Date of Action: Oct. 3, 2016

Type of Action: Filing of lawsuit

Name of Defendants: Solid Drywall LLC
Solid Construction Group LLC
Frank LeBaron

Allegation: A U.S. Department of Labor Wage and Hour Division investigation found Solid Drywall LLC and Solid Construction Group LLC of Midvale, Utah; and owner Frank LeBaron violated the Fair Labor Standards Act when they failed to pay minimum wage to 15 employees and pay the applicable overtime rate to 133 or more employees misclassified as independent contractors. The division is unable to identify all of the employees to whom Solid owes back wages because the company failed to keep required records for employees it funneled and paid through a labor provider.

The division also determined that company payroll records show it paid workers by check for up to 80 hours in a semi-monthly pay period, and paid a straight time rate in cash or with a prepaid debit card for all overtime hours worked in violation of the law. Investigators also found Solid paid some workers “off the books” in cash at the straight time rate for all hours worked including overtime hours. These violations demonstrate a willful disregard for the FLSA’s overtime requirements.

The department’s suit seeks to establish the employment relationship between Solid and a number of its employees; that the company paid minimum wage to some employees improperly; and that it denied overtime pay to all of the company’s employees.

In addition, the action by the Secretary of Labor seeks a court order to require Solid to:

• Comply with the FLSA’s minimum wage, overtime and record-keeping provisions in the future.
• Pay back wages owed to employees, plus an equal amount in liquidated damages.
• Keep employee records as required by the FLSA.

Quote: “Construction work is hard enough without worrying about getting paid fairly,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “Solid Drywall and Solid Construction’s employees deserve to be paid for all the time they spend working, including overtime. This lawsuit shows the department’s commitment to root out and remedy these violations, protecting the workers and leveling the playing field for contractors who play by the rules.”

Resolution: The department seeks a court ruling for unpaid minimum wage and overtime compensation and an equal amount in liquidated damages for Solid employees. The suit also seeks the court to order Solid and related companies to abide by labor laws, maintain required time and pay records, and ultimately pay its employees accordingly.

Additional Information: The Wage and Hour Division continues to conduct investigations in low-wage industries where data and evidence show high rates of non-compliance, and where workers are less likely to complain. Both education and enforcement continue in the construction industry in which a high violation rate exists.

Court: U.S. District Court for the Utah Central Division

Docket Number: 2:16-cv-01025-BCW

Employer: Buy Back Inc.

Locations: 1405 W. Shields Ave., Fresno
1435 S. Cedar Ave., Fresno
3190 E. Tulare St., Fresno
370 B St., Fresno
1435 Fresno St., Fresno

Investigation findings: Investigators with the U.S. Department of Labor’s Wage and Hour Division found that Buy Back violated the minimum wage and recordkeeping provisions of the Fair Labor Standards Act. The company collects and recycles aluminum, plastic and glass in five locations in Fresno, California, as a CalRecycle program participant.

The employer paid homeless workers identified as ‘helpers’ either a daily rate, food and drinks, or a few dollars regardless of the hours worked – resulting in the company’s failure to pay workers at least $7.25 per hour, in violation of  the federal minimum wage requirements. Affected employees worked assisting customers, sorting recycling materials, dumping recyclables into chained baskets and cleaning the locations at the end of the day. Recordkeeping violations resulted from the employer’s failure to record all the hours employees worked and their rates of pay.

Resolution: Buy Back has paid $15,272 in back wages and an equal, additional amount in damages to six employees.

Quote: “These vulnerable workers held up their end of the bargain and provided their hard work – they deserve to be paid every cent they have legally earned,” said Nora Pedraza, assistant district director of the Wage and Hour Division in Fresno. “Designating someone a ‘helper’ instead of an employee does not allow companies to avoid paying minimum wage. The Wage and Hour Division is committed to continuing its work in this industry and in others where our data and evidence show vulnerable workers are more likely subject to these types of violations.”

Background:  In 2015, the division began an education and enforcement initiative in the Southern California recycling industry. Working with the California Department of Resources, Recycling and Recovery on joint investigations and sharing facility information, the division found violations of the FLSA in more than 77 percent of facilities investigated.

Information: The FLSA requires that employers pay covered, nonexempt workers at least the federal minimum wage of $7.25 per hour for all hours worked, plus overtime at one and one-half times their regular wages for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records. The law prohibits employers from retaliating against workers who exercise their rights.

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.

WASHINGTON – The U.S. Department of Labor announced today a consent judgment requiring the owners of two Johnny Rockets restaurants in the Washington, D.C. metropolitan area to pay $571,460 in back wages and liquidated damages to 55 servers denied the minimum wage and overtime.

Judge Colleen Kollar-Kotelly of the U.S District Court for the District of Columbia entered the consent judgment against Dariush Inc. and Rockets and Rockets Inc. – both doing business as “Johnny Rockets” – and co-owner Gholam Kazemian.

The judgment resolves a lawsuit filed by the department after an investigation by its Wage and Hour Division focused on the fast food restaurants’ franchise locations at Union Station in the District of Columbia, and in Arlington, Virginia. The lawsuit sought to recover $285,730 in minimum wages and overtime back wages, including the misappropriated tips, plus an equal amount in liquidated damages, for the 55 employees.

The investigation found that as early as February 2013 until at least May 2015, the defendants violated the Fair Labor Standards Act when they required 55 servers to contribute a portion of their total tips back to the employer, who then distributed the money to cooks and dishwashers, who were not tipped employees. Also, in doing so, the employer paid servers less than the federal minimum wage of $7.25 as required.

Additionally, the defendants failed to pay required overtime wages to employees when they worked more than 40 hours in a week, and did not keep accurate records of all hours worked by employees.

The consent judgment orders the defendants to pay $285,730 in back wages and an equal amount in liquidated damages.

“When employers like these two Johnny Rockets restaurants fail to pay legally required wages to tipped workers, they violate the FLSA in an industry where all too often unscrupulous employers short employees’ pay,” said Mark Lara, director of the Wage and Hour Division’s Baltimore District Office. “The U.S. Department of Labor is determined to protect vulnerable restaurant workers by identifying and remedying wage violations.”

Many restaurants require servers to pool their tips for workers to share equally. A valid tip pool may not include employees who do not receive tips customarily and regularly, such as dishwashers, cooks, chefs and janitors. When an employer utilizes employees’ tips for any purpose other than a valid tip pool, as was the case at Johnny Rockets, it is a violation of the tip credit provision of the FLSA. As a result, no tip credit may be claimed, and the employees are entitled to receive the full cash minimum wage on a retroactive basis, as well as a return of the tips that were misappropriated.

“As demonstrated in this case, we will use all enforcement tools available, including litigation and the assessment of liquidated damages, to ensure employees receive the wages they have rightfully earned,” said Oscar L. Hampton, the department’s regional solicitor in Philadelphia.

The FLSA requires that covered, nonexempt workers be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus one-and-one-half times their regular wages for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records.

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: Oct. 3, 2016

Type of Action: Settlement reached to resolve allegations of retaliation

Name of Defendants: Maria R. Mendez Zuniga, dba as La Iguana Restaurant #4 and Jesus Zuniga in Portland, Texas

Allegation: The U.S. Department of Labor’s Wage and Hour Division investigated the October 2015 termination of a cook at La Iguana Restaurant in Portland that occurred less than a week after the division informed the company it owed $25,427 in back wages to nine employees for violations of the Fair Labor Standards Act found in a previous investigation.

The division’s investigation reviewed alleged violations of the FLSA’s anti-retaliation protections. The employer mistakenly believed the worker, employed by the company for 13 years, filed a complaint with the division. Federal law prohibits an employer from firing or discriminating against any employee who files a complaint with the division. The FLSA also protects employees who complain about wage or safety issues to their employers or who cooperate with federal investigations.

Quote: “We want to send a very clear message to employers that retaliation will not be tolerated, under any circumstances,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest.  “Without strong protections for exploited workers who find the courage to step forward, those subject to violations would remain in the shadows. Undocumented workers are particularly vulnerable to retaliation in the workplace. The law is very clear: the Wage and Hour division enforces the law regardless of a person’s immigration status.”

Resolution: The employers – Jesus Serrato Zuniga and Maria Zuniga – will pay the terminated employee $2,500 in lost wages and an equal amount in liquidated damages. The company will also prominently post the division’s Fact Sheet #77A in English and Spanish with information on the FLSA’s anti-retaliation laws.

Background: La Iguana Restaurant #4 is a full-service restaurant and bar specializing in seafood and Tex-Mex cuisine. Based in Portland, an area of Corpus Christi, where the company has operated since 2000.

Additional Information: The division continues to conduct investigations in low-wage industries where data and evidence show high rates of non-compliance, and where workers are less likely to complain. Both education and enforcement continue in the restaurant industry in which a high violation rate exists.

Date of Action: Sept. 9, 2016

Type of Action: Lawsuit

Name of Defendant: Wok on Wheels USA LLC, Shin Oak Investments LLC and Cedars Enterprises LLC —doing business as Wok on Wheels; owners Said Al-Haj and Rhonda Al-Haj.

Allegation: The U.S. Department of Labor filed a lawsuit against Wok on Wheels USA LLC, Shin Oak Investments LLC, Cedars Enterprises LLC—doing business as Wok on Wheels and owners Said Al-Haj and Rhonda Al-Haj after an investigation by the department’s Wage and Hour Division found that the employers willfully violated the Fair Labor Standards Act. The defendants failed to pay 20 current and former employees $82,280 in overtime pay. Investigators from the division’s San Antonio District Office found Wok on Wheels failed to pay the proper overtime rate to tipped delivery drivers and paid a salary instead of proper overtime to non-exempt cooks. Additionally, investigators determined the employer failed to keep track of all hours worked each day and the total hours worked each week, leading to a record-keeping violation. Wok on Wheels has been investigated three times in the last six years with the same or similar violations found in the current investigation.

Quote: “Willful practices that violate the law and cheat workers on their pay are taken seriously by the division,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest.  “All workers deserve a fair day’s pay for a hard day’s work.”

Resolution: The department seeks $82,280 in back wages and an equal amount in liquidated damages, and an injunction against future violations of the FLSA by Wok on Wheels and owners Said Al-Haj and Rhonda Al-Haj.

Background: Based in San Antonio, Texas, Wok on Wheels operates three delivery and dine-in restaurants.

Court: U.S. District Court for the Western District of Texas, San Antonio Division

Docket Number: 5:16-CV-00902-FB

Employer name: Patterson Services Inc.

Investigation site: 5800 Riverview Road
Mableton, Georgia 30126

Investigation findings: After an investigation by the U.S. Department of Labor’s Wage and Hour Division’s Atlanta District Office, investigators found that Patterson Services violated the overtime and recordkeeping provisions of the Fair Labor Standards Act.

Specifically, the waste management company failed to pay overtime to 29 truck drivers. The employer paid the drivers a fixed rate per day, without regard to how many hours they worked. This practice resulted in overtime violations when the employees worked more than 40 hours in a week and the employer failed to pay the required time and one-half their regular rate of pay for overtime. The employer also failed to maintain required time and payroll records.

Resolution: Patterson Services will comply with the FLSA and pay 29 employees a total of $150,000 in back wages.  

Quote: “These Patterson Services’ truck drivers put in long hours to support their families and deserve to be paid properly,” said Eric Williams, district director for the Wage and Hour Division in Atlanta. “This case highlights the urgency for employers’ to review and comply with the labor laws that apply to their businesses. It is the employer’s responsibility to know and ensure employees receive the proper wages they have legally earned. The Wage and Hour Division will continue to enforce the law and to provide education to make sure that happens.”

Background: The FLSA provides an exemption from the overtime requirements for drivers, driver’s helpers, loaders and mechanics whose duties affect the safety of operation of motor vehicles in transportation on public highways in interstate commerce. That exemption did not apply to drivers in this case because they worked only within the state of Georgia. Patterson Services is a transportation company that provides dump-truck services to remove debris and waste from Georgia construction sites.

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: Key Resources Inc.

Investigation site: 3703 West Market St.
Greensboro, North Carolina 27403

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

Division investigators examined compliance for the company’s temporary staff performing warehouse assembly line work. They determined that Key Resources:

• Failed to pay employees at least the legally required federal minimum wage for all hours worked.  The employer failed to pay employees when they clocked in and waited at the start of their shifts to be assigned to an assembly line, and for cleaning their work areas at the end of their shifts.
• This practice also resulted in overtime violations when employees worked more than40 hours in a work week while this pre and post-shift time remained unpaid. 

Resolution: Key Resources will comply with the FLSA and will pay 450 employees $107,684 in back wages. As part of its adjustments to its operations to facilitate compliance with the law, the employer moved its time clock closer to the warehouse, reducing the amount of time workers need prior to their shifts, and will no longer use the time clock only for keeping attendance; it will now use the time clock to record and compensate workers for actual hours worked. In addition, employees with clean-up duties at the end of their shifts will remain on the clock until their duties are completed.

Quote: “Violations of federal minimum wage and overtime provisions have a tremendous economic impact on low-wage workers and their families. The law is very clear about what must be considered work time. It is the employer’s responsibility to know and comply with the regulations,” Richard Blaylock, the Wage and Hour Division’s district director in Raleigh. “We offer plenty of compliance assistance and are available to help both workers and employers to ensure every worker gets a fair day’s pay for a fair day’s work.”  

Background: Based in Greensboro, Key Resources is a staffing agency specializing in distribution, product, clerical and skilled labor.

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); the Raleigh District Office at 919-790-2742 or visit http://www.dol.gov/whd/.

Employer: R&R Construction Services Corp.

Sites: Maile Sky Court Hotel
2058 Kuhio Ave., Honolulu Hawaii

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division found R&R Construction Services Corp. violated overtime provisions of the Fair Labor Standards Act. Specifically, this employer misclassified its workers as independent contractors rather than employees. This practice resulted in overtime violations when R&R paid these workers fixed rates per day, without regard to how many hours they worked, and they worked more than 40 hours in a week. Workers on the project typically worked 10-hour days, 6 or 7 days per week.

Resolution: The company paid 95 workers, including painters, carpenters, plumbers, laborers and cleaners $185,688 in unpaid overtime and an equal amount in damages, for a total of $371,376.  The department also assessed a civil money penalty of $68,680 against the employer for the willfully violating the overtime provision. The Hawaii Department of Labor and Industrial Relations fined R&R Construction $767,000 recently for misclassifying construction employees as independent contractors.

Quote: “This case provides a great example of federal and state agencies working together on behalf of disenfranchised workers to more comprehensively safeguard their pay and work conditions,” said Terence Trotter, director of the Wage and Hour Division office in Honolulu. “We’ll remain vigilant in our efforts to find other employers utilizing similar schemes to gain a competitive advantage in the marketplace at the expense of workers and lawfully compliant employers.”

Background:  Employees subject to misclassification often are denied access to critical state and federal baseline benefits and protections, including minimum wage, overtime, family and medical leave, unemployment insurance, worker’s compensation, and safe workplaces. The Wage and Hour Division has entered into partnerships with 35 states, including Hawaii, to work together to combat misclassification.

Information: Headquartered in Houston, R&R Construction Services Corp. was hired by Selby Construction as a subcontractor to renovate the Maile Sky Court Hotel in Waikiki to reopen it as a Holiday Inn Express.

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/.

AUSTIN, Texas – In nearly every one of its investigations of restaurants in fiscal year 2016, the U.S. Department of Labor’s Wage and Hour Division says restaurant owners in the Austin area violated federal labor law by not paying their workers the wages they were legally owed.

The division found violations of the Fair Labor Standards Act in 95 percent of its investigations of area restaurants from Oct. 1, 2015, to June 30, 2016, down slightly from the 98 percent violation rate in fiscal year 2015. In just nine months ending in June 2016, investigators helped recover more than $330,000 in back wages for 500 Austin restaurant workers.

“The current level of noncompliance found in these investigations is not acceptable,” said Dr. David Weil, administrator of the Wage and Hour Division. “WHD will continue to use every tool we have available to combat this issue. This includes vigorous enforcement as well as outreach to employer associations and worker advocates to ensure that Austin restaurant workers receive a fair day’s pay for a fair day’s work."

Findings like these are all-too-common in restaurants across the nation. The industry traditionally employs some of the country’s lowest-paid workers who, due to a lack of knowledge of the law or a reluctance to exercise their rights, are vulnerable to labor violations.

Some of the common violations include employers:

• Requiring employees to work exclusively for tips, with no regard to minimum-wage standards.
• Making illegal deductions from workers’ wages for walkouts, breakages, credit card transaction fees and cash register shortages, which reduce wages below the required minimum wage.  
• Paying straight-time wages for overtime hours worked.
• Calculating overtime incorrectly for servers based on their $2.13 per hour base rates before tips, instead of the federal minimum wage of $7.25 per hour.
• Failing to pay proper overtime for salaried non-exempt cooks.
• Creating illegal tip pools involving kitchen staff.
• Failing to maintain accurate and thorough records of employees’ wages and work hours.
• Committing significant child labor violations, such as allowing minors to operate and clean hazardous equipment, including dough mixers and meat slicers.

The Wage and Hour Division uses data and evidence to focus its resources strategically on where violations rates are high but the likelihood of workers speaking up is low, and employs a combination of enforcement and education to boost compliance.  In Austin, the division continues to engage key employer associations and state agencies to educate the restaurant industry about the systemic violations typically found, and to provide employers with FLSA compliance assistance information to improve compliance in the future.

In 2017, the division will expand outreach, education, and enforcement in the industry to more cities and states in the Southwest and beyond to continue to combat these widespread violations.

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 also are required to maintain accurate time and payroll records.

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/.

Editor’s Note: Wage and Hour Division Administrator Dr. David Weil will be available to news media to discuss the state of labor violations in this industry Oct. 5 at 11 a.m. CDT at the Homer J. Thornberry Federal Judicial Building, 903 San Jacinto Blvd., Suite 1400, Austin, TX 78701.

Members of the news media wishing to attend should contact Juan J. Rodríguez via email.

BOSTON – The U.S. Department of Labor has filed a lawsuit with the department’s Office of Administrative Law Judges alleging a Massachusetts technology manufacturer engaged in discriminatory pay practices against female assembly workers at its Peabody headquarters.

A compliance review by the department’s Office of Federal Contract Compliance Programs found that Analogic Corporation’s compensation policies resulted in systemic discrimination against women employed in Assembler 2 and Assembler 3 positions, in violation of Executive Order 11246. Analogic paid female employees in those positions less than comparable males employed in those positions. The pay disparity remained after adjusting for differences in legitimate, pay-determining factors.

“Our investigation found that Analogic knew or should have known that its total compensation policies discriminated against female assemblers on the basis of gender,” said OFCCP Director Patricia A. Shiu. “Federal contractors must ensure taxpayer money never funds employment discrimination. Analogic’s failure is unacceptable, and our action today should serve to remind other federal contractors that we will aggressively pursue compensation discrimination cases.”

The suit also asks that Analogic be ordered to:

• Modify its compensation system to eliminate compensation disparities between males and females in the Assembler 2 and Assembler 3 positions.
• Provide back pay, interest, front pay, salary adjustments, fringe benefits, seniority and other benefits to the affected female workers.
• Train all employees involved in the company’s compensation process regarding its non-discrimination obligations as a federal contractor.
• Perform an in-depth analysis annually of its total employment process to determine whether and where impediments to equal employment opportunity exist.
• Develop an internal auditing and reporting system to measure the effectiveness of its affirmative action program.

In the event that – following a favorable ruling on its claims – Analogic fails to provide relief to the affected employees, the department is asking the court to cancel all of Analogic’s government contracts and to debar Analogic from receiving future government contracts until it satisfies the Secretary of Labor that its personnel and employment policies comply with Executive Order 11246.

Analogic designs and manufactures guidance, diagnostic imaging and threat detection technologies. The company holds contracts and performs work for such federal agencies as the National Institutes of Health, U.S Department of Veterans Affairs, Food and Drug Administration and Defense Health Agency. It has approximately 1,500 employees worldwide, including about 900 at the Peabody location.

The full complaint can be viewed here.

In addition to Executive Order 11246, OFCCP enforces Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974. These laws, as amended, make it illegal for contractors and subcontractors doing business with the federal government to discriminate in employment because of race, color, religion, sex, sexual orientation, gender identity, national origin, disability or status as a protected veteran. In addition, contractors and subcontractors are prohibited from discriminating against applicants or employees because they have inquired about, discussed or disclosed their compensation or that of others, subject to certain limitations. For more information, please call OFCCP’s toll-free helpline at 800-397-6251 or visit http://www.dol.gov/ofccp/.