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WHD News Release: [06/10/2014]
Contact Name: Jose A. Carnevali
Phone Number: (415) 625-2631
Release Number: 14-1028-SAN
US Department of Labor recovers $87,226 in back wages and damages for workers with disabilities employed by northern California company
SAN FRANCISCO The U.S. Department of Labor has obtained a consent judgment ordering Bregy VanCleve, president of Disabled Employees Rehabilitation Inc., and the company to pay $43,613 in liquidated damages to nine employees who were paid below federal minimum wage or not paid at all for one year. The department also assessed $9,900 in civil money penalties. The department previously obtained $43,613 in back wages for the employees.
"Low-wage, vulnerable workers have a right to meaningful work and pay protection under the law," said Susana Blanco, director of the Wage and Hour Division's San Francisco District Office. "Unfortunately, not all employers are vigilant in maintaining a well-run program in full compliance with the law. Being in compliance matters, and we will use all enforcement tools available, including litigation, civil money penalties and liquidated damages, as we did in this case, to prevent employers from exploiting workers."
The judgment, filed in the U.S. District Court in San Francisco, comes after an investigation by the department's Wage and Hour Division found the employer willfully violated the Fair Labor Standards Act's minimum wage and record-keeping provisions. Investigators established that the employer was paying some employees at rates lower than the federal minimum wage, as may be allowed under Section 14(c) of the FLSA.
Section 14(c) of the FLSA authorizes employers who apply for and receive certificates from the division to pay special minimum wages, generally less than the federal minimum wage, to workers whose earning or productive capacity in the job they are performing is impaired by a physical or mental disability. The employer must comply with a number of stringent requirements under the terms of the certificate. The division maintains a vigorous enforcement program to ensure certificate holders abide with all requirements. In this case, the company lacked the appropriate certification to pay a subminimum wage rate.
"This investigation demonstrates the department's commitment to vulnerable workers," said Janet Herold, the department's regional solicitor in San Francisco. "This should not have happened, and the fact that it was being done under the cloak of an organization presenting itself as having a charitable purpose, just makes these violations all the more shameful."
The company assembled and packaged goods, such as iPhone wallets and cases, and toys and first aid kits for DODOcase; River Soap; Domar Pacific; Feisty Elle; Foodzie; Golden Gate; Peak Design; Ploom; Robert Larson; Thomas Kelleher; and Blue Orange.
In general, 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 of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. However, since its enactment in 1938, the FLSA has contained provisions designed to promote employment opportunities for individuals with disabilities.
The FLSA further provides that employers who violate the law are, as a general rule, liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees.
The investigation was conducted by the division's San Francisco District Office. The consent judgment was filed by the department's Regional Office of the Solicitor in San Francisco.
For information about Section 14(c) and subminimum wage rates, visit http://www.dol.gov/whd/regs/compliance/whdfs39.pdf.
For more information about the FLSA and other federal wage laws, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd.