BUFFALO, N.Y. – The owner of three Buffalo-area gas stations has paid a total of $84,000 in back wages and damages to 41 employees after an investigation by the Buffalo area office of U.S. Department of Labor’s Wage and Hour Division.

Lakhwinder Gill – the owner of the Angola Food Mart Inc. (Angola), LHP Food Mart Inc. (Buffalo) and Lake Shore Mini Mart, Inc. (Hamburg) gas stations – will also pay $1,000 in civil monetary penalties.

Investigators found that Gill violated the minimum wage, overtime and recordkeeping requirements of the Fair Labor Standards Act. Specifically, Gill:

• Failed to pay some employees overtime when they worked more than 40 hours in a work week, including one who regularly worked more than 70 hours a week.
• Failed to pay some employees for all the hours that they worked, including time spent in training and in performing work before and after their scheduled shifts. Required employees to pay for cash register shortages and damaged or missing merchandise, such as stolen gas, errors in printing lottery tickets, and missing merchandise. Making deductions from wages for these items resulted in minimum wage and overtime violations.
• Failed to combine the hours worked by one employee at two locations of the business when determining when overtime was due.
• Falsified time records to create the appearance that employees did not work overtime even though some employees regularly worked more than 40 hours per week.

See complaint here.

“Too often we see employers paying straight time for overtime in cash off the books in this industry,” said Michael Fitzgerald, assistant district director of the Wage and Hour Division’s Buffalo Area Office. “This investigation and its outcome should send a clear message: We will continue to use every enforcement tool available to hold employers accountable, to level the playing field for those who play by the rules, and to ensure that workers are paid what they have rightfully earned.”

The consent judgment includes the following gas stations:

• Angola Food Mart Inc., doing business as Mobil, at 8445 Southwestern Boulevard, will pay 32 employees $26,671 in back wages and an equal amount in liquidated damages.
• LHP Food Mart Inc., doing business as Valero, at 3932 South Park Ave., will pay eight employees $15,247 in back wages and an equal amount in liquidated damages.
• Lake Shore Mini Mart, Inc., doing business as Mobil, at 4878 Lakeshore Road, will pay one employee $81.00 in back wages and an equal amount in liquidated damages.

The Judgment also requires the employer to verbally inform all of their employees in English, and in any other language spoken by the workers, of their rights under the FLSA, the terms of the judgment, and their rights to cooperate with an investigation without fear of retaliation. 

Senior Trial Attorney Kathryn L. Stewart provided legal services in support of this enforcement action for the Department of Labor’s New York Regional Office of the Solicitor. The case was filed with U.S. District Court for the Western District of New York.

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

Employer: Six gas stations/convenience stores, all under common ownership, doing business as Arco AM/PM in the Sacramento, California area.

Sites: Lodi Oil Inc., 4931 N. Flag City Blvd, Lodi
Kamboj Oil Inc., 45 15^th St., West Sacramento
Wraich Petroleum Corp., 3921 Watt Avenue, Sacramento
Broadway Petroleum Inc., 2100 Broadway, Sacramento
Mehroke LLC, 902 Newville Road, Orlanda
Sacramento Petroleum Inc., 4745 Watt Avenue North Highlands

Investigation findings: Investigators with the U.S. Department of Labor’s Wage and Hour Division found the employer violated the overtime pay requirement of the Fair Labor Standards Act by paying workers straight time rates for overtime hours. The Arco AM/PM franchisee provided investigators with falsified payroll records to create the appearance of compliance. In addition to paying straight time for overtime hours, the employer also failed to pay workers for travel time between locations when they worked at multiple sites, resulting in unpaid hours and further overtime violations.

Resolution: The employer will pay $66,075 in overtime back wages found due plus an equal, additional amount in damages, totaling $132,150 to 47 employees.

Quote: “While gas station attendants are among our nation’s lowest-paid workers, it does not mean they do not have a voice,” said Cesar Avila, assistant district director of the department’s Wage and Hour Division in Sacramento. “Our investigation shows we remain committed to ensuring that workers receive a fair day’s pay for a fair day’s work, and that employers who obey the law do not find themselves at an economic disadvantage to those who do not.”

Information: 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, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. The act also provides that employers who violate the law are liable to employees for back wages and an equal amount in liquidated damages.

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/.

Type of Action: Fair Labor Standards Act lawsuit filing

Defendant(s): Rinky Sharma
Bobby Singh
SkyExpress Travel Plaza Inc., doing business as Plaza 30
Sky Petroleum Inc., doing business as Govertown Travel Plaza and Michigan City Grocery
Aman Group LLC, dba Marathon Stop and Shop

Complaint: The U.S. Department of Labor has filed a lawsuit in federal court to recover an estimated $23,702 – representing $11,851 in unpaid overtime wages and an equal amount in liquidated damages for at least 13 current and former employees of four travel plazas and gas stations in Northern Indiana. The suit also names Rinky Sharma and Bobby Singh, the co-owners of the various companies operating the travel plazas and gas stations.

An investigation by the department’s Wage and Hour Division found the defendants violated the FLSA by:

• Failing to pay overtime at time and one half for all hours employees worked beyond 40 in a workweek. Investigators determined the employer paid one worker a set salary per week, regardless of the numbers of hours worked. The employee did not meet the criteria to be considered exempt from overtime requirements.
• Paying servers overtime at one and one-half times their direct cash wages of $2.13 per hour rather than the legally-required rate of one and one-half times the full minimum wage of $7.25 per hour.
• Failing to combine the hours of employees who worked as both a server and cashier in the same workweek when determining if overtime was due, instead paying for each task separately, at straight time.  
• Failing to maintain accurate payroll records including hours worked and rates of pay.

Quote: “These clerks, servers and cashiers worked long, hard hours, and deserve to be paid every penny they have rightfully earned,” said Patricia Lewis, district director for the Wage and Hour Division in Indianapolis. “This lawsuit demonstrates the division’s commitment to using every enforcement tool available to us, including litigation, to hold employers accountable, and to ensure that workers’ wages are protected.  We encourage anyone being paid less than they have earned to notify the Wage and Hour Division.”

Information: The FLSA requires that employers pay covered, nonexempt employees at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular hourly rates for hours worked beyond 40 per week. As a general rule, the FLSA provides that employers who violate the law are liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees. Additionally, the law requires employers to maintain accurate time and payroll records and prohibits retaliation against employees who exercise their rights under the law.

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 also is available at www.dol.gov/whd/fmla/ .

Court: U.S. District Court for the Northern District of Indiana, South Bend Division 3:16-cv-00834

SALT LAKE CITY – A federal judge has ordered Brian Jessop and Paragon Contractors Corp., to make an initial payment of $200,000 to compensate hundreds of children who were employed illegally and not paid for their labor on a pecan ranch between 2008-2013. Jessop and Paragon coordinated with the Fundamentalist Church of Latter Day Saints to use children and others in the church for field work.

A multi-year investigation by the U.S. Department of Labor’s Wage and Hour Division revealed that the employers used underage workers illegally to harvest pecans by hand in southern Utah.

On Dec. 6, 2016, U.S. District Court Judge Tena Campbell ordered the $200,000 payment to a fund to pay back wages and that a special master be appointed to conduct unannounced work site investigations over a five-year period to ensure that the court’s order is followed. The court also requires that Jessop and Paragon notify the special master and the Wage and Hour Division before beginning work at any location, provide records on employees and allow investigators unfettered access to job sites. In June, the court found the employers in contempt of a 2007 order forbidding the employer’s illegal use of child labor.

“We are committed to utilizing every tool at our disposal to stop oppressive child labor, secure payment of workers’ lawful wages and compel employers to obey the law,” said Wage and Hour Division Administrator Dr. David Weil. “The employers in this case have long demonstrated a willful disregard for the welfare of minors, refusing to compensate them and adult workers who have toiled in their fields. We will uphold the prohibition against the illegal use of child labor. We will also ensure that the promise of a fair day’s pay for a fair day’s work extends to workers in every sector, be it in construction or in the pecan fields.”

In its investigation, the division found leaders of the FLDS-directed schools in Hildale and nearby Colorado City, Arizona, be closed to allow children and adult laborers to harvest pecans. During the 2012-2013 harvest, investigators found church leaders put hundreds of children under the age of 13 to work in the pecan fields. Witnesses testified that up to 4,000 children and adults in the church worked for no compensation.

In September 2015, the department initiated a contempt of court action against Jessop and Paragon for violating the 2007 court order. In a separate suit, the department continues to seek back wages, damages and injunctive relief against additional defendants, including the FLDS church, Lyle Jeffs and Dale Barlow.

A separate administrative action seeking $1.9 million in civil penalties from Jessop, Paragon and Barlow remains unresolved. The penalties are associated with the child labor violations from the 2012-2013 pecan harvest. Penalty assessments against the FLDS church and Jeffs for the same violations have already become final orders of the department, as those parties did not contest the penalties when they were assessed against them.

“For years, we have successfully litigated numerous enforcement actions to investigate and put an end to the illegal use of child labor by Paragon and the FLDS church, and to ensure that all workers are compensated in accordance with the law,” said Associate Regional Solicitor John Rainwater in the department’s Office of the Solicitor in Denver. “The employers have refused repeatedly to cooperate and provide information in an effort to delay and thwart our efforts. This most recent court decision is but one more victory in our determined effort to uphold the rule of law and vital worker protections, particularly when the workers are children, who are among the most vulnerable.”

Workers or the parents of minor children employed in the pecan harvesting operations between 2008-2013 are eligible to submit a claim for back wage payments and are encouraged to contact the Wage and Hour Division office in Salt Lake City at (801) 524-5706 or (866) 487-9243 to make a claim.

Workers and employers can get more information about federal wage laws administered by the division by calling the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Workers can also file complaints confidentially. More information is also available online at http://www.dol.gov/whd/.

SALT LAKE CITY – A federal judge has ordered Brian Jessop and Paragon Contractors Corp., to make an initial payment of $200,000 to compensate hundreds of children who were employed illegally and not paid for their labor on a pecan ranch between 2008-2013. Jessop and Paragon coordinated with the Fundamentalist Church of Latter Day Saints to use children and others in the church for field work.

A multi-year investigation by the U.S. Department of Labor’s Wage and Hour Division revealed that the employers used underage workers illegally to harvest pecans by hand in southern Utah.

On Dec. 6, 2016, U.S. District Court Judge Tena Campbell ordered the $200,000 payment to a fund to pay back wages and that a special master be appointed to conduct unannounced work site investigations over a five-year period to ensure that the court’s order is followed. The court also requires that Jessop and Paragon notify the special master and the Wage and Hour Division before beginning work at any location, provide records on employees and allow investigators unfettered access to job sites. In June, the court found the employers in contempt of a 2007 order forbidding the employer’s illegal use of child labor.

“We are committed to utilizing every tool at our disposal to stop oppressive child labor, secure payment of workers’ lawful wages and compel employers to obey the law,” said Wage and Hour Division Administrator Dr. David Weil. “The employers in this case have long demonstrated a willful disregard for the welfare of minors, refusing to compensate them and adult workers who have toiled in their fields. We will uphold the prohibition against the illegal use of child labor. We will also ensure that the promise of a fair day’s pay for a fair day’s work extends to workers in every sector, be it in construction or in the pecan fields.”

In its investigation, the division found leaders of the FLDS-directed schools in Hildale and nearby Colorado City, Arizona, be closed to allow children and adult laborers to harvest pecans. During the 2012-2013 harvest, investigators found church leaders put hundreds of children under the age of 13 to work in the pecan fields. Witnesses testified that up to 4,000 children and adults in the church worked for no compensation.

In September 2015, the department initiated a contempt of court action against Jessop and Paragon for violating the 2007 court order. In a separate suit, the department continues to seek back wages, damages and injunctive relief against additional defendants, including the FLDS church, Lyle Jeffs and Dale Barlow.

A separate administrative action seeking $1.9 million in civil penalties from Jessop, Paragon and Barlow remains unresolved. The penalties are associated with the child labor violations from the 2012-2013 pecan harvest. Penalty assessments against the FLDS church and Jeffs for the same violations have already become final orders of the department, as those parties did not contest the penalties when they were assessed against them.

“For years, we have successfully litigated numerous enforcement actions to investigate and put an end to the illegal use of child labor by Paragon and the FLDS church, and to ensure that all workers are compensated in accordance with the law,” said Associate Regional Solicitor John Rainwater in the department’s Office of the Solicitor in Denver. “The employers have refused repeatedly to cooperate and provide information in an effort to delay and thwart our efforts. This most recent court decision is but one more victory in our determined effort to uphold the rule of law and vital worker protections, particularly when the workers are children, who are among the most vulnerable.”

Workers or the parents of minor children employed in the pecan harvesting operations between 2008-2013 are eligible to submit a claim for back wage payments and are encouraged to contact the Wage and Hour Division office in Salt Lake City at (801) 524-5706 or (866) 487-9243 to make a claim.

Workers and employers can get more information about federal wage laws administered by the division by calling the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Workers can also file complaints confidentially. More information is also available online at http://www.dol.gov/whd/.

NEW YORK – A Garden City restaurant and catering hall will pay a total of $285,800 in back wages and liquidated damages to 24 underpaid employees to resolve violations of the minimum wage, overtime and recordkeeping requirements of the Fair Labor Standards Act. The company will also pay $24,200 in civil money penalties to the U.S. Department of Labor and take corrective action to prevent future violations as part of a consent judgment filed with the U.S. District Court for the Eastern District of New York.

An investigation by the department’s Wage and Hour Division found that Knishka Restaurant Associates Inc., doing business as Akbar Restaurant & Caterer willfully failed to pay employees properly and maintain accurate records of wages and work hours between July 2012 and March 2016. Specific violations included:

• Paying kitchen workers, dishwashers, and banquet workers who sometimes worked as many as 60 hours per week a fixed weekly amount regardless of the numbers of hours they actually worked,denying them overtime when they worked more than 40 hours.
• Paying servers who sometimes worked as many as 70 hours per week less than the federal minimum wage of $7.25 per hour by failing to comply with the FLSA’s tip credit requirements.
• Keeping multiple, incomplete, and inaccurate payroll records and providing investigators with falsified records.
• Retaliating against an employee who refused to sign a false affidavit about defendants’ pay practices.

After withholding an employee’s paycheck because he refused to sign a false affidavit, the department obtained a temporary restraining order in July 2016, which enjoined the defendants from interrogating current and former employees about their communications with the government, and withholding wages from or terminating or threatening employees they believed cooperated with the division’s investigation. The court also ordered that the defendants permit department representatives to read a statement to the restaurant’s employees about their right to participate in the investigation.

“These employees work long hours at demanding jobs and deserve to be paid the wages they have rightfully earned. They also have the right to be free of intimidation by their employer,” said Irv Miljoner, director of the division’s Long Island District Office. “Employees have a legal right to participate in and cooperate with an investigation without fear of retaliation.”

“The Long Island restaurant industry should take note of the resolution of this case and the strong remedies obtained. Cheating workers of their wages not only harms them, it also puts at a competitive disadvantage those employers who obey the law in the first place. Intimidating or retaliating against employees is not only unacceptable behavior, it is illegal behavior. The department will not hesitate to pursue and secure appropriate and effective corrective action,” said Jeffrey S. Rogoff, the regional solicitor of labor in New York.

In addition to the payment of the back wages and liquidated damage, the consent judgment requires the defendants to use an automated timekeeping system for all of their employees, and post and provide employees with notices informing them of the resolution of the lawsuit and their FLSA rights in English, Spanish and Hindi.

Should the defendants fail to make payments in a timely manner, the court can appoint at the defendants’ expense a receiver with the authority to collect and liquidate the defendants’ assets and take other steps to carry out the terms of the judgment.

The division’s Long Island District Office conducted the investigation, and attorneys Lindsay Rothfeder and Amy Tai 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/.

# # #

Perez v. Knishka Restaurant Associates Inc. d.b.a. Akbar Restaurant & Caterer, and Meena Chopra
Civil Action Number: 2:15-cv-04494-LDH-ARL

Read this news release in Spanish.

Read this news release in Hindi.

Employer name: Los Arcos Inc., doing business as Los Arcos Mexican Restaurant

Investigation sites: 214 St. James Ave.
Goose Creek, South Carolina 29445

1136 Hungry Neck Blvd.
Mount Pleasant, South Carolina 29464

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division, Columbia District Office, found that Los Arcos Mexican Restaurant violated overtime, minimum wage and recordkeeping provisions of the Fair Labor Standards Act.

The investigations found the employer:

• Paid cooks and dishwashers fixed salaries without regard to the number of hours they actually worked. This resulted in overtime violations when these employees worked more than 40 hours in a week without additional overtime payment as well as minimum wage violations when they worked so many hours that their salaries failed to cover $7.25 per hour.
• Failed to pay hourly workers minimum wage and overtime for hours they worked beyond 40 in a workweek.
• Required wait staff to work only for tips, resulting in minimum wage and overtimes violations.
• Reduced workers’ pay below minimum wage by charging employees for mandatory uniforms.
• Failed to maintain required time and payroll records.

Resolution: On Nov. 3, 2016, the department reached a settlement agreement with Los Arcos’ owner, Alberto Reyes. Los Arcos Inc. and Reyes will pay a total of $459,130 to 28 employees, which includes $229,565 in back wages and an additional equal amount in liquidated damages for all affected employees who worked at either of the two restaurants from Oct. 5, 2013 to Oct. 10, 2015.

Quote: “The violations found in this case are all too common in the restaurant industry,” said Jamie Benefiel, director of the division’s Columbia office. “These workers deserve to take home every penny they legally earned, and employers who play by the rules deserve a level playing field.  The department will use every tool necessary to achieve compliance and to protect workers’ rights - including the assessment of liquidated damages, and taking legal action when necessary.”

Background: Under the FLSA, an employer of a tipped employee is only required to pay $2.13 an hour in direct wages if that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour. If an employee’s tips combined with the employer’s direct wages do not equal at least the minimum wage, the employer must make up the difference. Employers may create a tip-pooling or sharing arrangement among employees who customarily and regularly receive tips, but a valid tip pool may not include employees who do not customarily and regularly receive tips, such as managers, dishwashers, cooks, chefs and janitors. Finally, paycheck deductions for uniforms, patrons who do not pay for their orders, broken dishes or cash register shortages are illegal if they reduce an employee’s wages below the minimum wage.

Information: For more information about the FLSA, call the Wage and Hour Division’s Columbia office at 803-765-5981 or its toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd.

Date of Action: Nov. 17, 2016

Type of Action: Lawsuit

Name of Defendants:Tango Bakery Inc., doing business as Tango Bakery
Adrian Gordillo-Ross
Sergio Mendoza

Allegation: The U.S. Department of Labor has filed a lawsuit against Tango Bakery Inc. – doing business as Tango Bakery – and its two owners, Adrian Gordillo-Ross and Sergio Mendoza, after an investigation by the department’s Wage and Hour Division found that the employers failed to pay 20 current and former employees $75,218 in overtime pay in violation of the Fair Labor Standards Act.

Investigators from the division’s Dallas District Office found the Garland, Texas-based bakery failed to pay its bakers, baking helpers and front sales workers properly because they paid straight time for all hours worked and failed to pay overtime at time and one-half for hours worked over 40 in a work week. The company also failed to pay some employees for all of the hours they worked.  Additionally, on the occasion that the employer did pay overtime, they failed to include bonuses employees received for working late in the work day in the overtime rate payment made on those days. Investigators also determined the company failed to keep accurate time and pay records and falsified others, violating the FLSA’s recordkeeping requirements.

Quote: “Tango Bakery attempted to manipulate time and pay records to avoid paying employees what they had rightfully earned,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “Employees must be paid for every hour they work and employers must also maintain complete and accurate records. The division remains committed to ensuring that if you work, you get paid. As this lawsuit demonstrates, we will continue to use every tool available to us to make sure that happens.”

Resolution: The department seeks $150,437 in back wages and liquidated damages for workers, and an injunction against future violations of the FLSA by the employers. In addition, the department has filed an action with the Department of Labor’s Office of Administrative Law Judges seeking $7,700 in civil money penalties assessed against the employer and its two owners for willful violations of the Act.

Additional Information: Tango Bakery specializes in cakes and provides catering services. Tango Bakery also hosts various events, such as weddings and Quinceañeras, in a ballroom attached to the bakery.

Court: U.S. District Court for the Northern District of Texas, Dallas Division

Docket Number: 3:16-cv-03230-M

Read the News Brief in Spanish.

SCOTT, La. – Investigators have found more than $571,000 in back wages, liquidated damages and penalties resulting from labor violations at area Cajun food retailers just six months after the U.S. Labor Department’s Wage and Hour Division found violations at another local specialty meat processor.

The Best Stop Supermarket Inc., SHYY Inc. – doing business as Romero’s Grocery – and Don’s Specialty Meats Inc. violated the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act. Violations included:

• Failing to pay workers for all hours they worked, including 15 minutes spent before and after scheduled shifts counting cash drawers.
• Deducting wages from workers’ pay illegally for cash register shortages which effectively brought their wages below the required federal minimum wage.
• Paying straight time rates, in cash “off the books,” for overtime hours worked.

Romero’s Grocery disguised wage payments as “reimbursements” to employees to avoid paying overtime and provided  federal investigators with falsified time records to falsely show they had paid workers as required by federal law. Don’s Specialty Meats made illegal pre-employment arrangements with workers to only pay for a specified number of hours on payroll checks and to pay for the remainder of their hours in cash, all at the workers’ regular hourly rates, even if overtime was worked. Investigators determined that the violations committed by The Best Stop and Romero’s Grocery were willful, prompting them to extend the period of time covered by the investigation.

“When employers fail to pay wages as the law requires, they can expect to pay double what they should have paid in the first place,” said Troy Mouton, district director for the division in New Orleans. “The Wage and Hour division will continue to use enforcement tools such as liquidated damages and civil money penalties to send a clear message – it is unacceptable for employers, in this industry or in others, to profit at the expense of the workforce who deserve a fair day’s pay for a fair day’s work.”

The Best Stop Supermarket has paid $56,386 in back wages and liquidated damages to 36 workers. The employer was also assessed $10,819 in civil money penalties for willful violations.

Romero’s Grocery paid $35,053 in back wages and liquidated damages to 33 workers. The employer was also assessed $3,927 in civil money penalties for willful violations.

Don’s Specialty Meats will pay $480,313 in back wages and liquidated damages to 133 workers.

In addition to paying back wages, liquidated damages, and penalties, all three employers entered into enhanced compliance agreements with the department to resolve the investigations. They agreed to provide annual training for managers on complying with the FLSA, and to provide FLSA handy reference guides to employees at the time of hire, among other terms.

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, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers must maintain accurate time and payroll records. The act authorizes the division to assess civil money penalties for each repeated or willful violation of the minimum wage and overtime requirements of the act.

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/.

Employer:Stars Cleaning Inc., doing business as Stars Cleaning Service

Site:14320 SW Barlow Court
Beaverton, Oregon

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found that Stars Cleaning Service paid its janitorial employees a fixed daily rate without regard to the number of hours they actually worked, resulting in violations of the minimum wage and overtime provisions of the Fair Labor Standards Act. Investigators found that the employees worked more than 12 hours a day, six days a week, on average. The daily rates, when divided by the number of hours employees worked, yielded earnings that fell below the federal minimum wage of $7.25 per hour, and did not provide an overtime premium for hours worked beyond 40 in a week.

Once the investigation started, owner Estela Ramos began harassing and intimidating the workers with immigration-related threats, directing workers to falsify time records, threatening to reduce their hours or pay and offering cash to employees to remain silent about alleged violations.

The department secured an injunction to stop the threats and intimidation, and filed a complaint against Ramos and Stars Cleaning for the unpaid wages. Soon after, the company and its owner filed for bankruptcy.  Investigators later discovered that the day after the bankruptcy filing, the owner’s son –Vismark Ramos– incorporated a new company named White Star Cleaning Inc., which continued to operate the same cleaning business, at the same location, with the same employees, and servicing the same clients as Stars Cleaning. In response, the department amended its complaint and added White Star Cleaning and Vismark Ramos as ‘successors in interest’ to Stars Cleaning. This action held White Star and Vismark Ramos liable for the FLSA violations and unpaid wages owed to workers by the previous company.

Resolution: In a consent judgment filed in the U.S. District Court for the District of Oregon on Sept. 22, 2016, a judge ordered White Star Cleaning and owner Vismark Ramos to pay $70,000 in back wages to 19 employees. The judge also ordered the defendants not to take any action to deter employees from asserting their rights under the FLSA or interfere with any investigation of wage or other violations.

Quote: “This judgment sends the clear message that an employer cannot use the bankruptcy system to avoid liability for federal wage violations,” said Thomas Silva, the Wage and Hour Division’s district director in Portland. “We will continue to use every enforcement tool available to protect employees’ rights against such employers.”

Information: 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, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. The act also provides that employers who violate the law are liable to employees for back wages and an equal amount in liquidated damages.

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 brief in Spanish.