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Temporary workers to receive $763K in back wages, damages from jewelry distributer, global mailing company after Labor Department investigations
PHILADELPHIA – The failure by two Philadelphia-area businesses – a custom jewelry distributer and an international shipping and direct mail company – to pay a combined 797 temporary workers minimum wage and overtime will cost the companies a total of $763,000 in back wages and damages.
U.S. Department of Labor's Wage and Hour Division investigators found Stanley Creations Inc. in Melrose Park and Asendia USA in Folcroft violated the Fair Labor Standards Act when they did not pay legally required minimum wages and overtime to the workers for more than two years. Investigators also cited both for failing to maintain records the law requires. In separate agreements with the division, the two employers will pay a total of $381,580 in back wages and an equal amount in liquidated damages.
"Our investigations found that Stanley Creations and Asendia were clearly taking advantage of these low-wage, temporary workers by denying them the wages they had rightfully earned," said Mark Watson, administrator of the Wage and Hour Division's Northeast Region. "Those who contract with outside companies for temporary help have an obligation to ensure these workers are paid in compliance with the law. In both of these cases, we found the host companies responsible for payment of the temporary workers as joint employers. This should send a strong message to other employers who use staffing services – when you're benefitting from their labor, you cannot ignore your obligations to these workers."
Investigators found that Stanley employed a core crew of temporary workers supplied by staffing company, International Labor Inc., and paid the workers each week in cash at a rate of $6 per hour. The company did not pay overtime when the workers' hours exceeded 40 in a workweek. The company distributes its custom jewelry to major retailers, including Macy's, Kohl's, JCPenney and Boscov's.
In the second investigation, the division found Asendia, a global provider of business-to-consumer shipping and mailing services, paid temporary workers supplied by Northeast Staffing LLC, an average of $6.69 per hour, in cash. Although the company paid workers overtime when they worked more than 40 hours in a workweek, the rates upon which they based their time-and-one-half calculation were below the legally-required federal minimum wage of $7.25 per hour.
In addition to paying back wages and damages, Asendia agreed to take the following steps to ensure future compliance with the law:
- Hire a human resources manager as a liaison between the staffing agency and company management.
- Interview staffing agencies and request references.
- Require the staffing agency have a supervisor on site and pay temporary workers electronically.
- Maintain records of all temporary workers at the site.
- Periodically check the staffing agency's payroll records.
Asendia USA is an international shipping and direct mail company, which operates as a subsidiary of parent companies, La Poste in France and Swiss Post in Switzerland.
The cases are the latest reported in the division's temporary help initiative. The division previously released findings of over $3.6 million in back wages and liquidated damages due to 843 employees.
The FLSA requires that covered, non-exempt 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.