk-mitigation guide:

Conduct Regular Audits

Proactively review pay practices, timekeeping records, and employee classifications at least annually to identify potential vulnerabilities. This internal check can uncover issues like improper regular rate calculations or misclassification before they become the subject of an external investigation.

Update Classifications

In light of the new 2025 salary thresholds, re-evaluate all salaried, exempt positions to ensure they still meet both the updated salary basis test and the stringent duties tests required by the FLSA.

Implement Accurate Timekeeping

Use a reliable system to record all hours worked, including pre-shift, post-shift, and meal break periods. A North Carolina hospital recently settled a lawsuit for automatically deducting meal breaks even when nurses were required to work, highlighting the importance of recording actual time worked.

Train Front-Line Managers

Supervisors are often the first point of contact for pay-related issues and can inadvertently cause violations by asking employees to work off the clock or mischaracterizing work hours. Ensure they understand FLSA basics to prevent these common mistakes.

Consult Legal Counsel

Engage with an experienced employment law attorney to review policies, audit classifications, and address complex questions before they become liabilities. Professional guidance is a critical investment in long-term compliance.

Steps for Employees Who Suspect a Violation

An employee who suspects their rights under the FLSA have been violated has several avenues for recourse. Taking a methodical, informed approach is crucial. The process an employee should consider involves several key steps to build a strong case and seek a resolution. These steps include:

• Document Everything: It is vital to keep personal, detailed records of all hours worked, pay stubs, and any written communication with management regarding pay, schedules, or job duties. This documentation can serve as critical evidence.
• Understand Company Policy: Employees should review their employee handbook or official company policies regarding timekeeping, overtime approval, and pay calculation procedures.
• Contact the DOL: The Department of Labor’s Wage and Hour Division allows workers to file a complaint confidentially. The agency can investigate the claim and, if a violation is found, can recover back wages on the employee’s behalf.
• Seek a Legal Consultation: An attorney specializing in wage and hour law can provide a confidential assessment of a potential claim, explain the legal options available, and represent the employee in a private lawsuit if necessary.

Navigating Virginia’s Evolving Wage and Hour Landscape

The key takeaway for Virginia’s business community is clear: the regulatory environment surrounding the FLSA is becoming more stringent. New rules are expanding overtime eligibility to millions more workers, and federal enforcement actions are resulting in record-breaking penalties for non-compliant employers. These developments signal a heightened level of scrutiny that businesses cannot afford to ignore.

For Virginia businesses, treating FLSA compliance as a core strategic priority is no longer optional. The financial and legal risks associated with misclassification, off-the-clock work, and improper pay calculations are too significant to overlook. Proactive management, regular internal audits, and a clear understanding of wage and hour laws are essential to mitigate these risks and maintain a fair and lawful workplace in 2026 and beyond.

This article is for general informational and educational purposes only and does not constitute legal, financial, or professional advice. Readers should seek guidance specific to their circumstances; no liability is assumed for any loss arising from reliance on this content.