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It’s an extreme case, but it has lessons for every company: Not meeting your employer obligations can cost you big time. A New York couple, Varsha and Mahender Sabhnani, were ordered to pay more than $936k to two women “employed” as domestic workers. The Sabhnanis were also sentenced to 132 months and 40 months in jail respectively.
Their crimes, according to a U.S. District Court include forced labor, harboring aliens and peonage. But the bulk of the fine comes from their failure to pay the appropriate minimum wages, overtime pay and other violations of the FLSA.
Domestic employees are treated somewhat differently than others when it comes to overtime rules, but these rules didn’t apply in the Sabhnanis’ case. The court ruled the two women “workers” didn’t qualify for the exemptions because of their treatment in the house: They were beaten, had no private quarters and generally slept on the floor.
Granted, no one would defend that kind of treatment of workers. But it’s worth pointing out that as bad as the treatment the Sabhnanis dished out to their workers was — what really cost them was the lack of attention to basic employment law.