ELIZABETH CITY, NC – After a U.S. Department of Labor Wage and Hour Division (WHD) investigation,  Huntsville, Alabama, aviation maintenance company Y-Tech Services Inc. will pay $95,000 in back wages to 12 employees for failure to pay prevailing wage rates required for work performed under a federal contract for the U.S. Coast Guard in Elizabeth City.

WHD investigators determined that Y-Tech Services Inc. violated provisions of the McNamara-O’Hara Service Contract Act (SCA) by erroneously categorizing and paying the employees as aircraft workers when they actually performed the work of sheet metal employees, which requires the payment of higher rates. Y-Tech Services Inc. remained cooperative throughout the investigation, and worked with WHD to rectify the problems immediately.

“When employers receive federal funds to provide services to the government, they must comply with all applicable laws to ensure that their employees receive legally required pay and benefits,” said Wage and Hour Division District Director Richard Blaylock, in Raleigh. “Violations can be avoided, and we encourage employers to reach out to us for guidance.”

The SCA requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates, including prospective increases, contained in a contractor’s collective bargaining agreement.

For more information about the SCA and other laws enforced by WHD, contact WHD’s toll-free helpline at 866-4US-WAGE (487-9243) or visit the Division’s web site. WHD also offers a search tool that allows users to determine if they the Division has collected back wages owed to them.

RALEIGH, NC – The U.S. Department of Labor’s Wage and Hour Division (WHD) has debarred the Lake Placid, Florida, company Vasquez Citrus & Hauling Inc. and Juan Vasquez, an H-2A farm labor contractor, from applying for H-2A certification for a period of three years for violations of the program’s provisions. WHD also issued the company a civil money penalty of $15,153.

WHD investigators found Vasquez Citrus & Hauling Inc., working for Ham Farms in Snow Hill, North Carolina, failed to reimburse employees for their inbound travel expenses as required by law. Additionally, Vasquez failed to provide adequate payroll or time records to the investigators.

“The resolution of this case reflects the U.S. Department of Labor’s commitment to strictly enforce our nation’s immigration rules that protect U.S. workers and the guest workers who participate in our visa programs,” said Richard Blaylock, Wage and Hour Division District Director in Raleigh. “The Department of Labor offers a great deal of compliance assistance in the agricultural industry, and we encourage all employers to make use of the many tools we provide to help them understand and comply with the law, and to call us for assistance.”

The Immigration and Nationality Act authorizes the H-2A program, which allows the lawful admission into the U.S. of temporary, nonimmigrant workers to perform agricultural labor or services. WHD enforces the labor provisions of this program.

Before the U.S. Citizenship and Immigration Services can approve an employer’s petition for H-2A visa workers, the employer must file an application with the Department stating that an insufficient number of U.S. employees are able, willing, qualified, and available to work; and that the employment of non-immigrant, temporary workers will not adversely affect the wages and working conditions of similarly employed U.S. workers.

Federal law provides for numerous employee protections and employer requirements with respect to wages and working conditions that do not apply to non-agricultural programs.

For more information about H-2A and other laws enforced by the Division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd.

Editor’s Note:  This news release was changed to correct the name of the state where the farm labor contractor is located.

ATLANTA, GA – To ensure compliance with federal wage laws, the U.S. Department of Labor’s Wage and Hour Division (WHD) is undertaking an initiative in Florida, Kentucky, North Carolina, and South Carolina to strengthen compliance with the labor provisions of the H-2A and H-2B temporary visa programs.

The initiative includes providing compliance assistance information to employers and stakeholders, as well as conducting investigations of employers using these programs. A key component of the investigations is ensuring that employers recruit U.S. workers before applying for permission to employ temporary nonimmigrant workers.

“Any employer seeking workers under these programs must be ready and willing to hire qualified U.S. applicants,” said Wayne Kotowski, Wage and Hour Division Regional Administrator in Atlanta. “This initiative demonstrates our commitment to safeguard American jobs, level the playing field for law-abiding employers, and protect guest workers from being paid less than they are legally owed or otherwise working under substandard conditions.”

The Immigration and Nationality Act authorizes the lawful admission of temporary, nonimmigrant workers (H-2A workers) to perform agricultural labor or services of a temporary or seasonal nature. The H-2B program permits employers to temporarily hire nonimmigrants to perform nonagricultural labor or services in the United States.

Before an employer can be approved to request guest workers under the H-2A or H-2B programs, they must file an application with the Department stating that:

• An insufficient number of U.S. employees are able, willing, qualified, and available to work; and
• The employment of non-immigrant, temporary workers will not adversely affect the wages and working conditions of similarly employed U.S. workers.

WHD offers multiple compliance assistance resources to provide employers the tools they need to comply with the law. The Division encourages employers to reach out to them for information or with specific questions. All calls are confidential.

For more information about the H-2A, H-2B and other laws enforced by the Division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at https://www.dol.gov/whd.

CONCORD, NH – The U.S. District Court for the District of New Hampshire has sentenced Kevin Corriveau, owner and operator of Kevin Corriveau Painting Inc. of Nashua, to six months imprisonment; two years of supervised release, post-imprisonment; and a $25,000 criminal fine for one count of obstruction of justice.

Corriveau pled guilty on Dec. 15, 2017, to obstructing two U.S. Department of Labor Wage and Hour Division (WHD) investigations and a subsequent civil lawsuit filed by the Department of Labor’s Office of the Solicitor for alleged violations of the Fair Labor Standards Act (FLSA). In his plea, Corriveau admitted that he caused an employee of his company to provide false information to WHD investigators in 2009 and 2011 and knowingly created and provided fraudulent information to the Department of Labor attorneys in 2013 in connection with the civil suit.

In a related case, Sharon Mercuri - Corriveau Painting Inc.’s company treasurer and office manager - pled guilty and was fined $10,000 on Dec. 21, 2017, for two counts of criminally violating the FLSA, including willfully failing to pay proper overtime and knowingly making a materially false statement in connection with the WHD’s investigation.

“This prosecution, conviction, and sentence send a message to all employers that knowingly providing false information or falsified documents to the U.S. Department of Labor can put their individual liberty at risk,” said Daniel Cronin, Wage and Hour Division Northern New England District Director.

“The Department of Labor’s agencies stand ready to refer criminal prosecutions to the Office of the Inspector General and U.S. Attorney’s offices cases in which employers lie to investigators and fabricate records as part of a scheme to cover up their violations,” said Michael Felsen, Regional Solicitor of Labor in Boston. “We greatly appreciate the New Hampshire U.S. Attorney’s Office’s efforts to bring to justice such an individual in this matter.”

“Kevin Corriveau solicited his employees to make false statements to investigators during a WHD investigation which uncovered over $200,000 in unpaid wages. The Office of Inspector General will continue to investigate those who obstruct the Department’s efforts to ensure the integrity of its programs,” said Peter Nozka, Acting Special Agent-in-Charge, New York Region, U.S. Department of Labor Office of Inspector General.

The Department’s Office of the Inspector General investigated the criminal case with assistance from the Department’s Office of the Solicitor and Employee Benefits Security Administration. Assistant U.S. Attorney Robert M. Kinsella of U.S. Attorney Scott W. Murray’s office and Special Assistant U.S. Attorney Scott Miller prosecuted the cases. Miller is a Senior Trial Attorney at the Department of Labor’s Office of the Solicitor in Boston.

SAN FRANCISCO, CA – IT employer Cloudwick Technologies Inc., based in Newark, California, will pay $173,044 to 12 employees for violations of the federal H-1B foreign labor certification program after an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD).

WHD investigators found that the company paid impacted employees well below the wage levels required under the H-1B program based on job skill level, and also made illegal deductions from workers’ salaries. As a result, some of the H-1B employees that Cloudwick brought from India with promised salaries of up to $8,300 per month instead received as little as $800 net per month.

“The intent of the H-1B foreign labor certification program is to help American companies find the highly skilled talent they need when they can prove that a shortage of U.S. workers exists,” said Susana Blanco, Wage and Hour Division District Director in San Francisco. “The resolution of this case demonstrates our commitment to safeguard American jobs, level the playing field for law-abiding employers, and protect guest workers from being paid less than they are legally owed.”

In addition to the recovery of back wages, the IT employer has also signed an enhanced compliance agreement requiring them to hire an independent third-party monitor to help ensure future compliance.

Cloudwick Technologies provides data solution services to major corporations nationwide, including American Express, Bank of America, Apple, Cisco, Comcast, Intuit, Safeway, Verizon, Visa, and many others.

To further deter and detect abuse, U.S. Citizenship and Immigration Services has established an email address which will allow individuals (including both American workers and H-1B workers who suspect they or others may be the victim of H-1B fraud or abuse) to submit tips, alleged violations and other relevant information about potential H-1B fraud or abuse. Individuals also can report allegations of H-1B violations by submitting Form WH-4 to the department’s Wage and Hour Division.

For more information about the department’s foreign labor certification program, visit https://www.foreignlaborcert.doleta.gov/. For more information on enforcement of the nondiscrimination requirements of the H-1B program, visit https://www.dol.gov/whd/immigration/h1b.htm.

LANSDOWNE, PA – The U.S. District Court for the Eastern District of Pennsylvania has ordered Central Laundry Inc., owner George Rengepes and business operator Jimmy Rengepes to pay $239,269 in back wages, and an equal amount in liquidated damages to 21 employees following an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD).

WHD determined that the Lansdowne, Pennsylvania, laundry violated the minimum wage, overtime, and recordkeeping provisions of the Fair Labor Standards Act (FLSA) when it paid some employees at rates as low as $5 per hour, in cash, and failed to pay employees overtime when they worked more than 40 hours in a week. Investigators found some employees worked as many as 90 hours per week at sub-minimum wage rates with no overtime premium. The federal minimum wage is currently $7.25 per hour.

WHD also found that Central Laundry - a company that, under the name Olympic Linen, provides laundry service for hotel and restaurant operators in Pennsylvania, New York, New Jersey, and Delaware - did not keep FLSA-required records.

“This case is an example of a company committing egregious, ongoing minimum wage and overtime violations,” said James Cain, Director of Wage and Hour’s Philadelphia District Office. “We urge employers to reach out to us for guidance, and to use the numerous resources we offer to provide employers the tools they need to comply with the law.”

In addition to paying the back wages and liquidated damages, the court has enjoined the company from violating the FLSA in the future.

“This decision holds the company accountable for its failure to comply with the law, and helps ensure that employees are paid correctly,” said Regional Solicitor Oscar L. Hampton III. “Central Laundry’s willful disregard for the law harmed employees and gave the company an unfair competitive advantage over other employers who play by the rules.”

The FLSA requires that covered, non-exempt 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 for hours worked beyond 40 per week. Employees must also maintain accurate time and payroll records. For more information about the FLSA and other federal wage laws, call the Division’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at https://www.dol.gov/whd.  

LEACHVILLE, AR – After an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD), Arkansas staff sourcing company Wallace, Rush, Schmidt Inc. (WRS) has paid $708,922 to settle overtime, minimum wage, and recordkeeping violations of the Fair Labor Standards Act (FLSA).

WHD investigators found WRS failed to maintain complete and accurate records, which led to the Leachville-based employer’s failure to pay 1,393 employees hired to assist with cleanup after prolonged rains caused flooding in Baton Rouge and other Louisiana worksites in 2016. Investigators determined that limited access to technology likely contributed to a delay in site supervisors’ ability to submit employee timesheets that left many workers unpaid for weeks. 

“Companies have an obligation to pay workers correctly and to do so on time,” said Betty Campbell, Wage and Hour Division Administrator. “The U.S. Department of Labor is committed to ensuring that employers have the tools they need to comply with the law. We offer multiple resources, including materials specific to payroll obligations during disaster recovery.  Employers are encouraged to reach out to us for assistance, or to attend any of our many educational outreach events.”

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the toll-free helpline at 866-4US-WAGE (487-9243).

Information is also available at https://www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by the Division.

WEST COVINA, CA – United States Auto Club Inc. (USAC), a Texas-based emergency roadside assistance provider for the U.S. Postal Service (USPS), will pay $649,996 to 29 employees for violations of federal contract provisions of the McNamara-O’Hara Service Contract Act (SCA) and the Contract Work Hours and Safety Standards Act (CWHSSA) following an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD). WHD determined that USAC owes the employees $377,512 in unpaid prevailing wages and $165,116 in required health and welfare benefits. The contractor will also pay $107,367 in overtime. In addition to the $649,996 found due, the contractor was also assessed $16,480 in liquidated damages.

Investigators found that USAC contracted with subcontractor Norbert’s Towing to service USPS vehicles in the city of Los Angeles and Orange County but failed to pay all employees the required prevailing wages, overtime, and health and welfare benefits. WHD found the prime contractor responsible for $649,996 due to 29 employees as a result of paying employees only half of the $20.84 per hour prevailing wage required by the contract.

“No contractor should gain an economic advantage by paying workers below the wages and fringe benefits required on a prevailing wage project,” said Skarleth Kozlo, Wage and Hour Division Assistant District Director in West Covina. “Not only does this practice undercut what the workers involved are legally owed for their work, it results in unfair competition for contractors who play by the rules.”

In 2008, the WHD found USAC and another subcontractor, Direct Towing, owed workers in Dallas $85,000 in back wages due as a result of similar SCA violations.

The SCA requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates (including prospective increases) contained in a predecessor contractor's collective bargaining agreement. For prime contracts in excess of $100,000, contractors and subcontractors must also, under the provisions of the CWHSSA, pay laborers and mechanics, including guards and watchmen, at least one and one-half times their regular rate of pay for all hours worked over 40 in a workweek.

For more information about the SCA and other laws enforced by the Division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at https://www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by WHD.

CLARKSTON, MI – After an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD), Summit Properties & Development Co. Inc., based in Clarkston, Michigan, will pay a total of $137,237 in back wages and liquidated damages to 17 employees.

WHD investigators determined the general contractor misclassified some employees as independent contractors, and failed to pay them overtime when they worked more than 40 hours in a workweek.

“Wage violations can be avoided when employers understand the requirements under federal law,” said Timolin  Mitchell, Wage and Hour District Director in Detroit. “We encourage employers to contact the Department of Labor by phone, online, in person, or to attend any of our outreach events to learn more about their responsibilities or obtain assistance. The Department offers many tools to help employers comply.”

As a result of this investigation Summit Properties has revised its employee handbook and has agreed to attach information to all future subcontractor agreements to help educate those employers and to ensure employees receive the wages they have rightfully earned.

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). Information is also available at www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by WHD.

PHOENIX, AZ – After a June 2017 U.S. Department of Labor Wage and Hour Division (WHD) investigation found 69 Mexican guest workers living in a life-threatening housing encampment at an El Mirage farm, the U.S. District Court of Arizona in Phoenix has entered judgments against a grower and its recruiting agents for violations of the H-2A guest worker program.

Under the consent judgments, the court has ordered G Farms LLC, owner Santiago Gonzalez, and agents Jesus Raul Leon and LeFelco to take specific steps to ensure strict compliance with the terms of the Department’s temporary worker programs.

WHD discovered G Farms guest workers housed in converted school buses, truck trailers, and a shed that were overcrowded, unsanitary, and inadequately ventilated, even as daytime temperatures exceeded 100 degrees. In addition to those conditions, investigators found G Farms and Leon set up kitchen facilities in another converted school bus, with combustible gas lines dangling through windows.

During its investigation, G Farms and agents LeFelco and Leon falsely represented to the Department that they would house the guest workers in 30 hotel rooms, each with a refrigerator and a microwave.

“The violations of the clear and straightforward requirements of the H-2A visa program represented one of the most severe dangers to human life that we have seen,” said Janet Herold, Regional Solicitor. “The Department moved immediately to ensure these workers’ safety. We have zero tolerance for such abuse, and the misconduct and misrepresentations to both domestic and foreign workers in this case is what exacerbated the harm.”

“These judgments make clear that the Department of Labor will use all enforcement tools available against major agents involved in illegal labor practices, abuse of workers, and systemic visa fraud,” said Eric Murray, Wage and Hour Division District Director in Phoenix. “Our work continues to protect employees and to level the playing field for law-abiding employers.”

This is not the first time that LeFelco and Leon used misrepresentations to assist employers with obtaining guest workers. In recent years, Department investigations into LeFelco, Leon, and their clients in the construction and agricultural industries have revealed multiple instances of visa fraud and abuse of the H-2A and H-2B guest worker programs. These cases have already resulted in back wage and civil money penalty assessments approaching $1 million.

Under the consent judgments, LeFelco, Leon, and anyone acting together with them are now subject to punishment for contempt of court if they file any false or unsubstantiated applications under any guest worker program. Under the terms of its consent judgment, G Farms is required to provide all workers with a notice of their rights and a work contract in their native language at the time of hire.

Additionally, the employer must provide housing that complies with detailed standards designed to ensure that workers have a safe place to live while working in the U.S. G Farms also must pay employees for all the hours that they work, including time spent traveling from the employer-provided housing to the worksite. As with Lefelco and Leon, G Farms is subject to punishment for contempt of court for any future violations of any guest worker program.

The H-2A temporary agricultural program establishes a means for agricultural employers, who anticipate a shortage of domestic workers, to bring non-immigrant foreign workers to the U.S. to perform agricultural labor or services of a temporary or seasonal nature.

The program requires an employer to attest to the Department that it will offer a wage that equals or exceeds the highest of the following: the prevailing wage for the occupation and geographic area, applicable federal minimum wage, state minimum wage or local minimum wage. This wage will be paid to the H-2A workers and certain similarly employed U.S. workers during the entire period of the approved labor certification. The program also establishes recruitment and displacement standards to protect similarly employed U.S. workers.

For more information about the H-2A program, the Fair Labor Standards Act and other federal wage laws, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at https://www.dol.gov/whd.