Wage and Hour Division (WHD)
U.S. Department of Labor
CUERO, Texas -- C and K Supply Inc., doing business as C and K Rentals in Cuero, has agreed to pay $433,426 in minimum wage and overtime back wages to 124 current and former gate guards and oil equipment cleaners following an investigation by the U.S. Department of Labor’s Wage and Hour Division that found violations of the minimum wage, overtime pay and record-keeping provisions of the federal Fair Labor Standards Act.
An investigation by the Wage and Hour Division’s McAllen District Office found that the company misclassified FLSA-covered employees as independent contractors, thereby denying them the minimum wage and overtime compensation guaranteed under federal law. Investigators traveled to rural areas to interview employees, discovering that gate guards received a daily wage rate that fell below the federal minimum wage of $7.25 an hour, and that oil equipment cleaners were not paid time and one-half their regular rates of pay for hours worked over 40 in a week . Additionally, the company failed to maintain accurate records of employees’ wages, work hours and employment conditions.
“Employers cannot evade their obligation under the FLSA to pay minimum wage and overtime compensation by misclassifying employees as independent contractors,” said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. “Employees are entitled to receive every penny of their hard-earned wages, and the resolution of this case demonstrates the Labor Department’s commitment to ensuring accountability and compliance under the law.”
C and K Rentals, which rents and leases equipment to oil companies at drilling and production sites in southern Texas, has agreed to pay all back wages due to the affected employees, and has committed to maintaining future compliance with the FLSA by properly classifying and compensating employees for all hours of their work.
The misclassification of employees as independent contractors is an alarming trend, particularly in industries such as construction that often employ low-wage, vulnerable workers and in which the Wage and Hour Division has historically found significant wage violations. The practice is a serious threat both to employees entitled to good and safe jobs, as well as to employers who obey the law. Too often employees are deprived of overtime and minimum wages, and forced to pay taxes that their employers are legally obligated to pay. Honest employers have a difficult time competing against scofflaws. The Labor Department is committed to ensuring that employees receive the pay and benefits to which they are legally entitled, and to level the playing field for employers that play by the rules.
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 of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records.
For more information about the FLSA and other federal wage laws, call the division’s toll-free helpline at 866-4US-WAGE (487-9243) or its McAllen office at 956-682-4631. Information is also available on the Internet at http://www.dol.gov/whd.
U.S. Department of Labor releases are accessible on the Internet at www.dol.gov. The information in this news release will be made available in alternate format (large print, Braille, audio tape or disc) from the COAST office upon request. Please specify which news release when placing your request at (202) 693-7828 or TTY (202) 693-7755. The Labor Department is committed to providing America’s employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit www.dol.gov/compliance.