PHILADELPHIA — More than 160 workers at a Philadelphia direct mail and printing company will receive $1.45 million in back wages and damages after a federal investigation found their employer and a staffing agency failed to pay overtime wages.
The U.S. Department of Labor's Wage and Hour Division conducted an investigation that resulted in a consent judgment, filed in U.S. District Court for the Eastern District of Pennsylvania, in which ICS Corp., New Century Integrity Corp. and its owner Hokkito Teddy agreed to pay 166 workers $725,583 in overtime wages, and an equal amount in liquidated damages. The investigation found ICS, New Century and Teddy employed the workers jointly.
"Temporary staffing agencies are valuable contributors to our economy," said Wage and Hour Division Administrator Dr. David Weil. "These agencies should not be used by employers to attempt to avoid their obligations under the law. Those who do will be held accountable, as today's action shows."
An investigation of direct mail processor ICS and two staffing companies it retained, found significant violations of the Fair Labor Standards Act. Violations included paying some workers in cash at straight time rates for all hours instead of paying overtime when employees worked beyond 40 hours in a workweek. Other employees, provided by New Century received checks for their first 40 hours from ICS. New Century then paid these employees in cash for their overtime hours at rates less than their regular pay. For example, a worker who received $13 per hour for his first 40 hours received $11 per hour in cash for overtime hours.
Investigators also found that Richy Services Inc., a second staffing agency used by ICS, failed to produce time and payroll records.
In addition to back wages and damages, the consent judgment requires ICS to appoint a compliance officer to ensure that the company maintains proper records, and pays temporary workers in compliance with the FLSA.
"Companies that use temporary agencies have a responsibility and duty to pay legally required wages," said Oscar Hampton, the department's Regional Solicitor in Philadelphia. "ICS violated the law when it failed to pay its workers the wages they earned. The company cheated its employees and sought an unfair business advantage over competitors that abide by the law."
The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 per hour 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. Employers also must maintain accurate time and payroll records. The FLSA provides that employers who violate the law are liable to employees for their back wages and an equal amount in liquidated damages. Affected employees receive liquidated damages, as well.
The case was investigated by the Wage and Hour Division's Philadelphia District Office and litigated by attorneys in the Philadelphia Regional Solicitors Office.