One Orlando-based company figured out the perfect way to cut its employees’ overtime costs:

It opened a second set of books, lost all its old records and insisted it only pay straight-time compensation.

Let’s back up a little. Three employees worked for Alie Brothers, Inc., a commercial laundry business serving hotels, theme parks, airlines, etc. in the Orlando region. No matter how much overtime these employees logged in a single workweek, they received straight-time compensation.

Alie had a practice of paying employees with two checks - one for the first 40 hours of work, and the second for hours worked over the first 40.

The first set of checks was handled by the company’s controller who also handled payroll, and since nothing seemed wrong with the practice, he never caught on. But the second set was issued separately and signed by the company’s president and sole shareholder, Rayman Alie, and his sister.

After the company had given numerous threats of not providing the three employees with their paychecks, they sued their employer for violations of the Fair Labor Standards Act (FLSA).

That’s where things get … interesting. A court had difficulty determining how much overtime the employees were due because Alie produced spotty and inconsistent financial records. (Apparently, when a company runs two sets of books, keeping things straight becomes twice as difficult.)

As if that weren’t condemning enough, Alie also claimed that when the company’s main office relocated from Orlando to Daytona Beach, all of its payroll records were destroyed. How convenient.

But a lack of records wasn’t enough to keep the company from paying - a court awarded $78,472 to the three employees by using “reasonable inference” from their paychecks and a few random payroll records that Alie somehow managed not to lose.

Tags: Compensation, FLSA, Overtime, Paychecks, Records-retention