US Department of Labor, North Carolina Industrial Commission sign agreement to protect workers from misclassification

News Brief

US Department of Labor, North Carolina Industrial Commission sign agreement to protect workers from misclassification

Participants: U.S. Department of Labor’s Wage and Hour Division
North Carolina Industrial Commission

Partnership description: The U.S. Department of Labor’s Wage and Hour Division and the North Carolina Industrial Commission signed a three-year Memorandum of Understanding intended to protect employees’ rights by preventing their misclassification as independent contractors or other non-employee statuses. The two agencies will provide clear, accurate and easy-to-access outreach to employers, employees and other stakeholders; share resources; and enhance enforcement by conducting coordinated investigations and sharing information consistent with applicable law.

Background: The division is working with the U.S. Internal Revenue Service and 32 other U.S. states to combat employee misclassification and to ensure that workers get the wages, benefits and protections to which they are entitled. Labeling employees as something they are not – such as independent contractors – can deny them basic rights such as minimum wage, overtime and other benefits. Misclassification also improperly lowers tax revenues to federal and state governments, and creates losses for state unemployment insurance and workers’ compensation funds.

More information on misclassification and the effort are available at http://www.dol.gov/misclassification/.

Quotes: “The Wage and Hour Division continues to attack this problem head on through a combination of a robust education and outreach, and nationwide, data-driven strategic enforcement across industries,” said David Weil, administrator of the Wage and Hour Division. “Our goal is always to strive toward workplaces with decreased misclassification, increased compliance, and more workers receiving a fair day’s pay for a fair day’s work.”

-- David Weil, U.S. Department of Labor Wage and Hour Division Administrator

“The Industrial Commission is excited about this agreement with the U.S. Department of Labor to share information critical to identifying potential employee misclassification, and we are looking forward to this collaboration as it will assist us in achieving our strategic goals.” 

-- Charlton L. Allen, North Carolina Industrial Commission Chairman

Agency
Wage and Hour Division
Date
August 31, 2016
Release Number
16-1411-NAT
Media Contact: Joe Versen
Phone Number

Plastering contractor to pay $365K in overtime back wages to employees misclassified as independent contractors

News Brief

Plastering contractor to pay $365K in overtime back wages to employees misclassified as independent contractors

Employer: Brownlow Plastering LLC

Site: 19031 Trippi Road, Hammond, Louisiana 70403

Investigation Findings: A U.S. Department of Labor Wage and Hour Division investigation found that Brownlow Plastering violated the overtime and record-keeping provisions of the Fair Labor Standards Act. An investigation by the division’s New Orleans District Office revealed that the company misclassified employees entitled to protections under the FLSA as independent contractors.

The division found an alleged labor broker used by the firm was an employee working directly for Brownlow Plastering. Workers hired by the “broker” to work for Brownlow were, in fact, direct employees. The alleged broker worked only for Brownlow – as did the workers he hired – providing no services to any other business. Despite the facts that none of these individuals were in business for themselves, that Brownlow bid all the work and supplied all the materials, and that Brownlow paid workers fixed hourly rates determined by the company, the employer claimed they were independent contractors because they were recruited through this “broker.”

This misclassification resulted in Brownlow violating the overtime and recordkeeping provisions of the FLSA when they:

  • Paid straight time rates for all hours worked, failing to pay overtime premium for hours worked beyond 40 in a workweek.
  • Failed to maintain accurate daily and weekly record of hours worked.

Resolution: Brownlow Plastering will pay $365,291 in overtime back wages to 147 employees. The employer also signed an enhanced compliance agreement in which the employer is required to provide:

  • Wage and Hour information about the employment relationship in all future subcontracts.  
  • The division’s Fact Sheet on the employment relationship to current and future employees.
  • Training to supervisors and managers on FLSA requirements at least once annually. 

Quote: “Employees labelled incorrectly as ‘independent contractors’ do not lose their legal rights to earn overtime wages,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “Workers denied these rights suffer, as do their families. Misclassification also hurts law-abiding employers who must compete with employers that game the system to undercut the competition. The Wage and Hour division considers misclassification a top enforcement priority and is working alongside our state, local and federal partners to achieve greater compliance with the law.”

Background:  The investigation in this case is typical of those the division refers to the Internal Revenue Service and the Louisiana Workforce Commission, as per its memoranda of understanding with those agencies to combat worker misclassification.

Under the FLSA, employers must distinguish employees from bona fide independent contractors. An employee – as distinguished from a person who is engaged in a business of his or her own – is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business that he or she serves.

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 New Orleans District Office at 504-589-6171. Information is also available at http://www.dol.gov/whd/.

Agency
Wage and Hour Division
Date
August 17, 2016
Release Number
16-1414-DAL
Media Contact: Chauntra Rideaux
Media Contact: Juan Rodriguez

US Labor Secretary Perez renews workplace rights agreements with five Central American, South American and Asian Pacific governments

News Release

US Labor Secretary Perez renews workplace rights agreements with five Central American, South American and Asian Pacific governments

Partnership renewals coincide with 2016 Labor Rights Week, Aug. 29-Sept. 4

WASHINGTON – At the U.S. Department of Labor headquarters in Washington today, U.S. Secretary of Labor Thomas E. Perez renewed partnership agreements with embassy officials representing the governments of Ecuador, Guatemala, Honduras, Peru and the Philippines. The renewals come as the department kicks off Labor Rights Week 2016, from today through Sept. 4. This year’s theme is “Your Work Has Dignity. Know Your Rights.”

Under these renewed agreements, the department’s Occupational Safety and Health Administration and Wage and Hour Division will continue their ongoing collaboration with consulates in providing information to workers about U.S. labor laws, including workers under H-2A and H-2B visas.

“Partnerships and outreach play a critical role in advancing workers’ rights and enforcing the laws that protect people at work,” said Secretary Perez. “By renewing these five embassy agreements, we will continue to enhance workers’ awareness about their rights and promote a better understanding of labor laws and practices in the U.S.”

Partnerships like these help the department enforce U.S. labor laws more effectively, especially in high-risk and low-wage industries where violations are more likely to occur. They also help the department’s enforcement agencies improve their information outreach efforts by identifying problems workers typically face.

Ecuadorian Ambassador Francisco Borja Cevallos emphasized the importance of his country’s government working together with OSHA and the Wage and Hour Division. “This renewed partnership will improve the Ecuadorian workers’ standard of living, through a better understanding of labor laws and their rights in the U.S. The Embassy and the Department will cooperate to provide outreach and training, as well as assist with enforcement efforts as needed, so Ecuadorian workers in the U.S. exercise effectively their labor rights in a safer workplace.”

Echoing their support of the effort, Honduran Ambassador Jorge Alberto Milla Reyes said, “Partnerships like these help to acknowledge the value of the labor and the rights of the Honduran people working in the U.S.”

Labor Rights Week is an annual campaign in the week leading up to Labor Day that heightens awareness of workplace rights issues through a series of training events, workshops and information-sharing programs. As participants, consulates sponsor events throughout the U.S. and invite representatives from area OSHA and Wage and Hour Division offices to deliver informational sessions on U.S. health, safety and wage laws and explain the resources available to workers and their employers.

More information about these and other consulate agreements and department programs designed to protect foreign workers is available at http://www.dol.gov/dol/cpp/.

Under the Occupational Safety and Health Act of 1970, employers are responsible for providing safe and healthful workplaces for their employees. OSHA’s role is to ensure these conditions for America’s working men and women by setting and enforcing standards, providing training, education and assistance. For more information, visit http://www.osha.gov/.

The Wage and Hour Division enforces federal minimum wage, overtime pay, record-keeping and child labor requirements of the Fair Labor Standards Act, the Migrant and Seasonal Agricultural Worker Protection Act, the H-2A and H-2B programs under the Immigration and Nationality Act, and other federal labor laws. More information is available at http://www.dol.gov/whd/.

Read this news brief in Spanish.

Agency
Wage and Hour Division
Date
August 29, 2016
Release Number
16-1765-NAT

US Labor Department finds 16 bulk mail delivery contractors owe more than $500K in back wages, benefits to more than 250 drivers

News Release

US Labor Department finds 16 bulk mail delivery contractors owe more than $500K in back wages, benefits to more than 250 drivers

Latest findings in ongoing federal effort to improve industry compliance

ST. LOUIS – Their drivers may have delivered the mail through snow, rain, heat and the gloom of night, but 16 mail haulers contracted by the U.S. Postal Service failed to pay full wages and benefits to more than 250 of their drivers in violation of federal law, an investigation by the U.S. Labor Department’s Wage and Hour Division has found.

Investigators determined the companies – operating in the Midwest – owe $538,887 in back wages to 255 drivers after the employers failed to pay them the prevailing wage and provide fringe benefits as required by the McNamara O’Hara Service Contract Act.

 “Companies that enter into federal contracts are made fully aware of their requirement to pay prevailing wages and fringe benefits to employees performing work on those contracts,” said Karen Chaikin, regional administrator for the Wage and Hour Division in Chicago. “When we find that companies fail to meet the requirements of their contracts, the division will continue to use every tool at our disposal to ensure that employers pay workers every penny they have rightfully earned. We will also act so that employers in this industry who play by the rules do not face unfair competition from those who do not.”

Several of the companies also failed to accurately record employee’s work hours and pay for all hours worked. The following is a list of the companies, number of employees affected and total wages owed:

Company/Location

# Owed

Wages

Company/Location

# Owed

Wages

Rood Trucking, Mineral Ridge, Ohio

102

$192,124

Jeff Wayne Moeller, Nixa, Mo.

2

$7,629

L.R.Vincent Trucking, Kingsford, Mich.

32

$153,566

Jones Mail Service, Randolph, Wisc.

16

$6,890

Palmer & Sons, Fenton, Mich.

10

$56,600

O.L. Thompson, Joliet, Ill.

9

$3,898

Terry L. Hawkes, Orient, Ohio

15

$46,278

Davis Mail Service, Jacksonville, Fla.

4

$989

Eagle Express South, Holland, Ill.

13

$21,614

Eugene E. Ulery, Verona, Ohio

2

$924

Jimco Transportation, Cape Girardeau, Mo.

2

$18,864

Big Four Trucking, Schiller Park, Ill.

1

$520

McRaes USM Service, Richfield, Wisc.

24

$16,297

Mark D. John, Galesburg, Ill.

1

$420

S&W Carriers, Auxvasse, Mo.

21

$12,216

Pylet Mail Inc., Topeka, Kansas

1

$77

In 2014, the division began an education and enforcement initiative focused on companies that have federal contracts to transport mail. In addition to conducting investigations, the division’s ongoing initiative includes educational outreach events for employers and industry stakeholders to provide compliance assistance and information on legal rights and responsibilities. The initiative also raises awareness among workers, community organizations and others regarding federal wage and hour laws and protections.

“We have provided informational sessions to the Star Route Mail Contractors Association to assist their members with compliance in government contracting,” said Norma Cervi, district director for the Wage and Hour Division in St. Louis, which is conducting the initiative. “The violations disclosed in these cases are far too common. We continue to work diligently to increase understanding and awareness of the laws so workers are paid their hard earned wages.”

Nationwide, in fiscal year 2015 the Wage and Hour Division found more than $35 million in back wages and unpaid fringe benefits for more than 18,000 workers under the McNamara-O’Hara Service Contract Act.

Accessible and searchable information on enforcement activities by the department is available at http://ogesdw.dol.gov/homePage.php.

For more information about the FLSA and other federal labor laws, call the division’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

Agency
Wage and Hour Division
Date
August 25, 2016
Release Number
16-1704-KAN
Media Contact: Scott Allen
Phone Number
Media Contact: Rhonda Burke
Phone Number

National Freight to pay more than $1M in back wages to 357 workers after US Labor Department investigation

News Release

National Freight to pay more than $1M in back wages to 357 workers after US Labor Department investigation

Global transportation service provider denied overtime to improperly classified employees

CHERRY HILL, N.J. – One of the nation’s largest commercial transportation companies will finally pay driver dispatchers and trailer yard spotters for the long hours they worked, following an investigation by the U.S. Department of Labor’s Wage and Hour Division.

Division investigators determined National Freight Inc. violated the Fair Labor Standards Act when it wrongly classified dispatchers and yard spotters as exempt from the law’s overtime requirements, and failed to pay the legally required wages. The company paid dispatchers flat salaries, regardless of the number of hours they worked, creating overtime violations when they worked more than 40 hours in a week. NFI paid yard spotters by the hour, but failed to pay overtime when legally required. The division also found the global service provider – based in Cherry Hill and doing business as NFI – failed to maintain payroll records required by law.

NFI will pay $1,072,061 to 357 employees to remedy the violations. The company has also reclassified hundreds of employees working as dispatchers and yard spotters, agreeing to pay them proper overtime compensation going forward.

“Every dollar counts for NFI employees who work long days to earn a living,” said Dr. David Weil, administrator of the Wage and Hour Division. “The case’s resolution should send a strong message to other industry employers who may be denying overtime to workers in these positions: we will use every tool available to ensure that workers receive every penny they have earned, and to level the playing field for employers who play by the rules and do right by their workers.”

In addition to paying back wages, NFI has also entered into an agreement with the department to take the following steps to ensure future FLSA compliance:

  • Hire an internal compliance officer.
  • Institute and implement complaint procedures.
  • Create and publicize a complaint hotline.
  • Conduct confidential interviews with complainants.
  • Maintain a written log of complaints made to the compliance officer.
  • Provide training for all managerial employees.

Employing more than 8,000 associates, NFI operates 29 million square feet of warehouse and distribution space, and has a company-owned fleet of over 2,000 tractors and 8,200 trailers. Generating more than $1.2 billion in revenue annually, NFI serves customers around the world in a variety of industries. Its business lines include dedicated transportation, warehousing, intermodal, brokerage, transportation management, global and real estate services.

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 of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers are required to maintain accurate time and payroll records.

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. Job titles do not determine exempt status. In order for an exemption to apply, an employee's specific job duties and salary must meet all the requirements of the department's regulations.

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) or Southern New Jersey District Office at 609-538-8310. Information also is available at http://www.dol.gov/whd/.

Agency
Wage and Hour Division
Date
August 25, 2016
Release Number
16-0754-NEW
Media Contact: Leni Fortson
Media Contact: Joanna Hawkins

US Labor Department finds $576K in back wages, restitution for Dominican Republic farm workers who ‘paid’ to pick vegetables

News Release

US Labor Department finds $576K in back wages, restitution for Dominican Republic farm workers who ‘paid’ to pick vegetables

Investigation uncovers employers’ scheme to exploit H-2A foreign workers

FOLEY, Minn. – Imagine paying for the right to pick vegetables, and then traveling more than 2,000 miles  – from the Dominican Republic to a Minnesota farm where your employer demanded you kick back a portion of your wages and the entire cost of the airfare you paid – all in violation of federal law.

Seventy-six farmworkers from the Caribbean nation were victims of the scheme from 2010 to 2015 until a U.S. Department of Labor Wage and Hour Division investigation, and a joint effort with the U.S. Department of State’s Bureau of Diplomatic Security and the U.S. Department of Justice ended it.

As a result, the division found the workers are owed $576,707 in back wages and other restitution by their employer, Svihel Vegetable Farm and owner, John Svihel, who violated provisions of the H-2A federal visa program that allows employers to hire temporary foreign labor for agricultural work.

 “Lining your pockets with the hard-earned wages of foreign workers is unacceptable and undermines the foreign visa program’s value to supply thousands of workers to the American agricultural industry,” said Dr. David Weil, administrator of the Wage and Hour Division. “The behavior of the parties involved here is criminal and should remind workers and employers that the Wage and Hour Division will use all available enforcement tools – and engage our partners in diplomatic corps and law enforcement – to protect workers’ rights and ensure honest employers have a fair and level playing field on which to do business.”

The joint effort found the workers’ recruitment payments, and wage and airfare kickbacks were criminal violations of the federal visa program. The programs require employers to pay for workers’ housing and travel expenses to and from their home country, and forbid employers from collecting recruitment fees or wage kickbacks.

The investigation revealed Svihel hired the workers through Labor Listo, an unregistered business operated by Sandra Lee Bart of Seven Hills, Ohio, and her employee, Wilian Socrate Cabrera. From 2008 to 2015, Bart and Cabrera recruited workers in his Dominican hometown of Navarrete for jobs under the visa program.

Cabrera charged the workers a one-time recruitment fee of between $420 and $2,385, as well as an annual fee of $374, which he split with Bart. If workers refused to pay the fees they were told they would not be allowed to return to work for the next growing season. Bart and Cabrera demanded and collected reimbursement for the full cost of workers’ airfare. In addition, Svihel kept a percentage of the workers’ wages – totaling about $90,000 – that he spent on personal travel and leisure.

During its investigation, the division determined Svihel committed violations of H2A wage provisions and, in some cases, overtime rules governing 36 other workers from Mexico and Eastern Europe. Svihel owes a total of $199,218 to these workers, employed under H2A and J1 visas.

On June 16, 2016, Svihel pled guilty to conspiracy to commit fraud in foreign labor contracting. He employed H-2A workers recruited by Labor Listo from 2010 to 2015 at his Foley farm. As part of his plea agreement, he signed a supplemental compliance monitoring agreement that requires him to hire an expert agricultural monitor at his own expense. This monitor will visit the farm twice during the season to interview workers, inspect housing and vehicles, and review records.

Cabrera pled guilty to fraud in foreign labor contracting on July 14, 2016, and is currently incarcerated. Less than a month later – on Aug. 8, 2016 – a jury found Bart guilty of conspiring to commit fraud, conspiracy to commit false swearing in an immigration matter, conspiracy to commit fraud in foreign labor contracting, and conspiracy to commit wire and mail fraud.

This case involved the first collaboration between the division and the State Department’s Diplomatic Security Services in a criminal investigation and prosecution of worker visa programs. The U.S. Department of Homeland Security and the labor department’s Office of the Inspector General also assisted.

The H-2A temporary agricultural program allows agricultural employers who anticipate a shortage of domestic workers to bring nonimmigrant foreign workers to the U.S. to perform agricultural labor of a temporary or seasonal nature.

Before the U.S. Citizenship and Immigration Services can approve an employer’s petition for H-2A visa workers, an employer must file an application with the department stating that there are not sufficient workers who are able, willing, qualified and available, and that the employment of nonimmigrant, temporary workers will not adversely affect the wages and working conditions of similarly employed U.S. workers. The law provides for numerous worker protections and employer requirements with respect to wages and working conditions that do not apply to nonagricultural programs.

For fiscal year 2015, the department has processed more than 6,700 H-2A applications.

Visit http://www.dol.gov/whd or call the division’s toll-free helpline at 866-4US-WAGE (487-9243) for more information.

Agency
Wage and Hour Division
Date
August 25, 2016
Release Number
16-1694-CHI
Media Contact: Scott Allen
Phone Number
Media Contact: Rhonda Burke
Phone Number

Los Angeles senior living facility to pay $81K in back wages, damages to 17 workers after violating labor laws

News Brief

Los Angeles senior living facility to pay $81K in back wages, damages to 17 workers after violating labor laws

Investigation found employer failed to pay overtime

Employers: Astoria Quality Senior Living, a residential care facility doing business as Astoria II

Location: 8041 Blackburn Ave., Los Angeles, California

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found that Astoria II paid employees a flat daily rate without regard for the number of hours that they worked. This practice resulted in overtime violations when employees worked more than 40 hours in a week but were not paid an overtime premium, as is required by the Fair Labor Standards Act. Investigators also found that the care facility for seniors failed to keep accurate records of the hours employees worked, in violation of FLSA’s recordkeeping provisions.

Resolution: Astoria II has agreed to pay $40,795 in back wages plus an equal, additional amount in damages, totaling $81,590 to 17 underpaid employees.

Quote: “Regardless of the method of pay, employers must make sure they pay overtime to eligible employees when they work more than 40 hours,” said Susan Bacon, assistant district director for the Wage and Hour Division in Los Angeles. “Thanks to this investigation, these hard-working employees will now receive the wages they have rightfully earned. The resolution of this case demonstrates our commitment to ensuring that workers take home every penny they deserve, and that employers that play by the rules are not operating at a competitive disadvantage to those who do not.” 

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/.

Agency
Wage and Hour Division
Date
August 24, 2016
Release Number
16-1685-SAN
Media Contact: Leo Kay
Phone Number
Media Contact: Jose Carnevali

Nail salons in Nassau, Suffolk counties to pay $203K in back wages, damages and penalties to 95 underpaid salon workers

News Release

Nail salons in Nassau, Suffolk counties to pay $203K in back wages, damages and penalties to 95 underpaid salon workers

US Department of Labor enforcement initiative finds vulnerable workers not paid overtime

LONG ISLAND, N.Y. – An investigation by the U.S. Department of Labor’s Wage and Hour Division’s Long Island District Office has resulted in the recovery of more than $178,000 in back wages and damages for 95 nail salon workers underpaid between 2012 and 2015 at six Nassau and Suffolk County nail salons. In addition, the salons will pay $24,640 in civil monetary penalties as part of their settlement.

The latest investigation is part of the division’s ongoing strategic enforcement initiative to eliminate wage violations and help educate vulnerable workers in the low-wage, nail salon industry about their employment rights. The investigations revealed overtime and record-keeping violations of the Fair Labor Standards Act.

“Nail salon workers cannot afford to be underpaid,” said Irv Miljoner, director of the Wage and Hour Division’s Long Island District Office. “The industry employs vulnerable workers less likely to complain about unfair labor practices because of language barriers and fear of losing their jobs.”

Many nail salon workers are not paid overtime. Typically, they are paid a flat rate – in cash – for each day they work, in an attempt to avoid both paying overtime and keeping accurate time records. The Bureau of Labor Statistics reports annual average earnings for a manicurist in Nassau and Suffolk counties is $20,670 with an hourly wage of $9.94.

The settlements include the following salons:

  • Nails & Relaxation Spa 1 in Copiague will pay 19 employees $31,365 in back wages and an equal amount in liquidated damages. The salon will also pay $5,544 in civil monetary penalties.
  • M B Relaxation Spa in Massapequa will pay 13 employees $17,986 in back wages. The salon will also pay an additional $4,004 in civil monetary penalties.
  • Nails & Relaxation Spa III in Bellmore will pay 27 employees $14,912 in back wages and an equal amount in liquidated damages. The salon will also pay an additional $8,316 in civil monetary penalties.
  • Nails & Relaxation IV in Ronkonkoma will pay 13 employees $21,532.
  • Nails & Relaxation V in Farmingville will pay six employees $9,045 in back wages and an equal amount in liquidated damages. The salon will also pay $1,848 in civil monetary penalties.
  • Aegean Spa & Nails in West Babylon will pay 17 employees $14,384 in back wages and an equal amount in liquidated damages. The salon will also pay $4,928 in civil monetary penalties.

The Wage and Hour Division offers publications describing workers’ rights translated into many different languages, including Spanish, Vietnamese, Korean, Chinese, Thai, Haitian, Russian, Hmong, Tagalog, Polish, Brazilian Portuguese, Urdu, Hindi, Bahasa Indonesian, Somali, Samoan and Punjabi.

For more information about the FLSA, contact the division’s toll-free helpline at 866-4US-WAGE (487-9243) or its Long Island District Office at 516-338-1890. Information also is available at http://www.dol.gov/whd/.  

Agency
Wage and Hour Division
Date
August 24, 2016
Release Number
16-1748-NEW
Media Contact: James C. Lally
Phone Number
Media Contact: Ted Fitzgerald

Labor Department, FAR Council issue final regulations, guidance to ensure federal contractors better comply with workplace rights, protections

News Release

Labor Department, FAR Council issue final regulations, guidance to ensure federal contractors better comply with workplace rights, protections

Action implements Fair Pay and Safe Workplaces Executive Order

WASHINGTON – To ensure that federal contractors better comply with laws that protect their workers’ safety, wages and civil rights, the U.S. Department of Labor and the Federal Acquisition Regulatory Council today announced final regulations and guidance implementing the Fair Pay and Safe Workplaces Executive Order.

Signed by President Obama in July 2014, the order requires prospective federal contractors to disclose labor law violations and gives agencies more guidance on how to consider labor violations when awarding federal contracts. It directs the department and the council to issue regulations and guidance to implement the new requirements.

The regulations and guidance announced today are designed to increase efficiency and cost savings by ensuring that federal contractors are responsible and provide basic workplace protections. The guidance also creates a process for agencies and the department to help contractors come into compliance with labor laws. In crafting the final regulations and guidance, department and council received and considered thousands of comments from members of the public, including many in the contracting community.

“Federal contracts should deliver value for taxpayers in a way that is consistent with our nation’s values,” said U.S. Secretary of Labor Thomas E. Perez. “Contractors that illegally cut corners at the expense of their workers should not benefit from taxpayer-funded federal contracts. At the same time, employers who meet their legal responsibilities should not have to compete with those who do not. The regulations and guidance we are announcing today seek to ensure a level playing field for contractors and workers alike.”

Contractors are already required to disclose findings of fault and liability made in administrative or civil proceedings; however, current disclosures do not give a full picture of the contractor’s labor compliance track record and leave agencies vulnerable to making awards to contractors that cheat their workers, competitors and the taxpayers.

With the new rule phased in fully, prospective contractors will be required to disclose violations of 14 basic workplace protections from the previous three years – including those addressing wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights protections. The final rule will make sure that federal agencies have the information they need to determine which contractors are meeting their responsibilities to workers.

In addition to setting up a process to effectively consider labor law violations, the order requires that contractors' employees are given the necessary information each pay period to verify the accuracy of their paycheck. It also ensures that workers who may have been sexually assaulted or had their civil rights violated get their day in court, putting an end to mandatory pre-dispute arbitration agreements covering these claims at large federal contractors.

To help contractors come into compliance with labor laws, the regulations and guidance build on the existing procurement system. Most federal contractors will only have to attest that they comply with laws providing basic workplace protections. Designated Agency Labor Compliance Advisors will be available to help contractors who do report violations and coordinate with the relevant enforcement agency experts to help them come into compliance.

The final regulations will be effective on Oct. 25, 2016, and be implemented in phases to give contractors time to understand their responsibilities.

The week of Sept. 12, 2016, the department will begin a pre-assessment process for contractors that anticipate competing for future federal contracts. The department will be available to discuss existing labor law violations and whether additional compliance measures are warranted. For information about the pre-assessment process, please visit: https://www.dol.gov/asp/fairpayandsafeworkplaces/PreAssessment.htm.

Further information on the final guidance and regulations as well as implementation and compliance can be found at: https://www.dol.gov/asp/fairpayandsafeworkplaces/.

Date
August 24, 2016
Release Number
16-1737-NAT

SoCal contractor pays $134K in overtime back wages, damages and penalties to 52 workers after Labor Department investigation

News Brief

SoCal contractor pays $134K in overtime back wages, damages and penalties to 52 workers after Labor Department investigation

Employer: Dinh Construction Corporation

Location: 2313 Hall Ave., Riverside, California

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found that Dinh Construction violated the overtime provisions of the Fair Labor Standards Act when it failed to pay employees overtime at time-and-a-half for hours they worked beyond 40 per week. Instead, the employer paid overtime hours at straight time rates, with separate checks. In addition, the construction contractor failed to keep accurate records of the hours and wages paid, in violation of FLSA’s recordkeeping provisions.

Resolution: Dinh Construction has paid $65,087 in overtime back wages and an additional, equal amount of $65,087 in damages to 52 workers. The employer has also been assessed a $4,004 civil penalty because of the willful nature of the violations found.    

Quote: “Workers required to put extra hours must receive the overtime pay they rightfully deserve,” said Daniel Pasquil, district director of the Wage and Hour Division in West Covina. “Extra work equals extra pay. We are committed to leveling the playing field so that employers do not take shortcuts at the expense of their workers and other businesses don’t get placed at a competitive disadvantage in the marketplace.”

Information: Dinh Construction is an industrial and commercial construction contractor specializing in the transportation, installation, remodeling, and demolition of modular structures.

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 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. Employers are prohibited from retaliating against workers who exercise their rights under the law.

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/.

Read this news brief in Spanish.

Agency
Wage and Hour Division
Date
August 23, 2016
Release Number
16-1108-SAN
Media Contact: Leo Kay
Phone Number
Media Contact: Jose Carnevali
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