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WHD News Release: [11/14/2013]
Contact Name: Deanne Amaden or Jose A. Carnevali
Phone Number: (415) 625-2630 or x2631
Email: Amaden.Deanne@dol.gov or Carnevali.Jose@dol.gov
Release Number: 13-2071-SAN
Southern California screen printer pays more than $171,000 in back wages, damages and penalties following US Labor Department investigation
Fashion Graphics LLC supplied Macy’s Inc., Wal-Mart Stores Inc., Kohl’s and Hot Topic
SAN DIEGO Fashion Graphics LLC has paid $151,337 in back wages and liquidated damages to 185 employees after an investigation by the U.S. Labor Department's Wage and Hour Division found the company willfully violated the Fair Labor Standards Act's overtime and record-keeping provisions. An additional $19,712 in civil money penalties were assessed due to the willful nature of the violations. A consent judgment has been entered in the U.S. District Court, Central District of California.
The department's investigation established that the employer recorded employees' overtime hours on a separate payroll, using aliases for former employees, family members and unidentified people to conceal true identities. Overtime hours were then paid at employees' regular, straight-time hourly rates, in unrecorded cash, rather than at an overtime premium of one and one-half times those rates, as required by the FLSA. Employees routinely worked more than 40 hours per week.
"When an employer willfully uses deceptive practices that prevent employees from collecting wages owed under the FLSA, we must respond," said Ken Morrison, director of the San Diego District Office, which conducted the investigation. "This violation affected worker paychecks and, in turn, their quality of life. This investigation sends a clear message to this business and other employers that disregarding the basic rights of vulnerable, low-wage workers will cost you more than if you'd paid them properly in the first place."
Whenever goods are produced in violation of the FLSA's minimum wage, overtime or child labor provisions, the department can restrain those goods from being shipped via interstate commerce. This action is commonly referred to as invoking the "hot goods" provision and is an enforcement tool that the department uses to ensure the nation's workers receive fair pay and treatment. In this case, Fashion Graphics voluntarily agreed not to ship the goods produced after receiving the department's notice that the goods were "hot."
Fashion Graphics supplies products to retailers, including Macy's Inc., Wal-Mart Stores Inc., Kohl's and Hot Topic, and specializes in screen printing for T-shirts and other garments.
In addition to enjoining the employer from future violations, the consent judgment in this case requires Fashion Graphics to hire an independent third party to conduct annual training on the FLSA for all of its managers and payroll personnel. It also requires the employer to provide notice of this judgment to all employees, along with written notice of their rights under the FLSA.
The law 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 FLSA provides that employers who violate the law are generally liable to employees for their back wages and an equal amount in liquidated damages, which are paid directly to the affected employees.
The judgment was filed in the U.S. District Court of the Los Angeles Central District. The department was represented by its regional Office of the Solicitor in Los Angeles. For more information about the FLSA, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243) or its San Diego District Office at 619-557-5110. Information is also available at http://www.dol.gov/whd/.