Employer Headed to Jail After Falsifying Workers’ Time Cards
Company owner refused to pay employees time and a half for overtime
How serious are the consequences to violating wage and hour laws?
One business owner just found out the hard way. He’s headed to jail after using some creative bookkeeping methods to avoid paying his employees overtime. He and his company are also on the hook for over half a million dollars in restitution and penalties.
Abdul Jamil Khokhar, along with BMY Foods, Inc., owns nine Papa John’s franchises in New York.
Last year, Khokhar found his operation under investigation by the New York Attorney General. Reason: That office had received a tip that Khokhar wasn’t paying his non-exempt employees overtime.
According to the investigation, the computerized bookkeeping program for BMY Foods automatically calculated employees’ compensation at 1.5 times their regular pay rate for any hours worked over 40 in a given week.
That meant Khokhar had to employ a certain amount of accounting trickery to stiff workers out of their overtime compensation.
The state investigation revealed that once an employee had worked 40 hours in a week, any additional hours would be entered into the payroll system under a fictitious name. The payroll program would then be deceived into paying those hours at the regular rate of pay instead of the overtime rate. Often, these phony entries were paid out in cash.
Khokhar and BMY kept two separate sets of records to track the payouts to both the fictitious employees and the actual employees.
The New York Attorney General criminally prosecuted Khokhar and BMY for failure to pay wages and for falsifying business records. Both pled guilty. Khokhar was sentenced to 60 days in jail and he and BMY were ordered to pay $230,000 in restitution to the employees they had stolen wages from.
But that wasn’t all.
The U.S. Department of Labor also got involved. It secured a civil settlement that required Khokhar to pay an additional $280,000 in damages and penalties.
(For more about this case, see here.)
What Workers Need to Know
If you suspect that your paycheck is short, keep in mind that employers who are trying to steal wages from you may offer intentionally confusing explanations for how they have calculated your pay.
A good rule of thumb is that if you’re a non-exempt employee, you are generally entitled to overtime compensation for any time worked over 40 hours in a given week. Overtime must be paid at 1.5 times your regular rate of pay, according to federal law.
It’s important to remember that wage calculations may also be subject to state or municipal laws.
Because issues surrounding pay can be complicated, it’s wise to speak to an attorney if you believe that you haven’t been compensated in accordance with the law.
Call or email us today to discuss your unique situation.