Wage and Hour Division (WHD)
U.S. Department of Labor
US Department of Labor files lawsuit against Houston-based emergency medical service companies to secure $142,000 in back wages for 76 employees
Investigation found employees misclassified as independent contractors
HOUSTON -- The U.S. Department of Labor has filed a lawsuit against three emergency medical service companies in Houston after an investigation by its Wage and Hour Division found that the companies violated the Fair Labor Standards Act by failing to pay 76 dispatchers, paramedics and administrative personnel $142,000 in minimum wage and overtime back wages.
"All workers who put in an honest day's work are entitled to receive an honest day's pay," said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. "This case underscores the Labor Department's commitment to hold employers accountable to federal labor regulations. Employers must not derive a competitive advantage over their competitors by circumventing the law."
The complaint was filed in the U.S. District Court for the Southern District of Texas, Houston Division, against Pride EMS LLC and Robert Sarlay and Paul Shaefer, owners; Whitten Enterprises Inc., doing business as Allyn Medical Services and Allyn Medical EMS, and Patrick Coveney, owner; Northwest EMS Consultants PA, doing business as North Cypress EMS, and owners Robert Sarlay Jr., Dr. Mounang Desai and Dr. Robert Sheppard, as well as Richard Beasley, Travis Kelton and Shawn Binkley, managers. Also named in the suit is Ambulance Management Group Inc., which performs administrative and managerial functions for the companies. The suit seeks an injunction for violations of the FLSA.
The investigation by the Wage and Hour Division's Houston District Office determined that some employees were misclassified as independent contractors, while others were paid "straight time" for all hours worked instead of receiving time and one-half their regular rates for hours worked over 40 in a week. Additionally, the company failed to maintain record keeping required by the FLSA.
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. The practice is a serious threat both to employees entitled to good and safe jobs, as well as to employers who obey the law. Misclassified employees often are deprived of overtime and minimum wages, and are forced to pay taxes that their employers are legally obligated to pay. Misclassification also creates a competitive disadvantage for employers who comply with the law.
Under the FLSA, employers must distinguish employees from bona fide independent contractors. 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 and other federal wage laws, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243) or the division's Houston office at 713-339-5500. Information is also available at http://www.dol.gov/whd.
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