Working for $2.50 per hour: US Department of Labor’s crackdown on grossly exploitive, abusive pay practices in San Diego continues
SAN DIEGO – While dozens of companies along the U.S. border in California hire workers from Mexico to labor as warehouse and logistics’ workers in scores of non-descript buildings, U.S. Department of Labor investigators and attorneys are also working hard – to prevent exploitation of these workers and hold employers accountable.
Since a landmark investigation of Premar Global Warehouse Logistics in September 2021, Wage and Hour Division investigators have found three more San Diego-area customs warehouses paying workers in Mexican pesos at an equivalent rate of as little as $2.50 per hour in violation of the Fair Labor Standards Act.
Based on these investigations, the department’s Office of the Solicitor reached consent judgments against the three employers – Columbia Export Group PDSA, OMG Global Logistics and Atlas Freight Forwarding – resulting in the U.S. District Court for the Southern District of California ordering the companies to pay nearly $2 million combined in minimum and overtime back wages to 108 workers.
In addition, the companies are also ordered to pay a total of $56,675 in penalties given their reckless disregard of the FLSA’s minimum wage and overtime requirements.
“All employees working in the U.S. are entitled to the full protections of the Fair Labor Standards Act,” said Solicitor of Labor Seema Nanda. “Through our enforcement efforts, these San Diego employers have come to realize that they cannot avoid federal labor protections simply because their employees return home across the border at the end of the workday. We encourage others in this industry to take heed and avoid the costly consequences of worker exploitation by paying their employees as legally required. The department does not tolerate wage theft and worker abuse.”
The division’s investigators determined Columbia Export Group PDSA, OMG Global Logistics and Atlas Freight Forwarding engaged in similar schemes to exploit workers and circumvent the FLSA, including using affiliates in Mexico to pay their employees as if they worked in Mexico, not in the U.S. The investigations found the following:
- A.G.A. Investments II Inc. – operating as Columbia Export Group – and owner Arturo Ruffo denied federal minimum wages and overtime premiums to employees crossing the border every day to work at the company’s Otay Mesa warehouse. The court ordered the defendants to pay $267,408 in minimum wages and $648,269 in overtime to 60 employees, and $34,958 in penalties. Columbia Export Group has locations in Ensenada, Tijuana, La Paz, San Jose del Cabo and Cabo San Lucas.
- OMG Freight Forwarders, OMG Global Logistics and owner Oscar Mayer paid workers crossing from Mexico to work at the company’s Otay Mesa warehouse below minimum wage and denied overtime for hours worked beyond 40 in a workweek. The employer paid the shortchanged workers through an affiliate’s payroll in Mexico as direct deposit in Mexican pesos. The company paid employees as little as $2.50 per hour. The court ordered the company to pay $233,141 in minimum wages and $588,932 in overtime to 31 employees, and $10,921 in penalties.
- Atlas Freight Forwarding Inc. of San Diego paid workers at its Otay Mesa warehouse at a flat rate and in Mexican pesos for all hours worked. The company used the payroll of its Tijuana-based Coordinadora de Servicios Aduanales Atlas to process the payments. The court ordered the company to pay $111,584 in minimum and overtime back wages to 13 employees, and $10,790 in penalties.
“Exploitation like what we found in these investigations is unacceptable. No one should be paid as little as $2.50 per hour,” said Acting Wage and Hour Division Administrator Jessica Looman. “The outcome of these cases sends a clear message that the U.S. Department of Labor will hold these labor law violators accountable.”
The Wage and Hour Division and the Consulate General of Mexico in San Diego maintain a productive working relationship to ensure that Mexican nationals working in Southern California are aware of their labor rights under federal law, including the right to report labor violations without fear of threats and intimidation.
“Paying warehouse workers below minimum wage and failing to pay overtime are illegal practices that should never be tolerated,” said Consul General of Mexico Carlos González Gutierrez in San Diego, who recalled that providing protection to Mexican nationals is the main task of the institution he represents. “May these cases remind us all, both workers and employers, that once the worker crosses the Mexico-U.S. border, U.S. labor law applies and will be soundly enforced.”
Consul General Gonzalez Gutierrez underscored the longstanding partnership with the U.S. Labor Department and encouraged Mexican workers to contact the Consulate at 619-231-3847 or at firstname.lastname@example.org if they need support, consular protection or free legal advice.
The division’s San Diego District Office investigated these cases. Wage and Hour Counsel Boris Orlov and trial attorney Adriana Ahumada of the department’s Office of the Solicitor in San Francisco handled the cases for the department.
The division enforces the law regardless of a worker’s immigration status and can speak confidentially with callers in more than 200 languages. For more information about the FLSA and other laws enforced by the division, contact its 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.