US Department of Labor finds Chicago towing company denies minimum wage, overtime to employees misclassified as independent contractors
CHICAGO – The operators of a Chicago towing company that promises customers round-the-clock service failed to pay dozens of its workers legally for the hours they worked providing emergency road service.
U.S. Department of Labor Wage and Hour Division investigators found ACD Emergency Road Services LLC violated the Fair Labor Standards Act after it misclassified hourly workers as independent contractors instead of employees, and subsequently failed to pay them minimum wage or overtime.
Minimum wage violations resulted from the employer’s practice of making illegal deductions from workers’ wages for vehicle damages, traffic tickets, uniforms and even for failing to give a “timely” resignation notice. Investigators also found that ACD paid its hourly employees “straight time” for all the hours they worked. By doing so, the employer violated overtime regulations when employees worked more than 40 hours in a workweek.
ACD owners Camara Bowden and Dantea Grayson paid $166,030 in unpaid overtime and minimum wages and interest to 56 workers as part of a consent judgment entered in U.S. District Court in Chicago on June 21, 2021. They also agreed to comply with the FLSA in the future.
“The misclassification of employees as independent contractors is a serious and costly problem, cheating workers, law-abiding employers, and the whole economy,” said Wage and Hour Division District Director Tom Gauza in Chicago. “The perception that a particular pay practice is an ‘industry standard’ in no way means that it’s legitimate. Other employers should use the outcome of this investigation and this lawsuit as an opportunity to review their own pay practices to ensure they comply with the law, and to avoid costly violations like those found in this case.”
The FLSA includes an exemption from overtime that applies to tow truck drivers like those employed by this company, but not to its light truck service drivers or shop helpers.
For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the division’s toll-free helpline at 866-4US-WAGE (487-9243). 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.
U.S. District Court for the North District of Illinois: Martin J. Walsh, Secretary of Labor v. ACD Emergency Road Services LLC, Camara Bowden, Dantea Grayson
Civil Action No.: 1:21-cv-02118