COLUMBUS, Neb. – While some in charge at Daniels Produce LLC kept workers away from U.S. Department of Labor Wage and Hour Division investigators, others gathered the farm laborers and instructed them to tell federal authorities the company never paid them less than legally required wages. If the workers did not lie during their interviews, their employer threatened to send them home to Mexico and Guatemala and not invite them back to work in future growing seasons.

Despite their attempt to intimidate the workers and impede an investigation, the company will pay 89 Mexican and Guatemalan guest workers $250,000 in back wages for work at the Columbus produce farm. Daniels Produce will also pay $20,000 in civil penalties for violating provisions of the H-2A temporary worker visa program, which allows employers to bring nonimmigrant foreign workers to the U.S. for agricultural labor.

“Daniels Produce clearly intimidated these workers and violated the provisions of the visa program. Employers that attempt to circumvent the law gain an unfair advantage over their competitors,” said Karen Chaikin, regional administrator of the Wage and Hour Division in Chicago. “We are glad that these workers are getting the wages they worked so hard to earn, and that our enforcement tools can protect not only workers’ rights, but also level the playing field for growers who play by the rules.”

Investigators found Daniels Produce violated the H-2A visa provisions by:

• Falsifying records to indicate they paid the legally required minimum wage for workers under the visa program.
• Giving preferential treatment to H-2A workers,  paying them more than others, including U.S. citizens, employed in similar jobs.
• ­Failing to reimburse H-2A workers for the cost of their inbound/outbound transportation and subsistence expenses.
• Failing to provide complete earning records to employees.
• Failing to properly insure vehicles used to transport workers.

The company employed the workers during the 2012 and 2013 seasons to pick and pack produce grown in its 500-acre fields near Columbus.

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.

ALBUQUERQUE, N.M. – The U.S. Department of Labor’s Wage and Hour Division is conducting survey of building and heavy construction projects in seven New Mexico counties to help establish prevailing wage rates as required under the Davis-Bacon and Related Acts.

The division is collecting data on wages paid to workers on all active building and heavy construction projects statewide from March 1, 2015, to Feb. 29, 2016. The survey is not limited to federally funded projects.

“Survey participation is crucial to the process, and should reflect the wages and fringe benefits paid to construction workers in the county where they work. To ensure workers are paid fairly and legally, we need the full participation of New Mexico’s construction industry community,” said Betty Campbell, the Wage and Hour Division’s regional administrator in the Southwest.

Without a high level of survey participation, the state’s wage rates will not reflect actual wages and will prevent proper wage determinations, leading to an increase in requests for additional classifications. Wage data should be submitted for all projects meeting the criteria, regardless of how they are funded. The seven counties affected by the survey are: Dona Ana, Bernalillo, Sandoval, Torrance, Valencia, San Juan and Santa Fe.

The division urges industry employers to participate to:

• Ensure Davis Bacon wage rates and fringe benefits represent a truly prevailing wage.
• Level the playing field for all contractors bidding on federally funded construction

Your participation makes a difference.

The division is sending notification letters and “WD-10” data collection forms to interested parties and contractors of which it is aware. Data must be postmarked by Dec. 2, 2016, to be included in the survey. Participants may also complete the survey online at http://www.dol.gov/whd/programs/dbra/wd10/index.htm.

You do not need a letter to answer the survey. If you would like to participate, or have questions regarding the survey process and forms, contact Craig L. Jackson at (214) 749-2021.

Employer: Unique Custom Exteriors

Site: 9326 South Hawley Park Road #A, West Jordan, Utah 84088

Investigation Findings: A U.S. Department of Labor Wage and Hour Division investigation found Unique Custom Exteriors violated the overtime provisions of the Fair Labor Standards Act. The investigation by the division’s Salt Lake City District Office revealed the employer failed to pay for all of the overtime hours employees worked.  Specifically, the employer reduced the total number of overtime hours worked by one-third on the payroll.

Resolution: The construction contractor paid $31,833 in back wages for unpaid overtime and an equal amount in liquidated damages, for a total of $63,666 to 27 employees. The company agreed also to comply with all provisions of the FLSA in the future. 

Quote: “Construction workers have some of the toughest jobs in the country,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “Often doing hard work in harsh conditions, these employees deserve to be paid for all the time they spend working, including overtime.  Reducing the number of overtime hours worked by one third essentially eliminates the time-and-one half premium for those hours that the law requires.  The resolution of this case demonstrates that the division will root out and remedy these violations, protecting the workers and leveling the playing field for contractors who play by the rules.”

Background:  Unique Custom Exteriors specializes in stucco and other exterior surfaces on residential and commercial properties.   

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 Salt Lake City District Office at 801 524-5706. Information is also available at http://www.dol.gov/whd/.

DENVER – Officials from the U.S. Department of Labor and the U.S. Department of Housing and Urban Development signed a Memorandum of Understanding to help stop the misclassification of workers in Colorado, Montana, North Dakota, South Dakota, Utah and Wyoming.

The first MOU of its kind represents a new effort on the part of the agencies to work together to protect employee rights and level the playing field for responsible employers by reducing the practice of misclassification.

In Fiscal Year 2015, the department’s Wage and Hour Division recovered more than $74 million in back wages for more than 102,000 workers in industries, such as janitorial, food, construction, daycare, hospitality and garment. The division regularly finds low-wage workers are victims of misclassification.

“The Wage and Hour Division stands together with the U.S. Department of Housing and Urban Development to protect workers and responsible employers and ensure everyone has the opportunity to succeed,” said Dr. David Weil, administrator of the Wage and Hour Division. “Misclassification deprives workers of rightfully earned wages and undercuts law-abiding businesses.”

The agreement will help both agencies communicate and cooperate more effectively and efficiently in areas of common interest, including cross training staff and providing employers and employees with information about the law. By doing so, the two agencies seek to protect the wages, safety, and health of America’s workforce by sharing information.

“In recent years, our division has worked with partners like HUD to address the problem of employee misclassification in the construction industry,” said Betty Campbell, the Wage and Hour Division’s regional administrator for the Southwest. “The MOU we announce today allows us to work more closely to educate workers and employers and improve compliance in the industry.”

“Region 8 is proud to strengthen our partnership and collaboration with the U.S. Department of Labor,” said HUD Regional Administrator Rick M. Garcia. “With all the complexities of labor laws and labor standards impacting new residential construction today, working closely with the department provides our customers and our staff with more efficient and effective means for success.”

While legitimate independent contractors are an important part of the national economy, misclassification of employees is a serious problem. Workers misclassified as independent contractors are often denied access to critical benefits and protections, such as family and medical leave, overtime compensation, minimum wage pay and unemployment insurance, to which they are entitled. In addition, misclassification cheats law-abiding business owners, who often find it difficult to compete with those who are skirting the law. More information is available on the Department of Labor’s misclassification website at http://www.dol.gov/misclassification/.

To learn more about the FLSA’s requirements, call the Wage and Hour Division’s toll-free hotline at 866-4US-WAGE (487-9243) or visit its website at http://www.dol.gov/whd/.

Employer name: Makin’ Choices Inc.

Investigation site: 2000 Chapel Hill Road, #23, Durham, North Carolina 27707

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division found that Makin’ Choices and its owner, Rachelle Brooks-Blue and manager Lamont Adams, violated the anti-retaliation provision of the Fair Labor Standards Act.

Specifically, the department alleges that the employer demanded two workers return back wage payments they received from an earlier division investigation. As a result of the earlier investigation, the employer entered into a settlement and compliance agreement to pay over $100,000 for overtime and minimum wage violations. Employed as habilitation specialists, the workers refused to return the back wage payments and the employer reduced their pay to recover the money. The demand to return the back wages and reduction in pay violate the anti-retaliation provisions of the FLSA.

Resolution: On Aug. 17, 2016, the department filed a complaint in the U.S. District Court for the Middle District of North Carolina, Durham Division, against Makin’ Choices Inc., its owner and its manager. The agency is seeking to compel the employers to pay the two employees, who were retaliated against, back wages and an additional equal amount in liquidated damages. When conducting the investigation regarding retaliation, the agency discovered that the employers continued to violate of FLSA overtime regulations. These new violations resulted in four employees, including the two employees retaliated against, being due overtime back wages and liquidated damages.

The division’s Raleigh District Office conducted the investigation and the department’s Atlanta Regional Office of the Solicitor is litigating the case.

Quote: “We look forward to helping these workers find justice and will continue to protect the rights of all workers to speak up,” said Wayne Kotowski, regional administrator for the Wage and Hour Division in Atlanta. “Employers must understand they cannot retaliate against an employee who has been wronged. We will continue to use every tool we have to make that clear. Shorting workers once is bad enough, but we simply will not tolerate attempts to retaliate after we’ve stepped in to recover the wages they’ve worked so hard to earn.”  

Based in Fayetteville, Makin’ Choices provides mental health and therapeutic support services. The employer also operates a facility in Durham.

The FLSA states that it is a violation for any person to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this Act, or has testified or is about to testify in any such proceeding, or has served or is about to serve on an industry committee.

Court: U.S. District Court for the Middle District of North Carolina, Durham Division

Case Number: 1:16-cv-01065

ST. LOUIS – Significant minimum wage and overtime violations found at three hotels owned by SASAK Corporation, led the company to sign a settlement agreement with the U.S. Department of Labor’s Wage and Hour Division. The agreement requires the St. Louis-area property manager, developer and investor to pay $200,000 in back wages and damages to 51 housekeepers, front desk clerks and laundry service employees. SASAK will also make significant changes in its business practices to ensure compliance with the Fair Labor Standards Act.

Investigators found violations at two St. Louis hotels, the Super 8 on Charles Rock Road and the Robinson Motel on Page Avenue; and at the Howard Johnson hotel on East Diamond Drive in Salina, Kansas – all of which are owned and controlled by SASAK.  

The investigations found SASAK violated minimum wage, overtime and recordkeeping requirements of the FLSA at the three properties when it labeled housekeepers and front-desk employees as managers, and then payed them flat salaries without regard to the number of hours they worked. Minimum wage violations resulted when those salaries, divided by the number hours employees actually worked, failed to cover all of their hours at the federal minimum wage of $7.25 per hour. Overtime violations occurred when the employees worked more than 40 hours in a week yet the employer failed to pay an overtime premium. Many of these workers resided on the premises and were expected to be available around-the-clock. Other housekeepers were paid on an hourly or piece rate (per room) basis, and were denied minimum wage and overtime when the employer failed to record or pay for all of the hours that they worked, as required by law.  

“The resolution of this investigation is a win for workers and for law-abiding employers,” said Karen Chaikin, regional administrator for the Wage and Hour Division in Chicago. “The violations found in this case are all-too-common in the hotel industry, where we often find some of the most vulnerable workers we see. Simply paying workers a salary does not mean they are not entitled to minimum wage and overtime. This case sends a clear message that the Wage and Hour Division is committed to using every enforcement tool we have to ensure workers receive every penny they have rightfully earned, and that employers compete on a level playing field.”

The agreement requires the employer to implement enhanced FLSA compliance measures as part of its employment practices, including:

• Adding a notation to the required FLSA poster that informs employees of the name and telephone number of the local Wage and Hour office to call if they have questions regarding their rights under the FLSA.
• Training employees on the employer's record-keeping requirements.
• Providing Wage and Hour Division publications to employees to keep them informed of their rights.

Based in St. Louis, SASAK Corporation specializes in the acquisition, design, development, and management of more than 60 properties in its portfolio which includes shopping centers, office buildings, motels, vacant land, fast food restaurants, mini-storage facilities, gas stations and condominiums.

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.

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 hourly rates for hours worked beyond 40 per week. The FLSA provides that employers who violate the law are, as a general rule, 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, visit https://www.dol.gov/whd or call the division’s toll-free helpline at 866-4US-WAGE (487-9243).

Type of Action: Fair Labor Standards Act lawsuit filing 

Name of Defendants: Austin Electric Services LLC
Toby Thomas

Complaint: The U.S. Department of Labor has filed a lawsuit against Austin Electric Services, and its president Toby Thomas, after the department’s Wage and Hour Division investigators found the Phoenix-area residential electrical contractor violated the Fair Labor Standards Act’s provisions on overtime and recordkeeping. The latest investigation marks the third time in the past five years the department has found this employer in violation of federal labor laws.

Filed in the U.S. District Court for the District of Arizona, the complaint alleges the defendants willfully and repeatedly violated – and continue to violate – the FLSA’s overtime and recordkeeping provisions by failing to pay some electricians overtime. Instead, the firm pays workers a piece rate, without regard to how many hours they work.  The complaint also alleges that Austin Electric and Thomas knowingly provided the department with falsified records of hours worked. The department also alleges managers instructed electricians who worked between 45 and 70 hours per week to record only 40 hours or less of work on their timesheets.

Resolution: The complaint seeks the payment of overtime back wages and an equal amount in liquidated damages for 200 employees, and also asks the court to enjoin the company and its owners from violating the FLSA in the future.  

Quote: “We will not tolerate an employer that continues to violate the law and deprive workers of their hard-earned overtime wages,” said Eric Murray, director of the Wage and Hour Division’s district office in Phoenix. “The fact that we have found Austin Electric in violation multiple times in the last five years makes their actions all the more egregious. This lawsuit demonstrates that we will use every enforcement tool available to us, and that we will follow through to hold employers accountable and to ensure that workers are paid every penny they have rightfully earned.”  

Background: The division investigated Austin Electric in 2012 and found the employer misclassified field electricians and other workers as independent contractors. A 2013 follow-up investigation resulted in $23,885 in back wages due to 72 employees misclassified again as independent contractors. Most of the back wages due were the result of overtime violations. In 2013, Austin Electric also paid $9,424 in penalties for the willful nature of the violations found.

Information: The FLSA requires that covered, non-exempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records, and 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.

BUCKHANNON, W.Va. – The U.S. Department of Labor’s Wage and Hour Division has revoked a West Virginia nonprofit’s ability to pay less than the current federal minimum wage to workers with disabilities after federal investigations found the organization violated provisions of the Fair Labor Standards Act and McNamara-O’Hara Service Contract Act.

The division found that Buckhannon-Upshur Work Adjustment Center – a non-profit community rehabilitation program – violated the FLSA’s section 14(c) when it failed to pay a valid subminimum wage to 12 workers with disabilities employed to do light assembly production.

The company paid 12 workers $43,370 in back wages for this violation. Additional FLSA section 14(c) violations included failure to perform annual prevailing wage surveys, and failure to conduct required time studies. Buckhannon-Upshur Work Adjustment Center also paid a civil money penalty for willfully violating the FLSA.

The investigation also revealed that the employer submitted falsified and/or inaccurate time studies and prevailing wage surveys to obtain 14(c) certification from the division. This certification allows the employer to pay wages less than the federal minimum wage to workers with disabilities when their disabilities impair their productive capacities for the work they perform. This action, in conjunction with the company’s history of violations, led the division to revoke the employer’s current and previous section 14(c) certificates for the period of Sept. 1, 2012, through Aug. 31, 2016. 

The division also found the center owed five workers an additional $4,795.84 due to SCA violations. The employer failed to adjust the prevailing wage and health and welfare benefit rates on the contract renewal date, as required, and illegally paid a subminimum wage to a worker with a disability.

“This investigation is part of an ongoing strategic enforcement initiative designed to protect workers with disabilities from exploitation. The back wages received by these workers, and the money they will earn by being paid legally, will have a significant positive impact on their lives,” said John DuMont, director of the Wage and Hour Division’s Pittsburgh District Office. “The resolution of this case should send a strong message – we take our mission very seriously, and will not hesitate to use every enforcement tool available, including revocation of certificates, to ensure that employers do not exploit our most vulnerable workers. Failing to comply with the law is not acceptable.”

Buckhannon-Upshur agreed to the following:

• Comply with all applicable provisions of the FLSA in the future.
• Not to contest the revocation of the current or prior subminimum wage certificates.
• Pay all back wages due.
• Require staff to attend 14(c) training within the next year.
• Use the division’s online section 14(c) calculators for their next two full certificate applications, which will be required prior to any future certifications being granted. 
• Educate their organization through use of the department’s online presentations.
• Take actions needed to protect employees’ eligibility for public benefits, including providing employees with benefits planning information and counseling.

The division’s Pittsburgh District Office conducted the investigation.

In general, the FLSA requires that covered, non-exempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rate of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per workweek. Section 14(c) of the act allows employers, after receiving a certificate of authorization from the division, to pay wages less than the federal minimum wage to workers with disabilities when their disabilities impair their productive capacities for the work being performed.

The division has been pursuing strategies to strengthen compliance with section 14(c) and maximize the impact of its benefits for workers with disabilities, their employers, families and communities. These strategies include using all available enforcement tools to remedy and deter future violations; providing new compliance assistance materials and tools; and hosting compliance conferences for employers, community rehabilitation programs, advocates, workers and other interested parties.

Information about subminimum wages paid to workers with disabilities can be found at http://www.dol.gov/whd/regs/compliance/whdfs39.pdf.

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 is also available at http://www.dol.gov/whd/.

Type of Action: Fair Labor Standards Act lawsuit filing

Name of Defendants: West Coast Drywall & Company Inc.
Mark D. Herbert
Santos Garcia

Complaint: The U.S. Department of Labor has filed a lawsuit against West Coast Drywall & Company, its chief executive officer and owner Mark D. Herbert, and the company’s chief operating officer Santos Garcia, after an investigation by the Wage and Hour Division uncovered that the employer violated, and continues to violate, overtime and recordkeeping provisions of the Fair Labor Standards Act.

The division already investigated West Coast Drywall & Company in 2012. That investigation determined that the employer failed to pay overtime to drywall employees and painters, resulting in $9,115 in back wages due to 101 employees. The employer agreed to make all necessary changes to comply with the FLSA.

The latest investigation revealed that the Riverside-based drywall installation and painting employer again failed to pay workers time and one-half their regular hourly rates for all the hours they worked beyond 40 in a workweek, which they did routinely. Supervisors regularly told employees to falsify timecards to reflect no more than 40 hours when, in fact, they worked more than 40 hours in a workweek. In addition, investigators found the company asked some workers to sign untrue statements – once the investigation was underway – claiming their employer always paid properly for overtime.

Resolution: The department seeks a judgment ordering the employer to pay the overtime back wages due and an additional, equal amount of damages to the workers. The complaint also asks the court to enjoin the company and its officers from violating the FLSA in the future.  

Quote: “Unfortunately, West Coast Drywall chose to ignore our guidance after our investigation in 2012,” said Gayane Aleksanian, assistant district director of the Wage and Hour Division in West Covina. “The company left us no choice but to take legal action to make sure that their workers receive their hard-earned wages. We’re sending a clear message that compliance is not optional, and that the division will use every enforcement tool we have to protect not only workers, but other employers who play by the rules.”

Background: West Coast Drywall & Company provides services to a number of builders, including Lennar Homes, Shea Homes, KB Homes, Standard Pacific and HR Horton.

Information: The department filed the complaint in the U.S. District Court for the Central District of California on July 18. The department’s regional Office of the Solicitor in Los Angeles is litigating the case.

The FLSA requires that covered, non-exempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records, and 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.

OVERLAND PARK, Kan. – An Overland Park flooring company that misclassified installers as independent contractors will pay 22 workers a total of $159,144 – representing $79,572 in back wages plus an equal amount in liquidated damages – after a U.S. Department of Labor Wage and Hour Division investigation.

The division found Uni Floor Inc. violated overtime and recordkeeping requirements of the Fair Labor Standards Act when it failed to pay installers overtime after treating them as independent contractors instead of employees. 

The investigation determined the flooring installers met the definition of employees, triggering overtime protections under the FLSA. The company violated the FLSA’s recordkeeping requirements when it failed to maintain time records for these employees. In this case, Uni Floor provided the equipment used by the workers, controlled their day-to-day schedules and paid them flat salaries. The employer also bid for all work and supervised job sites daily. 

“Far too often, employers misclassify workers as independent contractors when the law defines them as employees. In this case, Uni Floor denied workers overtime for hours worked over 40 per week and access to employee benefits, unemployment insurance and the payment of federal and state taxes on the worker’s behalf,” said Brad Bobowski, acting district director for the Wage and Hour Division in Kansas City. “We are committed to rooting out misclassification and, as this case shows, will take enforcement actions needed to achieve that goal.”

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

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

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