Date of Action: Nov. 22, 2016

Type of Action: Lawsuit settlement and entry of judgment and injunction

Name of Defendant: Han Nara Enterprises L.P.
Lubbock, Texas

Findings: The U.S.  Department of Labor and Han Nara Enterprises L.P. have resolved a lawsuit filed Nov. 8, 2016 with a consent judgment and injunction entered by the court on Nov. 22, 2016. The judgment’s entry and injunction requires Han Nara – which does business as Ashley Furniture Homestore with seven retail outlets in New Mexico and Texas – to comply with the Fair Labor Standards Act’s minimum wage, overtime and record-keeping requirements and pay a total of $161,221 in back wages and liquidated damages to pay more than 500 employees. The company will also pay $55,000 in civil money penalties for committing willful and repeat violations. Han Nara has also agreed to five years of semi-annual audits by an independent third-party auditor, to ensure its ongoing compliance.

The department’s Wage and Hour Division investigated Han Nara four times in the past nine years, each time finding that the employer failed to pay employees properly. In the most recent investigation, investigators found that the company misapplied an exemption from the FLSA’s overtime requirements intended for commissioned sales employees, and altered time cards to reduce employees’ hours and pay. Han Nara attempted to use these practices to avoid paying its employees overtime.

Quote: “This is not the first time this Ashley Furniture store operator has violated the law,” said Betty R. Campbell, regional administrator for the Wage and Hour Division in the Southwest. “This settlement ensures that these workers will receive the wages they have rightfully earned.  Employers should take note - the costs associated with choosing to break the law extend beyond court costs to liquidated damages and civil money penalties. The resolution of this case illustrates the Wage and Hour Division’s commitment to protecting low wage workers, and leveling the playing field for law-abiding employers.”

Additional Information: The division continues to conduct investigations focusing on low-wage industries and recidivist employers. For more information about the  overtime exemption for commissioned retail workers or other information about compliance with the FLSA, visit www.dol.gov/whd/, or call 866-4US-WAGE.

Court: U.S. District Court for the Northern District of Texas.

Docket Number: 5:16-CV-256-C

Employer name: Environmental Painting Alternatives Inc.     

Investigation site: 1130 S. Rio Grande Ave.
Orlando, Florida 32805        

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division, Jacksonville District Office, found that Environmental Painting Alternatives – a commercial and residential painting and pressure-washing company – violated the overtime and recordkeeping provisions of the Fair Labor Standards Act.

The investigation revealed that Environmental Painting Alternatives jointly employed the workers in question with Caceres Custom Services LLC, which provided the contractor with most of its painters on an ongoing basis. As a result, both employers could be held liable for the violations disclosed. The employers misclassified workers who were, in fact, employees as independent contractors. This practice led to overtime violations when the employers paid only straight time rates to employees who worked more than 40 hours in a work week.

The employers also failed to maintain legally required time and payroll records, and failed to have a Family Medical Leave Act policy in place or to display the required poster in the workplace.

Resolution: Environmental Painting Alternatives Inc. will pay 19 employees $21,423 in unpaid overtime wages.

Quote: “The workers in this case fell victim to an all-too-common scenario – employers misclassifying employees as independent contractors,” said Daniel White, district director for the Wage and Hour Division in Jacksonville. “We are committed to routing out and eliminating this practice, in which workers are typically denied overtime, unemployment insurance, workers compensation and a host of other benefits that come with their rightful status as employees. Contractors who play by the rules must not find themselves at a competitive disadvantage to those who attempt to skirt the law for their own financial gain.”

Background: Environmental Painting Alternatives provided painting services to facilities in Orlando, Kissimmee and Miami including Walt Disney World’s Magic Kingdom, Fort Wilderness, Universal Studios, Marriott Hotel locations and the Hard Rock Stadium, formerly known as Miami Dolphin’s Stadium.

Information: The division has agreements with 35 states, including Florida, to combat misclassification of employees as independent contractors to ensure workers’ get the wages, benefits and protections to which they are entitled. The violations in this case are typical of those referred to other agencies, including the IRS, and the State of Florida Department of Revenue under this agreement.

More information regarding the Department of Labor’s initiative to combat the misclassification of employees as independent contractors can be found at http://www.dol.gov/whd/workers/Misclassification/index.htm. The FLSA requires that covered, nonexempt employees be paid for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week. Employers are prohibited from retaliating against workers who exercise their rights under the law.

For more information about the FLSA and wage laws or to file a complaint, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243); the Jacksonville District Office at 904-359-9292 or visit http://www.dol.gov/whd/.

Date of Action: Nov. 15, 2016

Type of Action: Consent judgment

Name of Defendants: Puerto Rico Police Department
Commonwealth of Puerto Rico

Background: An investigation by the U.S. Department of Labor’s Wage and Hour Division found that, between June 2010 and August 2014, the commonwealth’s police department willfully committed a number of violations of the Fair Labor Standards Act, most significantly regarding the failure to pay overtime properly.

The department requested on Oct. 19, 2016, that a federal judge approve a consent judgment requiring the police department to pay $8,732,386 in back wages and interest to 2,642 current and former police officers who did not receive all their overtime wages required under the FLSA.

Resolution: U.S. District Judge Gustavo A. Gelpí approved the consent judgement on Nov. 15, 2016. It requires the police department and the Commonwealth of Puerto Rico to pay the back wages and take additional corrective actions to pay employees properly, provide FLSA training, implement electronic recordkeeping and payroll systems and provide annual reports to the division. Details can be found in the approved consent judgment.

Quote: “This judgment ensures that that these public safety workers will be compensated properly for their important work, and that reforms are put into place to prevent such violations from occurring in the future,” said Jeffrey S. Rogoff, the department’s regional solicitor in New York, whose office litigated the case for the division.

Court: U.S. District Court for the District of Puerto Rico.
Civil Action Number:  3:16-cv-02849-GAG

Read this news release in Spanish.

NEW YORK – Sixty-three workers employed on the federally funded reconstruction of Chambers Street between Broadway and West St. in Lower Manhattan will receive a total of $1,190,861 in back wages following an investigation and litigation by the U.S. Department of Labor, in keeping with a consent order  approved by the department’s Office of Administrative Law Judges.

The department’s Wage and Hour Division found that between August 2010 and September 2013, flagpersons employed by Judlau Contracting Inc., a College Point-based prime contractor, and Network of Patrols Inc., their Queens-based first-tier subcontractor, were paid between $12 and $19.88 per hour instead of the prevailing wage rate and fringe benefits of $39.69 per hour required by the Davis-Bacon and Related Acts.

The investigation also found workers did not receive all the overtime they were due under the Contract Work Hours and Safety Standards Act when they worked more than 40 hours in a week. The department’s Office of the Solicitor filed an administrative proceeding in February 2016 against Judlau and Network.  Under the order, 43 Judlau employees will receive $1,078,885 in unpaid wages, and 21 Network employees will receive $111,976 in unpaid wages. One worker was employed by both companies.

“Taxpayers, who ultimately funded this project, have a right to expect that federal contractors understand their obligations and comply with the law,” said Wage and Hour Division Regional Administrator Mark Watson. “When Judlau and Network, or any other employer, fail to pay their employees their legally required wages they get an unfair advantage over employers who obey the law.”

“When employers do not pay workers their rightful wages, the U.S. Department of Labor will pursue appropriate legal remedies on the workers’ behalf,” said Regional Solicitor of Labor Jeffrey Rogoff. “We are committed to enforcing these laws to protect both employers and employees. We will continue to use all of the enforcement and legal tools we have to ensure that taxpayer dollars used to fund such contracts are properly spent.”

DBRA require all contractors and subcontractors performing work on federal and certain federally funded projects to pay their laborers and mechanics the proper prevailing wage rates and fringe benefits, as determined by the secretary of labor. The CWHSSA requires contractors and subcontractors on federal and federally assisted construction contracts over $100,000 to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rate of pay for all hours worked over 40 in a workweek.

The division’s New York City District Office conducted the investigation, while attorneys from the department’s Office of the Regional Solicitor in New York litigated the case for the division.

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.

U.S. Department of Labor, Office of Administrative Law Judges
In the Matter of:
Judlau Contracting Inc., Prime Contractor
Network of Patrols Inc., First-Tier Subcontractor
Case Number: 2016-DBA-00010

Employer name: Windy City Doc Holding LLC, doing business as Metro Diner

Investigation site: 1534 North 3^rd St.
Jacksonville, Florida 32250

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division’s Jacksonville District Office found that Windy City Doc Holding LLC, doing business as Metro Diner, violated minimum wage and overtime provisions of the Fair Labor Standards Act.

Specifically, the employer made illegal deductions from workers’ pay when it charged servers for their uniforms – that resulted in them earning less than the legally required federal minimum wage of $7.25 per hour in the weeks that they paid for those items. The employer’s practice of sharing the tips of tipped employees with non-tipped workers, such as dishwashers, also contributed to the minimum wage violations for affected servers.

The employer also calculated overtime incorrectly when it based servers’ overtime rates on time and a half of their direct cash wages, rather than basing it on the full minimum wage, as required.

Resolution: The employer will comply with the FLSA and pay 59 employees $154,179 in back wages.

Quote: “Restaurant workers are among the most vulnerable that we see,” said Daniel White, district director for the Wage and Hour Division in Jacksonville. “Violations such as those found in this case are all too common.  When these workers aren’t paid every penny they have rightfully earned, it harms not just the workers, but their families, and their communities. We will continue our enforcement in this industry, along with our education and outreach activities, to ensure that workers are paid what they’ve earned, and to level the playing field for employers who play by the rules.”

Information: The Wage and Hour Division’s Fact Sheet on Tipped Employees provides more 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: Good Shepherd Home Inc., a residential care facility doing business as Good Shepherd Home, with locations in Shoreline, Washington

Sites:

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found that Good Shepherd Home violated the minimum wage and overtime provisions of the Fair Labor Standards Act.  Specifically, the employer paid employees flat daily rates without regard to the number of hours that they actually worked. That practice resulted in minimum wage violations when those amounts fell short of $7.25 per hour, and caused overtime violations when employees worked more than 40 hours in a week yet received no additional pay. Workers typically worked 12- to 24-hour shifts.  Investigators also found that this employer failed to keep accurate records of hours worked, in violation of the FLSA’s recordkeeping provisions.

Resolution: Good Shepherd Home will pay $259,030 in back wages plus an equal, additional amount in damages, totaling $518,060 to 39 underpaid caregivers.

Quote: “The dedicated caregivers at these adult family homes work long hours providing for the health and comfort of their elderly and disabled residents,” said Jeanette Aranda, district director for the Wage and Hour Division in Seattle. “Employers must pay their employees for all of the time they put in on the job- paying a day rate or a salary does not mean these facilities can ignore their legal obligation to pay minimum wage and overtime. As the resolution of this case illustrates, we will continue to use every enforcement tool available to ensure that such workers take home every penny that they rightfully earn.”  

Information: For more information about wages and residential care facilities, please consult the following fact sheet: https://www.dol.gov/whd/regs/compliance/whdfs33.htm

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/.

Read this news release in Tagalog

OAKDALE, Minn. – A Minnesota company that provided cable equipment recovery services to leading cable providers such as Comcast, Time Warner and Charter Communications, will pay $350,000 to drivers and market contractors misclassified as independent contractors to resolve a U.S. Department of Labor lawsuit.  

An investigation by the department’s Wage and Hour Division found Oakdale-based, Cable Equipment Services Inc and one of its owners, Marilyn Appeldoorn, violated overtime, minimum wage, and recordkeeping requirements of the Fair Labor Standards Act when they failed to pay 41 market contractors and drivers overtime and minimum wage after treating them as independent contractors instead of as employees. 

The Division determined that CES misclassified its workers as independent contractors when, in fact, they met the definition of employees and were subject to the FLSA’s overtime and minimum wage protections. The defendants agreed to pay $350,000 in back wages and liquidated damages to resolve the department’s legal action on behalf of the workers.

“Far too often, employers misclassify workers as independent contractors when the law defines them as employees. In this case, Cable Equipment Services denied workers overtime, minimum wage, and access to employee benefits, unemployment insurance and the payment of federal and state taxes on their behalf,” said David King, district director for the Wage and Hour Division in Minneapolis. “In these instances, not just the workers, but the whole economy loses. We are committed to rooting out misclassification and, as this case shows, will continue to use every enforcement tool available to us to achieve that goal.”

The investigation revealed that CES used employees it called “market contractors” to distribute its work orders for cable equipment collection to drivers, collect the cable equipment from drivers, prepare invoices and return the collected cable equipment to the cable company clients. In turn, drivers collected equipment from cable subscribers for CES on behalf of the cable provider clients. CES paid the misclassified workers, in both positions, on a per piece basis for retrieving equipment and failed to pay an overtime premium regardless of how many hours the misclassified employees worked. 

CES also failed to pay some misclassified employees the minimum wage as required by the FLSA when their total compensation fell below $7.25 per hour for all hours worked. The company additionally violated the FLSA’s recordkeeping requirements when it failed to maintain time records for these employees.

The Oakdale-based company ceased operations in November 2015.

A misclassified employee – with independent contractor or other non-employee status – loses minimum wage, overtime, workers compensation, unemployment insurance and other workplace protections. Employers often misclassify workers to reduce labor costs and avoid employment taxes. By not complying with the law, these employers attempt to gain an unfair advantage over competitors who obey the law, pay fair wages and required taxes, and ensure other protections for their employees. These illegal practices lower standards for all workers, especially in highly competitive markets and industries where employers try to reduce overhead, often at the expense of their workers.

The division has aggressively expanded its efforts to combat employee misclassification in sectors where workers are especially vulnerable and violations are rampant. To assist in combating the problem, the department has entered into agreements with more than 30 states to share information and to coordinate enforcement efforts. The department also engages in a robust education and outreach, and works with stakeholders to change behavior at the industry level.  

For more information about the FLSA, visit https://www.dol.gov/whd or call the division’s toll-free helpline at 866-4US-WAGE (487-9243).

Docket Number: 0:15-cv-00416, Perez v. Cable Equipment Services Inc., and Marilyn Appeldoorn

Employer name: Ravago Americas LLC

Investigation site: 1900 Summit Blvd., #900
Orlando, Florida 32810

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division, Jacksonville District Office, found the employer violated overtime and recordkeeping provisions of the Fair Labor Standards Act.

The employer paid workers fixed salaries, based upon a 40 hour workweek, without regard to how many hours they actually worked. When employees performed work before their shifts, after their shifts, during their meal breaks, and/or at home, those hours were neither recorded nor paid for. This practice created an overtime violation when the unpaid time pushed workers’ totals beyond 40 hours in a workweek, and no overtime premium was paid. The company also failed to maintain required time and payroll records.

Resolution: Ravago has signed an agreement with the division to:

• Pay $424,537 in back wages to 195 employees and comply with the FLSA.
• Install an accurate time-keeping system to capture daily start and end times of employees.
• Include an accurate record of hours worked on pay stubs for all nonexempt personnel.
• Perform enterprise-wide training with all managers and employees on proper clock in/out procedures on installed time-keeping system, employee rights regarding compensable and non-compensable time and proper procedures to correct inaccurate payroll caused by a time-keeping error.

Quote: “Simply paying an employee a salary does not necessarily mean the employee is not entitled to overtime,” said Daniel White, the Wage and Hour Division’s district director in Jacksonville. “Restoring these wages, and getting this company to pay in compliance with the law going forward, will make a meaningful difference in the quality of life for these workers and their families. Other businesses, who may be paying in the same manner, should take note. Workers who are being paid straight time for overtime should give us a call.”

Background: Based in Orlando, Ravago Americas is a plastic recycling compounding and distribution company.

Information: The FLSA provides an exemption from both minimum wage and overtime pay requirements for individuals employed in bona fide executive, administrative, professional and outside sales positions, as well as certain computer employees. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. The department recently issued a Final Rule that will update that salary level to $913 per week as of Dec. 1, 2016.

For more information about the FLSA and wage laws or to file a complaint, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243); the Jacksonville District Office at 904-359-9292 or visit http://www.dol.gov/whd /.

Type of Action: Fair Labor Standards Act consent judgment

Names of Defendants: T. R. Timber Company
Tony M. Rosenbrugh

Findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found that T.R. Timber Company and its majority owner, Tony M. Rosenbrugh, failed to pay truck drivers and hourly employees overtime for hours worked beyond 40 in a work week in violation of the FLSA.

Investigators determined that the company paid truck drivers on both an hourly and a piece-rate (per load) basis, and failed to calculate each driver’s rate for overtime properly. The employer paid piece-rated drivers without regard to how many hours they actually worked, as were other hourly employees who were paid based on a “fixed schedule,” despite the fact that they worked extra hours. Additionally, the company issued separate checks artificially labeled as “mileage reimbursement” to compensate some drivers for overtime hours, but at straight time rates. The division concluded that the violations were willful.

The West Branch, Michigan, logging and timber company also failed to maintain accurate payroll records, as required by law. In 2006, a division investigation disclosed overtime violations when the employer was found to pay straight time for overtime hours.

Resolution: Under terms of a consent judgment, the defendant employers have paid a total of $193,260, including $96,630 in back wages and an equal amount in liquidated damages to 15 former and current employees. The defendants further agreed to provide their employees a fact sheet on the FLSA’s overtime pay requirements and to conduct a quarterly review of their pay practices to ensure ongoing compliance with the FLSA.

Quote: “T.R. Timber’s attempt to continue to circumvent wage requirements, including their practice of issuing separate checks under miscellaneous payment categories is unacceptable,” said Timolin Mitchell, district director for the Wage and Hour Division in Detroit. “When employees such as those in this case are denied their overtime pay, it hurts not only the workers and their families, it also impacts their communities. The resolution of this case demonstrates our commitment to ensuring that workers take home every penny they have rightfully earned, and to leveling the playing field for employers who play by the rules.”

Information: 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, including commissions, bonuses and incentive pay for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records. The FLSA provides that employers who violate the law are liable to employees for their back wages and an equal amount in liquidated damages.

The FLSA provides an exemption from overtime for many individuals employed as drivers, drivers’ helpers, loaders, or mechanics. That exemption did not apply to the drivers in this investigation, who drove only locally.

Court: U.S. District Court for the District, Eastern District of Michigan

Docket Number: 1:16-cv-115, Perez v. T. R. Timber Company, Tony M. Rosenbrugh

Date of Action: Oct. 27, 2016

Type of Action: Lawsuit

Name of Defendants: Five Oaks Achievement Center LLC
Whispering Hills Achievement Center LLC
North Fork Educational Center LLC

Allegation: The U.S. Department of Labor has filed a lawsuit against Five Oaks Achievement Center LLC, Whispering Hills Achievement Center LLC and North Fork Educational Center LLC, all of which operate under common control, alleging the employer violated the Fair Labor Standards Act. Specifically, the complaint alleges that the Houston-area employer made illegal deductions from employees’ pay for sleep time after failing to ensure that they actually received the amount of uninterrupted sleep time required to allow the deduction, and failed to provide adequate sleeping facilities. The allegations follow an investigation by the department’s Wage and Hour Division.

Quote: “These workers who assist troubled youth do important and often challenging work,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “This employer, like all employers, has a duty to know the law and abide by it. If employees perform work during their rest or sleep periods, the employer must pay them for that time. This lawsuit demonstrates our commitment to ensuring that when people work, they get paid, and that hard working employees take home every penny they have rightfully earned.”

Resolution: The department seeks $1,132,630 in back wages and an equal amount in liquidated damages for uncompensated sleeping hours for 68 direct care workers and an injunction for future compliance with the FLSA.

Background: Based in Houston, Five Oaks Achievement Center LLC operates for-profit residential group homes for troubled youth under the age of 18. The residents are sent to the defendants’ group homes either by court order or by their parents. Defendants employ direct care staff that directly supervise and care for the residents at each of the group homes.

Court: U.S. District Court for the Southern District of Texas, Houston Division

Docket Number: 4:16-cv-3162

Editor’s Note: The initial release incorrectly identified the docket number. The correct docket number is 4:16-cv-3162.