Children as young as 13 were staffing phone banks for an Orem-based company that does market research and political surveys from call centers in seven states, federal investigators said Tuesday.

Children that young can't legally be employed, except on farms.

The U.S. Department of Labor fined Western Wats for hiring three 13-year-olds, and for working an additional 1,479 children -- all 14 or 15 years old --more than three hours on a school day or more than eight hours on a weekend day, among other violations.

The $550,000 penalty was among the highest of its kind ever assessed against a U.S. company, officials said.

Western Wats disputed the fine and the scope of the violations, and said it would fight the child-labor allegations in Utah, Arizona, Idaho, Kansas, Nebraska, South Dakota and Wyoming.

"We are appealing on several grounds," corporate counsel Stacey Jenkins said Tuesday evening, adding that "once we did learn of the investigation [in January], we actually ended up terminating the employment of anyone under [age] 16." He estimated that number at a "couple of hundred" and said that moving forward, Western Wats is not employing anyone under 17.

Jenkins said an internal review showed that three 13-year-olds were employed by Western Wats, which operates a dozen call centers in six states, many in college towns. Each center employs about 100 people, but he estimated that Western employed 20,000 workers on and off during the three years covered by the government investigation.

He said one of the 13-year-olds was a company executive's daughter "who was stuffing envelopes," and that the other two "slipped through the cracks" of the hiring process.

According the Labor Department, a surprising aspect of the case was the sheer volume of children the company was hiring. Lee Ann Dunbar, the agency's district director for Utah, Montana and Wyoming, said she found it unusual that a company would employ children that young to make cold calls to adults.

Responded Jenkins: "When you go to McDonald's or Burger King, you have kids making your food. I'm less concerned with kids making phone calls than making my food."

Investigators found that Western Wats sometimes paid children less than the $7.25-an-hour federal minimum wage, although those violations appeared to be an oversight, and the company agreed to pay about $5,000 in back wages, Dunbar said.

No child was employed against his or her will. Western Wats' need for workers fluctuates wildly, and the hiring of children may have been necessary for the company to meet its obligations. During the school year, children under 16 can't work more than three hours on a school day or more than 18 hours a week. When school is not in session, they are limited to 40 hours a week.

Dunbar wouldn't say what led investigators to Western Wats.

For employers, the Fair Labor Standards Act is extremely complex and "the devil is in the details," said Monica Whalen, CEO of the The Employers Council, a Utah-based private, nonprofit human resources consulting organization.

"The majority of employers are likely to be in violation of some technical aspect of this law -- even if they are trying to do the right thing," said Whalen, an employment-law attorney. But "Ignorance of the law is no defense. There is a responsibility of employers to know what they need to do to run their business." Also, there is a lot of information available on the Web sites of government agencies.

She's not surprised at the $500,000 penalty.

Ultimately, "If you're hiring anyone under 18 years of age, you better make sure you understand the restrictions and limitations of their employment," she said. "The Department of Labor takes child labor violations very seriously."