Court orders Yauco coffee grower to pay $101k in back wages to more than 170 underpaid employees after US Labor Department investigation, litigation

GUAYNABO, Puerto Rico – A consent judgment has been filed in federal district court ordering a Yauco coffee grower to pay $101,484 in back wages to more than 170 year-round farm workers and seasonal coffee pickers who the company underpaid between 2011 and 2014.

An investigation by the U.S. Department of Labor’s Wage and Hour Division determined that Beneficiado de Café Las Indieras, doing business as Hacienda Remanso de Paz, and its president, Wilfredo Ruiz Vargas failed to pay the farm workers and coffee harvesters they employed the legally required minimum wage for all the hours they worked. Investigators also found that the defendants failed to create and maintain accurate records of their employees’ wages, hours and other conditions of employment, in violation of the Fair Labor Standards Act. In September 2013, the department filed suit against the defendants in the U.S. District Court for the District of Puerto Rico.

“Puerto Rico’s agricultural employers should take note of this case and its outcome. Denying low-wage, agricultural workers their legally required minimum wage will not be tolerated,” said Jose R. Vazquez, director of the Wage and Hour Division’s Caribbean District Office. “We have used and will continue to use all the investigation and enforcement tools at our disposal to protect these vulnerable workers and to ensure that they are paid every penny they have legally earned.”

The judgment incorporates a detailed compliance plan submitted by defendants to the department, which outlines corrective actions they will take to ensure they pay workers correctly going forward.

The judgment orders the defendants to:

• Maintain accurate and complete records as to employees’ work hours and pay rates, and to provide copies to the Wage and Hour Division.
• Ensure that Ruiz Vargas, the farm workers and seasonal employees participate in Wage and Hour Division training sessions on the FLSA’s minimum wage, overtime, record-keeping and anti-retaliation provisions.
• Pay employees at least the minimum wage while they attend this training.
• Provide written notification to the workers of their rights under the FLSA.

The judgment also prohibits Beneficiado de Café Las Indieras and Ruiz Vargas from:

• Directly or indirectly soliciting, suggesting or coercing employees to return or ‘kick back’ the back wage payments to the defendants.
• Discharging or retaliating against employees who disclose or threaten to disclose FLSA violations, cooperate in an investigation or refuse to participate in any activity reasonably believed to violate the FLSA.
• Violating the FLSA in the future.

The judgment also states that if the defendants default on payment of the back wages, the court can appoint a receiver to ensure payment at the defendants’ expense. The receiver will have the authority to collect and liquidate the defendants’ assets to ensure payment. The defendants must cooperate with the receiver.

“The coffee-growing industry in Puerto Rico employs thousands of workers, many of them coffee pickers who are paid traditionally by the piece for the coffee they pick. Paying by the piece is legal, but each employee must earn at least the federal minimum wage of $7.25 per hour. If a worker doesn’t pick enough to earn that amount from the piece rate, the employer must pay the difference. We remind employers that it is their responsibility to ensure that their employees are properly paid,” said Vazquez.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour, as well as time and one-half their regular rates for every hour they work beyond 40 per week. The law also requires employers to maintain accurate records of employees’ wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law.

The investigation was conducted by the Mayaguez Field Office, a subset of the division’s Caribbean District Office. The case was litigated by attorneys Summer Silversmith, Allison L. Bowles and Frances Y. Ma for the department’s Regional Office of the Solicitor in New York. 

For more information about the FLSA, contact the division’s toll-free helpline at 866-4US-WAGE (487-9243) or its Caribbean District Office at 787-775-1924. Information also is available at http://www.dol.gov/whd.  

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Perez v. Beneficiado De Cafe Las Indieras, Inc. d/b/a Hacienda Remanso De Paz, and Wilfredo Ruiz Vargas.
Civil Action Number: 3:13-cv-01730

Read this news release en españól.