Wage and Hour Division (WHD)
U.S. Department of Labor
BOSTON -- The U.S. Department of Labor has obtained a consent judgment in the U.S. District Court for the District of Massachusetts that orders Ward’s Cleaning Service Inc. and David Ward, owner/president, to pay $1,033,877 in unpaid wages and liquidated damages to 149 low-wage employees of the Peabody contract labor provider. The defendants, who provide night cleaning crews, housekeepers and dishwashers to about 85 hotels and restaurants in the Boston area, will also pay $163,900 in civil money penalties and make changes to their payroll system.
“Employers who willfully underpay their employees and falsify records harm not only the employees and their families, but the business community as well. The Wage and Hour Division is working to level the playing field for all law-abiding employers and will ferret out those employers who not only cheat their employees, but harm legitimate competitors by their illegal employment practices,” said Carlos Matos, director of the division’s Boston District Office.
Investigators from the department’s Wage and Hour Division Boston District Office found that, from July 2009 through December 2012, the defendants violated the overtime and record-keeping requirements of the Fair Labor Standards Act. Specifically, they failed to pay overtime to the employees who worked more than 40 hours in a workweek, and they concealed nonpayment of overtime through practices, such as directing employees to use multiple timecards with different names, altering timecards, paying employees with checks made out to false names and paying employees in cash.
“These vulnerable employees were denied their rightfully earned wages through the use of sophisticated schemes to reduce or eliminate the company’s overtime obligations. This was not the first time; a 1993 Wage and Hour Division investigation of this company found similar violations, which led to workers receiving $172,000 in back wages then,” said Michael Felsen, the department’s Regional Solicitor of Labor for New England. “To prevent this from happening again, the judgment calls for payment to employees of back wages and an equal amount in liquidated damages, as well as significant penalties. It also requires Ward’s to develop and use a payroll system that complies with federal wage law, and that will be closely scrutinized.”
Under the terms of the judgment, the defendants will hire a qualified independent consultant with specific knowledge of the FLSA to create a payroll system that will ensure that their payroll and record-keeping practices comply with the law. They will submit quarterly reports to the Wage and Hour Division addressing all pay and record-keeping problems found and the actions taken to correct those problems. In addition, the judgment prohibits the defendants from committing future FLSA violations and forbids them from soliciting repayment of the wages and damages from any of the affected employees.
Legal support, including the filing of the complaint and consent judgment, was provided by attorney Susan Salzberg of the department’s New England Regional Office of the Solicitor.
For more information about the FLSA and other federal wage laws, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243) or its Boston office at 617-624-6700. Additional information can be found at the Wage and Hour Division’s website at http://go.usa.gov/KYBz.
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