US Department of Labor recovers $151K in back wages, damages for 64 guards at Northville, Michigan, security company
Employer: Koda Group Inc.
200 North Center St.
Actions: Fair Labor Standards Act consent judgment
Court: U.S. District Court for the Eastern District of Michigan
Investigation findings: On Feb. 8, 2024, U.S. District Judge Matthew Leitman of the Eastern District of Michigan entered a consent judgment and order requiring Koda Group Inc. and owner and president Timothy Gilbert to pay a total of $151,208 – $75,604 in back wages and an equal amount in liquidated damages – to 64 security guards. Filed in conjunction with a complaint, the consent judgment follows an investigation by the U.S. Department of Labor’s Wage and Hour Division alleging FLSA violations.
Specifically, division investigators found the employer did the following:
- Misclassified security guards as independent contractors when they were actually employees.
- Paid the guards a flat-rate for all hours worked and failed to pay time and one-half their hourly rate for hours over 40 in a workweek.
- Failed to post a notice explaining the FLSA in a conspicuous location.
In addition to agreeing to pay back wages in monthly installments through Nov. 1, 2024, the company agreed to provide all employees with federal wage protections and to maintain accurate payroll records.
Quote: “Koda Group created schedules for its security guards who performed work necessary for their employer’s business; assigned them work tasks and required them to followed detailed policies and procedures. These factors are among those that define them as employees and not independent contractors in control of their own work schedules and jobs,” explained Wage and Hour District Director Timolin Mitchell in Detroit.” “Workers misclassified as independent contractors are denied their protections under the Fair Labor Standards Act and employers do not pay applicable employment taxes or workers’ compensation on their behalf.”
Background: Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division and how to file an online complaint. For confidential compliance assistance, employees and employers can call the agency’s toll-free helpline at 866-4US-WAGE (487-9243), regardless of where they are from.
Download the agency’s new Timesheet App for iOS and Android devices – also available in Spanish –to ensure hours and pay are accurate.