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Secretary of Labor Thomas E. Perez
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News Release

WHD News Release: [04/26/2012]
Contact Name: Scott Allen or Rhonda Burke
Phone Number: (312) 353-6976 or x6976
Release Number: 12-0777-CHI

Hawkins Tree and Landscaping in Shakopee, Minn., to pay $478,000 in back wages and damages to 57 workers, additional $22,000 in civil money penalties

Company misclassified workers as independent contractors, failed to pay overtime

SHAKOPEE, Minn. — Judge Susan Richard Nelson of the U.S. District Court for the District of Minnesota has entered a consent judgment against Hawkins Tree and Landscaping Inc., a Shakopee company, and its owners, Michael Hawkins and Dawn Hawkins, individually. The judgment orders payment of back wages and liquidated damages in the amount of $478,000 to 57 current and former laborers, drivers, crew leaders and foremen of the company for violations of the Fair Labor Standards Act. Hawkins Tree and Landscaping and its owners also have agreed to pay $22,000 in civil money penalties.

"The misclassification of employees as independent contractors is a serious threat to both workers, who are entitled to good and safe jobs, and to employers who obey the law and are undercut when others use illegal practices," said Nancy J. Leppink, deputy administrator for the Wage and Hour Division. "The Department of Labor is committed to remedying employee misclassification and ensuring compliance to protect and enhance the welfare of the nation's workforce."

The consent judgment resolves a lawsuit that was filed by the Labor Department in 2010 after an investigation revealed that the company had failed to pay workers time and one-half their regular rates of pay for hours worked over 40 hours in a week. The company also failed to provide adequate records of hours worked and misclassified workers as independent contractors. The company and its owners have conceded all of the violations. Under the consent judgment, the court has entered a finding that the workers were employees of Hawkins and not independent contractors. The judgment also enjoins the company and its owners from any future FLSA violations.

As terms of the consent agreement, Hawkins Tree and Landscaping must retain a certified public accounting firm to conduct bi-annual audits of its pay practices to determine compliance with the FLSA, as well as provide all employees information on the FLSA in English or Spanish.

The misclassification of employees as independent contractors is an alarming trend, particularly in industries that often employ low-wage, vulnerable workers and in which the Wage and Hour Division historically has found significant wage violations. Too often, misclassified employees are deprived of overtime and minimum wages, and are forced to pay taxes that their employers are legally obligated to pay. The Labor Department is committed to ensuring that employees receive the pay and benefits to which they are legally entitled and to leveling the playing field for employers that play by the rules.

Under the FLSA, an employment relationship must be distinguished from a strictly contractual one. An employee — as distinguished from a person who is engaged in a business of his or her own — is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business that he or she serves. For more information, visit http://www.dol.gov/whd/regs/compliance/whdfs13.htm.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Additionally, employers must maintain accurate time and payroll records.

For more information about the FLSA, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd/.

Solis v. Hawkins Tree and Landscaping Inc., Michael Hawkins, Dawn Hawkins

Civil Action Number: 0:10-cv-03848