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News Brief

Oregon cleaning service ordered to pay $70K in back wages to 19 workers

Employer tried bankruptcy scheme to avoid liability for violating federal labor laws

Employer:Stars Cleaning Inc., doing business as Stars Cleaning Service

Site:14320 SW Barlow Court
Beaverton, Oregon

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found that Stars Cleaning Service paid its janitorial employees a fixed daily rate without regard to the number of hours they actually worked, resulting in violations of the minimum wage and overtime provisions of the Fair Labor Standards Act. Investigators found that the employees worked more than 12 hours a day, six days a week, on average. The daily rates, when divided by the number of hours employees worked, yielded earnings that fell below the federal minimum wage of $7.25 per hour, and did not provide an overtime premium for hours worked beyond 40 in a week.

Once the investigation started, owner Estela Ramos began harassing and intimidating the workers with immigration-related threats, directing workers to falsify time records, threatening to reduce their hours or pay and offering cash to employees to remain silent about alleged violations.

The department secured an injunction to stop the threats and intimidation, and filed a complaint against Ramos and Stars Cleaning for the unpaid wages. Soon after, the company and its owner filed for bankruptcy.  Investigators later discovered that the day after the bankruptcy filing, the owner’s son –Vismark Ramos– incorporated a new company named White Star Cleaning Inc., which continued to operate the same cleaning business, at the same location, with the same employees, and servicing the same clients as Stars Cleaning. In response, the department amended its complaint and added White Star Cleaning and Vismark Ramos as ‘successors in interest’ to Stars Cleaning. This action held White Star and Vismark Ramos liable for the FLSA violations and unpaid wages owed to workers by the previous company.

Resolution: In a consent judgment filed in the U.S. District Court for the District of Oregon on Sept. 22, 2016, a judge ordered White Star Cleaning and owner Vismark Ramos to pay $70,000 in back wages to 19 employees. The judge also ordered the defendants not to take any action to deter employees from asserting their rights under the FLSA or interfere with any investigation of wage or other violations.

Quote: “This judgment sends the clear message that an employer cannot use the bankruptcy system to avoid liability for federal wage violations,” said Thomas Silva, the Wage and Hour Division’s district director in Portland. “We will continue to use every enforcement tool available to protect employees’ rights against such employers.”

Information: The FLSA requires that covered, nonexempt 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. The act also provides that employers who violate the law are liable to employees for back wages and an equal amount in liquidated damages.

For more information about federal wage laws administered by the Wage and Hour Division, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

Read this news brief in Spanish.

Agency
Wage and Hour Division
Date
November 30, 2016
Release Number
16-2215-SAN
Contact: Leo Kay
Phone Number
Contact: Jose Carnevali