BOSTON – The U.S. Department of Labor and UnWrapped, Inc. have reached a settlement agreement that will allow employees of the Massachusetts sewing factory to recover $890,021 in back wages and liquidated damages to resolve past violations of the federal Fair Labor Standards Act.

An investigation by the department’s Wage and Hour Division found that UnWrapped failed to pay proper overtime rates to 327 piece rate and hourly workers between April 2014 and April 2016, and failed to keep accurate records. The FLSA requires that employees receive one-and-one-half their regular rates of pay when they work more than 40 hours in a work week.

The division’s investigation was part of a joint enforcement effort with the Fair Labor Division of the Massachusetts Attorney General’s Office. The state’s investigation identified alleged violations of Massachusetts law involving failure to pay minimum wage, failure to provide earned sick time and retaliation against two workers who cooperated with the investigation, for which the company will pay $293,170.

“This cooperative federal-state effort and the resulting settlements provide these 327 employees, many of them low-wage workers, with wages they earned but were not paid in the first place. They also help level the economic playing field for those companies that comply with the law and pay their employees correctly,” said Mark Watson Jr., the division’s northeast regional administrator.

UnWrapped is a Lowell, Mass., company that produces products, such as mattress covers, pillows, tote bags and custom items, under contract.

Under the terms of the Wage and Hour Division agreement, UnWrapped will complete payment of back wages and damages to the workers by no later than March 15, 2017, and will submit proof of payment to the division. The company has paid a civil money penalty of $8,350 for a child labor violation and also agreed to refrain from retaliation against any employees for filing a complaint or testifying in a matter related to the FLSA.

The Wage and Hour Division is committed to providing employers with the tools they need to understand and comply with the variety of labor laws the division enforces. It offers useful resources ranging from an interactive E-laws advisor to a complete library of free, downloadable workplace posters. In addition, the division’s Community Outreach and Resource Planning Specialists conduct ongoing outreach activities to educate stakeholders, including employers, employees, business and labor groups and professional associations, among others, with accessible, easy-to-understand information about their rights and responsibilities.

Trial Attorney Mark Pedulla of the department’s Boston Regional Solicitor’s Office provided legal support in this matter.

For more information about the FLSA, contact the division’s toll-free helpline at 866-4US-WAGE (487-9243) or its Boston District Office at 617-624-6700. Information also is available at http://www.dol.gov/whd/.

Employer: Cintas Fire Protection Services

Sites: 2188 Del Franco St., #70
San Jose, California

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division found that Cintas Fire Protection Services violated the overtime provisions of the Fair Labor Standards Act when it failed to pay fire sprinkler installers and testers for some hours they worked that were not billable to clients. These hours included time spent sending email, completing reports and submitting timesheets. The division has cited Cintas several times in the past for similar violations at its locations across the nation.

Resolution: Cintas Fire Protection Services will pay $1.3 million in unpaid wages and damages to 81 workers throughout Northern California and an additional $44,500 in civil penalties. The company also has agreed to stringent monitoring to prevent future violations, including:

• Organizing a nationwide compliance team.
• Establishing a hotline for workers to voice their complaints.
• Reserving the right to terminate managers who allow off the clock work to occur.
• Agreeing to conduct rigorous field audits.

Quote: “Cintas shortchanged employees for some hours they worked that could not be billed to clients, despite us explaining the law to them directly in the past,” said Susana Blanco, director of the Wage and Hour Division office in San Francisco. “The results of this investigation should send a strong message about how seriously the Wage and Hour Division takes compliance. Not only will dozens of workers now receive their long overdue wages, but Cintas has also agreed to a series of measures to prevent these types of violations in the future.”

Information: Cintas Fire Protection Services is a subsidiary of Cintas Corp. Headquartered in Cincinnati. Cintas provides more than 900,000 customers with highly specialized products and services such as corporate identity uniform programs; entrance and logo mats; restroom supplies; promotional products; first aid; safety; fire protection products and services; and industrial carpet and tile cleaning. The company operates more than 400 facilities in North America – including six manufacturing plants and eight distribution centers. For more information about federal wage laws administered by the Wage and Hour Division, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

NEW YORK – A hotel management company and the company which supplied employees to nine of its New York City hotels have agreed to resolve an investigation by the U.S. Department of Labor’s Wage and Hour Division that found violations of the minimum wage, overtime and recordkeeping requirements of the Fair Labor Standards Act.

The hotels’ management company – Hersha Hospitality Management LP – and Labor for Hire and related companies, which provide employees to work at the hotels, have agreed to take extensive remedial measures designed to ensure future FLSA compliance. In addition, the company that provided the workers has agreed to pay $275,000 in back wages and an equal amount in liquidated damages to more than 600 employees.

HHM is one of the nation’s leading hotel management investment and development companies, providing operational support, revenue management and guest service support – for more than 125 hotels in 20 states. It is headquartered in Harrisburg, Pennsylvania. Labor for Hire is based in Brooklyn. The division determined that under the FLSA, these companies are considered to have jointly employed the workers supplied by Labor for Hire for the nine HHM-managed hotels.

The division found instances where the companies:

• Misclassified some workers as independent contractors rather than employees.
• Failed to pay some employees for hours spent in training.
• Failed to pay some employees overtime for weeks when they worked more than 40 hours, including paying room attendants on a per-room basis without any overtime premium.
• Failed to make and keep adequate records of employees’ daily and weekly hours of work, or their regular or overtime rates of pay.

“This agreement recovers wages and damages for these hundreds of workers, and commits both employers to implementing comprehensive actions to prevent future violations at all hotels for which HHM hires staffing agencies to provide workers,” said David An, district director of the division’s ­­­­­­­­­­­­­­­­­New York City District Office.

“Wage violations negatively impact both employees who are denied their legally earned compensation and those businesses which are put at a competitive disadvantage because they pay their employees correctly in the first place. We do not hesitate to take appropriate steps to rectify them when they occur and pursue outcomes to prevent their recurrence,” said Jeffrey S. Rogoff, the department’s regional solicitor of labor in New York.

As part of the resolution of this case, HHM agrees to take the following actions at all HHM-managed hotels across the nation:

• Ensure that contracts with staffing agencies servicing HHM-managed hotels include provisions requiring compliance with the FLSA.
• Designate a corporate compliance officer, who will oversee a confidential employee complaint hotline and investigate and resolve complaints of wage violations and
• Train managerial employees who work at HHM-managed hotels on topics including how to properly keep time records, how to compute the hours worked by hotel workers, how to calculate and record breaks and meal periods, and on the rights of workers to engage in activities protected by the FLSA without fear of retaliation. 

In addition, at the nine hotels covered by the investigation, HHM agrees to conduct regular audits of pay records, investigate and resolve violations, and decline to renew contracts with non-compliant staffing agencies.

LFH has signed a separate compliance agreement that, in addition to requiring the payment of back wages and liquidated damages, commits the labor provider to:

• Include a written provision in all contracts with all entities to which they provide workers specifically requiring that those employers comply with all applicable laws, rules and regulations, including but not limited to the FLSA.
• Ensure that all of LFH’s managerial employees are familiar specifically with all applicable laws, rules, and regulations regarding waiting time, rest and meal periods and paying employees on a piece-rate basis.
• Train all newly hired or newly promoted managerial employees on the same topics within 30 days of their employment start date.
• Provide each LFH employee with a copy of the FLSA Basic Information Sheet, in English, Spanish and Russian. 

Labor for Hire provided room attendants, housekeepers, supervisors, housemen, stewards, engineers, engineer helpers, maintenance workers, laundry workers, kitchen helpers, dishwashers, cooks, servers, bussers, hostesses, front desk staff, and maintenance workers, among other positions to work at HHM hotels.

The HHM-managed hotels covered by the investigation are:

• Hampton Inn at 320 Pearl St.
• Hampton Inn at 32 Pearl St.
• Hilton Garden Inn at 148-18 134th St., Jamaica.
• Hilton Garden Inn at 39 Avenue of the Americas.
• Hilton Garden Inn at 206 East 52nd St.
• Holiday Inn at 51 Nassau St.
• Holiday Inn Express at 126 Water St.
• Sheraton Hotel at 132-26 South Conduit Ave., Jamaica.
• Hilton Garden Inn at 237 West 54th St.

The division’s ­­­­­­­­­­­­­­­­­New York City District Office conducted the investigation, and Jason Glick, Elena Goldstein, and Dustin Saldarriaga, attorneys from the department’s Office of the Regional Solicitor in New York assisted the division in securing the settlement.

For additional information about these and other laws enforced by the Wage and Hour Division, call its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd.

LOS ANGELES – The U.S. Department of Labor investigated two popular Solvang tourist restaurants and determined that they denied wait staff break time to express breast milk in violation of the Fair Labor Standards Act.

Investigators with the department’s Wage and Hour Division found that Paula’s Pancake House and the Belgian Café, which share common ownership, denied the nursing mother her right to break time to express milk in the workplace. The employer also retaliated against the woman when she voiced concerns, investigators determined.

“Employers must accommodate the needs of workers to express milk” said Susan Bacon, assistant director of the Wage and Hour Division in Los Angeles. “These restaurants denied a woman her legally required break time and basic facilities and, when one employee spoke up for herself, the employer retaliated against her for requesting something that is well within her rights.”

The investigation disclosed that managers at Paula’s and the Belgian Café verbally discouraged the employee from taking breaks to express breast milk. Additionally, the employer failed to offer express milking facilities that were shielded from public view, or free from coworkers’ and public intrusion.

The investigation found that retaliatory actions included the employer reassigning one employee to a later shift and moving her to a slower counter section of the restaurant in an attempt to reduce impact on customer service during her pump breaks. These changes directly impacted her ability to earn tips and came after she requested time and space to express milk.

The division found the restaurants’ actions established a hostile environment for all nursing mothers, discouraging them from taking their breaks fearing retaliation of losing their section or shift.

To address the investigation’s findings, the owner of Paula’s Pancake House and the Belgian Café has signed a compliance agreement with the department, requiring the employer to provide training on FLSA compliance to management staff, and paid $666 in back wages and damages to the employee for the retaliatory actions that reduced her schedule.

The FLSA’s Section 7 requires employers to provide reasonable break time for an employee to express breast milk for her nursing child. Employers are also required to provide a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk. For more information, visit dol.gov/whd/nursingmothers.

Employer: Star Finishes LLC
9705 Burnet Rd., # 317
Austin, TX 78758

Site: Austin, Texas

Investigation Findings: U.S. Department of Labor Wage and Hour Division investigators in Austin found Star Finishes LLC violated overtime and recordkeeping provisions of the Fair Labor Standards Act . The employer misclassified employees as independent contractors and subsequently paid them straight time for overtime, without regard to the number of hours they actually worked. Overtime violations resulted when these employees worked more than 40 hours in a workweek yet received no overtime pay. The employer also failed to display required posters informing employees of their rights under federal law.

Resolution: Star Finishes LLC paid $182,472 in overtime back wages to 82 current and former employees and agreed to comply with the FLSA in the future.

Quote: The misclassification of employees as independent contractors is an alarming trend, and a practice we see all too often in the construction industry said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “Misclassified workers are denied fair wages and access to critical benefits and protections that come with their rightful status as employees. Companies that violate the law in these cases also gain an unfair economic advantage over employers who play by the rules.”

Background: Established in 2008, Star Finishes is a commercial painting company in Austin. The company employs approximately 30 employees.

Information: For more information about federal wage laws, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243) or its Austin District Office at 512-236-2560. Information is also available at http://www.dol.gov/whd/.

Employer name: Gulf Coast L&P Inc., doing business as Rent-n-Roll

Investigation site: 1059 North Eastern Blvd.
Montgomery, Alabama 36117

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division’s Birmingham District Office determined that Rent-n-Roll, a tire and wheel retailer, violated the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act.

Investigators found that the employer reduced the number of hours worked that employees recorded on their timesheets. This practice resulted in Rent-n-Roll failing to pay at least the legally required federal minimum wage for all the hours some employees worked and in overtime violations when employees worked more than 40 hours in a work week yet were not paid for some of those hours. The company also violated recordkeeping requirements when their altered time records failed to reflect accurately the hours employees had worked.

Resolution: Rent-n-Roll will comply with the FLSA and pay 14 employees $13,583 in back wages plus an additional equal amount in liquidated damages, totaling $27,166.

Quote: “The U.S. Department of Labor is committed to ensuring all workers receive the wages they have rightfully earned,” said Kenneth Stripling, director of the Wage and Hour division’s Birmingham district office. “The back wages and damages paid in this case should remind all employers to ensure that they are paying their workers according to the law. We encourage employees who believe they are not being paid properly, or employers with questions about how to comply with the law to contact us for compliance assistance.”

Background: Based in Moss Point, Mississippi, the company sells and rents custom wheels and tires. The retailer has stores in Alabama, Louisiana, Florida and Tennessee. 

Information: For more information about federal wage laws administered by the Wage and Hour Division, call the agency's toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

Employer name: Tifton Peanut Co. Inc. #2

Investigation site: 225 Windy Hill Road
Tifton, Georgia 31794

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division’s Atlanta District Office, found that Tifton Peanut Co. #2 violated the overtime and recordkeeping provisions of the Fair Labor Standards Act.

Investigators found the peanut processing company paid 46 employees straight time for all the hours that they worked, when the FLSA requires overtime payment at time-and-one-half their regular rates of pay for all hours worked beyond 40 in a work week. During the employer’s busy season, employees who typically worked at the firm’s primary location also performed work at a secondary location. Tifton Peanut failed to include any hours employees worked at the second work site when calculating overtime wages. The employer also failed to maintain required time and payroll records.

Resolution: The employer will comply with FLSA and pay 46 employees $55,323 in back wages.

Quote: “The Wage and Hour Division is committed to ensuring that all employees receive the proper wages for all the hours they have worked,” said Eric Williams, the Wage and Hour Division’s district director in Atlanta. “The outcome of this investigation serves as a reminder to all employers to review their pay practices to confirm that workers are being paid as the law prescribes, and that we will continue to work to level the playing field for employers who play by the rules.”

Background: The peanut company operates two facilities in Tifton. Plant #1 is a shelling facility and plant #2 specializes in cleaning, drying and grading the peanuts.

Information: For more information about federal wage laws administered by the Wage and Hour Division, call the agency's toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

Employer name: All Native Services Co.

Investigation site: 375 Perry St.
Robins Air Force Base, Georgia 31096

Investigation findings: Investigators with the U.S. Department of Labor’s Wage and Hour Division, Atlanta District Office, found that All Native Services violated the McNamara-O’Hara Service Contract Act. The employer failed to pay the correct prevailing wage rates as required for technical writers, drafters/computer aided design operators and production control clerks employed on a contract at Robins AFB to perform technical data support services such as editorial support and publication editing.

Resolution: All Native Services has signed an agreement confirming its commitment to comply with the SCA and has paid 64 workers $507,610 in prevailing wages due.

Quote: “When an employer receives federal tax dollars to provide services to the government, they must comply with all applicable laws and ensure that employees are paid the legally required prevailing wages their contract requires,” said Eric Williams, the Wage and Hour Division’s district director in Atlanta. “All Native Services denied its workers their hard-earned wages and gained an unfair advantage over other contractors. We will continue our vigorous enforcement of the law to ensure that taxpayer-funded projects such as this one deliver a fair day’s pay for a fair day’s work, and maintain a level playing field for all contractors.”

Background: All Native Services is a subsidiary of Ho-Chunk Inc., a tribal development corporation owned by the Winnebago Tribe of Nebraska. Ho-Chunk Inc. operates 34 subsidiaries and employs more than 1,000 workers spanning more than 16 states and eight foreign countries. Other subsidiary operations include information technology, construction, government contracting, green energy, retail, wholesale distribution, marketing and transportation.

For more information about federal wage laws administered by the Wage and Hour Division, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

Date of action:  December 29, 2016

Type of action:  McNamara-O’Hara Service Contract Act Debarment Action

Names of respondents:  Restaurant Associates LLC, Restaurant Associates Inc., and Dick Cattani
132 West 31^st Street, Suite 601, New York, NY 10001

Background:  In July 2016, federal contractors Restaurant Associates, LLC., Restaurant Associates, Inc., and their subcontractor, Personnel Plus, agreed to pay back wages in the amount of $1,008,302 to 674 workers after the department’s Wage and Hour Division found the contractors violated the McNamara-O’Hara Service Contract Act by paying workers less than the wages required under the Act and failing to pay for all hours worked. The workers prepared and served meals for Capitol Hill lawmakers and their staffs in the U.S. Senate cafeteria. In September 2016, the contractors agreed to pay an additional $12,443 in back wages the division found due to four employees.

As a result of these violations of the Act, the department is initiating debarment proceedings to prevent Restaurant Associates LLC, Restaurant Associates Inc., and their principal officer, Dick Cattani, from serving as federal contractors. If debarred, the contractors would be placed on a list of ineligible government contract bidders for a three-year period.

Quote:  “Doing business with the federal government is a privilege and not a right,” said Oscar L. Hampton III, regional solicitor in Philadelphia. “Federal contractors should conduct their business in accordance with the highest standards and comply with the law by paying their workers the wages to which they are legally entitled. The complaint underscores those principles, and was filed to ensure a fair and level competitive playing field for all federal contractors and a fair day’s pay for a fair day’s work for all those who perform work pursuant to federal contracts.”

Court: U.S. Department of Labor Office of Administrative Law Judges

PASSAIC, N.J. – Fifty-five low-wage production workers who spend long work days sewing and loading mattresses at a Passaic mattress refurbishment company will soon receive their share of $292,998 in back wages and liquidated damages after the company entered into a consent judgment with the U.S. Department of Labor.

The agreement resolves the department’s Wage and Hour Division investigation of Citi Mattress Inc., which found the company violated the Fair Labor Standards Act by not paying the workers the proper overtime pay when they worked in excess of 40 hours in a workweek.

“The outcome in this case demonstrates our commitment to protecting the nation’s vulnerable, low-wage workers from exploitation,” said John Warner, district director for the department’s Wage and Hour Division in Northern New Jersey. “This agreement guarantees that the workers will be compensated properly for all of the hours they worked and provides added safeguards to protect employees in the future.”

In addition to paying the back wages and damages, the judgment requires the company to take the following measures to ensure future compliance with the FLSA:

• Use a time clock or other automated timekeeping system.
• Permanently display the poster “Employee Rights Under the Fair Labor Standards Act” in English and Spanish.
• Provide information about the FLSA to current and new employees in English and Spanish.
• Maintain proper time records for all employees.
• Provide non-exempt employees with a statement reflecting the hours worked for each day in the workweek and total hours each workweek.

“Employers have a legal responsibility to pay employees the proper wages,” said Jeffrey S. Rogoff, the department’s regional solicitor in New York. “This action underscores how aggressively we plan to enforce the law when employers fall short of that responsibility.”

The division’s Northern New Jersey office conducted the investigation. Daniel Hennefeld and Molly Biklen in the department’s New York regional solicitors’ office litigated the case.

The FLSA requires that covered, nonexempt employees be paid at least the minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records. Employers who violate the law are liable to employees for their back wages and an equal amount in liquidated damages. Both back wages and liquidated damages are paid directly to the affected employees.

For more information about federal wage laws, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/