Type of Action: Consent judgment

Defendant(s): Victor Paving and Construction Inc., and Victor Zeni

Resolution: Victor Paving and Construction Inc. will pay 11 employees $51,302 in back wages and an equal, additional amount in liquidated damages totaling $102,604  under the terms of a consent judgment entered in the U.S. District Court for the Western District of Pennsylvania on April 1, 2016.

The judgment resolves a lawsuit filed after an investigation by the U.S. Department of Labor’s Wage and Hour Division, which alleged that the employer violated the Fair Labor Standards Act’s overtime and recordkeeping provisions.

Investigators found that, from September 2012 to September 2015, Victor Paving failed to pay employees working as members of its road crew legally required overtime, but instead falsified time and payroll records to create the appearance no overtime was worked. The employer recorded fewer than 40 hours on the payroll, but inflated hourly rates to compensate for the unrecorded hours, at straight time rates. For example, a worker who actually worked 60 hours, at $10 per hour, and who should have received overtime for the hours worked beyond 40, would instead show up on the payroll as having worked only 30 hours, but at $20 per hour.

The division previously investigated the company three times for failing to pay workers the proper FLSA wages. As a result, the employer was also assessed a $12,100 civil money penalty by the division for the repeat and willful violations disclosed in this latest investigation.

Quote: “Victor Paving has clearly made a practice of taking advantage of the vulnerable, low-wage workers it hires by undercutting their wages,” said John DuMont, director of the Pittsburgh Wage and Hour District Office. “This employer went to great lengths to conceal the overtime worked by its employees. The resolution of this case sends a clear message that the Wage and Hour Division will not tolerate repeat violators of the law, and will use every enforcement tool available, including litigation, to ensure that workers are paid every penny they have rightfully earned.”

Background: Founded in 1977, Victor Paving and Construction Inc. is a highway and street construction company located in Monongahela.

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 and other federal wage laws, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

# # #

Perez v. Victor Paving & Construction Inc., et. al.

Civil action number: 2:16-CV-00383

Court: U.S. District Court for the Western District of Pennsylvania

Employer: Leo’s Recycling, a Southern California recycling company

Sites: 9306 Cayuga Avenue, Sun Valley
22115 Sierra Highway, Sylmar
12210 Foothill Boulevard, Panorama City
11631 Victory Boulevard Panorama City
9110 Van Nuys Boulevard Panorama City

Investigation findings: Investigators with the U.S. Department of Labor’s Wage and Hour Division found that the company failed to pay employees time-and-one-half for overtime hours, in violation of the Fair Labor Standards Act. Specifically, the employer paid workers flat salaries, without regard to how many hours they worked, which created overtime violations when employees worked more than 40 hours in a week. The company also failed to keep time records for employees.

Resolution: The defendants – Leo’s Recycling, Brigida Rios and Gloria Cordova – agreed to pay a combined $90,000 to 21 employees in back wages and damages in a consent judgment entered in U.S. District Court for the Central District of California.

In addition to paying back wages and damages, the employer further agreed to:

• Post a portion of the consent judgment describing workers’ legal rights in all of their locations.
• Provide workers with summary of work hour for each pay period, to include language describing what constitutes compensable work time, and provide them with an opportunity to correct any errors.
• Host wage and hour training, provided by the department, for all employees.

Quote: “This employer profited off the backs of these low-wage, vulnerable workers who worked long, hard hours, and deserve to be paid every penny they have rightfully and legally earned,” said Susan Seletsky from the department’s Regional Solicitor’s Office. “When employers such as Leo’s Recycling fail to comply, we will use every tool available to us, including litigation, to ensure that the employees are paid their fair wages. We are committed to leveling the playing field for employers who do play by the rules.”

Background:  The department issued a press release in 2015 chronicling the high rates of wage and hour violations in Southern California’s recycling industry.

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/.

Read this news release en españól.

Employer: Allstars Staffing LLC, an agency providing workers to local resorts and hotels

Location: 925 East Hermosa Drive, Tempe, Arizona

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found Allstars Staffing LLC misclassified hundreds of servers, bussers, cooks, dishwashers and banquet staff as independent contractors rather than employees. As a result, the employer failed to pay overtime when these employees worked more than 40 hours in a workweek, in violation of the Fair Labor Standards Act.

The staffing agency paid overtime only when an employee worked at the same hotel for the entire workweek and the hotel client agreed to pay the required time and a half. Many employees worked more than 40 hours but worked at more than one hotel for the staffing agency during the week. In those instances, the employer failed to pay overtime. The affected employees worked at Phoenix-area hotels, including Tempe Mission Palms, Sheraton, and Fairmont Scottsdale Princess.

Resolution: Allstars Staffing will pay $75,683 in overtime back wages and an equal, additional amount in damages to 275 employees. The employer will also pay a $22,094 civil penalty because of the willful nature of the violations found.

Quote: “Staffing agencies and their employer clients share responsibility to ensure that all employees working on their behalf are paid the wages they are entitled to by law,” said Eric Murray, director of the Wage and Hour Division in Phoenix. “These violations are all too common in the hotel industry. Our agency will do everything in its power to end the willful misclassification of employees as independent contractors. This practice deprives workers of basic wage and employment rights and allows an employer to illegally spare the costs of full wages, payroll taxes and other employment related expenses. This cheats not just the workers and their families – it also the undercuts the competition.”

Information: Misclassifying employees as independent contractors or some other nonemployee status often denies them minimum wage, overtime, workers’ compensation, unemployment insurance and other workplace protections. Employers often intentionally misclassify workers to reduce labor costs and avoid employment taxes. For more information about federal wage laws administered by the Wage and Hour Division, or to file a complaint, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). All services are free and confidential. Information also is available at http://www.dol.gov/whd/.

Employer name: BC Stucco and Stone, 36 Marian Court, Upper Darby, Pennsylvania

BC Stucco and Stone was hired to provide labor for a store remodeling job. Schorn Construction Co. Inc. was the general contractor.

Inspection site: Route 40 and Salem Church Road, Bear, Delaware

Citations issued: On May 20, 2016, the U.S. Department of Labor’s Occupational Safety and Health Administration issued citations to BC Stucco for one serious and three willful violations.

Inspection findings:  On Nov. 25, 2015, an OSHA compliance officer observed BC Stucco employees working approximately 18 feet above ground on a scaffold with major safety deficiencies, such as lack of fall protection, planking, safe access and proper use of guardrails, prompting an investigation.

The agency found willful violations when BC Stucco and Stone:

• Allowed workers on scaffolds approximately 18-feet high that were not fully planked or decked.
• Used a scaffold without a safe means of access and exit.
• Used a scaffold with unguarded edges and without guardrails, creating fall hazards up to approximately
  18 feet.
• Failed to provide scaffolding related safety training by a competent person to each employee working from scaffolding. 

The serious citation was due to the company not providing and requiring employees to wear head protection while conducting stucco operations on a fabricated frame scaffold. 

OSHA previously cited BC Stucco and Stone on May 2, 2016, for violations at a Philadelphia work site.

Quote: “BC Stucco and Stone continues to make production the priority over ensuring a safe workplace for its employees, which is intolerable. This contractor is well aware of OSHA standards for safe scaffolding, but consistently disregards them and allows its workers to use scaffolding in such poor condition that even a small human error could lead to dreadful outcomes,” said Erin Patterson, director of OSHA’s Wilmington Area Office.

Proposed penalties: $93,000

The citations can be viewed at: http://www.osha.gov/ooc/citations/BCStuccoandStone_1108487.pdf

The employer has 15 business days from receipt of its citations and proposed penalties to comply, request a conference with OSHA’s area director or contest the findings before the independent Occupational Safety and Health Review Commission.

To ask questions; obtain compliance assistance; file a complaint; or report amputations, eye loss, workplace hospitalizations, fatalities or situations posing imminent danger to workers, the public should call OSHA’s toll-free hotline at 800-321-OSHA (6742) or the agency’s Wilmington Area Office at 302-573-6518.

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, and providing training, education and assistance. For more information, visit http://www.osha.gov.

Participants: U.S. Department of Labor’s Wage and Hour Division
South Dakota Department of Labor and Regulation

Partnership description: The U.S. Department of Labor’s Wage and Hour Division and the South Dakota Department of Labor and Regulation 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 joint investigations and sharing information consistent with applicable law.

Background: The division is working with the U.S. Internal Revenue Service and 29 other 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 of basic rights such as minimum wage, overtime and a host of other benefits. Misclassification also generates substantial losses to the federal government and state governments in the form of lower tax revenues, as well as to 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 campaign, 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

“South Dakota is committed to both protecting workers’ rights and providing a fair business environment for our state’s employers,” said South Dakota Labor and Regulation Secretary Marcia Hultman. “Our partnership with the Wage and Hour Division will increase proper classification of workers.”

Marcia Hultman, Secretary of Labor and Regulation, South Dakota

BATON ROUGE, La. – A Louisiana subcontractor was paying laborer’s wages to Karl Fusilier, a plumber working on the $8 million, federally funded Choctaw Lodge project in Baton Rouge. While the law requires his employer to pay him and co-workers as plumbers for skilled plumbing work, U.S. Department of Labor investigators say the subcontractor misclassified the three as “laborers,” cheating them of nearly $11 per hour.

An investigation by the department’s Wage and Hour Division investigation found Pete’s Plumbing of Livingston Parish LLC in violation of Davis Bacon and Related Acts which requires employers to pay prevailing wages on federally funded projects. Ninety-two individual units in seven, two-story buildings, Choctaw Lodge is a project of the U.S. Department of Housing and Urban Development. Our Plan B. Inc. is the project’s prime contractor.

Initiated by the division’s New Orleans District Office, investigators determined the Denham Springs plumbing company illegally classified the three workers as laborers while their work included using plumbing tools, and installing and extracting all plumbing piping, valves and fittings underground and behind walls. As laborers, they earned between $18 and $25.54 per hour, well below the prevailing wage rate of $36.27 per hour owed to plumbers, including required fringe benefits.

Following the investigation, Pete’s Plumbing agreed to pay $33,951 in back wages to Fusilier and his co-workers.

“Companies awarded federal contracts must comply with all applicable laws,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “When a company, especially the prime contractor, enters into a contract with a federal agency, they agree to pay all workers the prevailing wages for that area. The agreement includes the workers for all subcontractors. Classifying an employee incorrectly as a ‘laborer’ who performs the work of a skilled tradesperson using the tools of the trade cheats the worker, their family and the company’s competitors.”

Fusilier said the back wages he received came at just the right time for him. “This is a blessing!” he said. With the money, Fusilier plans to fix his house’s roof, replace worn tires on his truck, put some money in the bank, and, take a well-deserved vacation and go fishing at the camp. 

The Fair Labor Standards Act 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.

The DBRA requires all contractors and subcontractors performing work on federal and certain federally funded projects to pay their laborers and mechanics the proper prevailing wage rates and fringe benefits, as determined by the secretary of labor. On a DBRA project, the prime contractor is responsible for the compliance of subcontractors and lower-tier subcontractors.

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/.

Type of Action: Fair Labor Standards Act consent judgment

Names of Defendants: Tian Li Restaurant Inc., doing business as Ming Ten Restaurant
Jin Ling Ren
Shi Ju Xing

Complaint: Under terms of a consent judgment, Tian Li Restaurant Inc., operating as Ming Ten Restaurant in Grand Rapids, Michigan, and its owners and managers, Jin Ling Ren and Shi Ju Xing, have agreed to comply with the Fair Labor Standards Act’s recordkeeping requirements.

An investigation by the U.S. Department of Labor’s Wage and Hour Division determined since its incorporation in January 2014 Ming Ten Restaurant, and its owners and managers failed to keep legally required records of:

• The number of hours worked daily and weekly by all employees.
• Total daily and weekly earnings of all employees.
• Employee information including full names, addresses, occupation and shifts worked, dates of hire and hourly rates or salaries.

Resolution: The consent judgment, entered with the U.S. District Court, Western District of Michigan, Southern Division, enjoins the defendants from violating FLSA recordkeeping provisions and requires the employer to:

• Provide employees with a pay stub each pay date that includes total hours worked and paid, and total earnings at their regular rate, overtime rate, gross amounts paid, tips received, and if applicable, any deductions taken.
• Display in a place visible to employees both the Federal FLSA poster  (in English, Spanish and Mandarin) and the State of Michigan General Requirements Minimum Wage and Overtime Poster.

Under terms of a separate agreement, the company will also pay a total of $45,423 in unpaid overtime and minimum wages to 12 employees who worked as servers, buffet attendants and kitchen staff following the Wage and Hour investigation.

Quote: “Too often, restaurant workers do not receive the pay they have rightfully earned because the employer’s records do not accurately reflect the hours they have worked,” said Mary O’Rourke, district director for the Wage and Hour Division in Grand Rapids. “Some employers intentionally fail to keep records as a part of their efforts to avoid paying the wages they are legally responsible for paying. This judgment illustrates how seriously the Wage and Hour Division takes this issue – we will continue to use every tool available to us, including litigation, to ensure that employers hold up their end of the bargain and record and pay for every hour an employee works.”

Information: The FLSA requires that employers pay covered, nonexempt employees at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular hourly rates for hours worked beyond 40 per week. Additionally, the law requires employers to maintain accurate time and payroll records and prohibits retaliation against employees who exercise their rights under the law. For more information about the FLSA and other federal wage laws, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at www.dol.gov/whd/fmla.

Court: U.S. District Court for the Western District of Michigan

Docket Number: 1:16-cv-432

SAN FRANCISCO – A federal judge has ordered the owner of a Bay Area taxi and limousine service to pay a collective $175,000 in back wages and damages to dozens of drivers who the company misclassified as independent contractors and failed to pay minimum wage and overtime pay as federal law requires. 

The order entered in U.S. District Court for the Northern District of California follows years of denial by Sayed Abbas – owner of the Mountain View-based Stanford Yellow Taxi Cab, Inc. and AAA Legacy Limousine, Inc. – that his drivers were employees, not independent contractors.

The action culminates a long-contested dispute with the U.S. Department of Labor. In addition to accepting the ruling that his drivers are, in fact, employees, Abbas also admitted that he and his companies violated the minimum wage, overtime, and recordkeeping provisions of the Fair Labor Standards Act.

In May 2015, Judge Edward J. Davila found Abbas and his companies misclassified its drivers as independent contractors. He also supported the contention by the department’s Wage and Hour Division that the companies’ management retaliated against drivers and interfered with the division’s investigation.

“The court’s decision confirms what we’ve maintained all along: that Stanford Yellow Taxi Cab and AAA Legacy Limousine drivers are indeed employees who should be paid and afforded all of the benefits federal law requires,” said Susana Blanco, director of the department’s Wage and Hour Division office in San Francisco. “This case shows again that we will go to great lengths and do what’s needed to see that workers receive a fair day’s pay for a fair day’s work.”

“We see far too many employers misclassifying employees as independent contractors to avoid their obligation to pay the minimum wage and comply with worker protection and tax laws. Misclassification hurts workers and their families, cheats taxpayers and industry competitors,” said Janet Herold, solicitor for the department’s Western Region. “Employers like Sayed Abbas take advantage of vulnerable workers by making them sign sham independent contractor agreements that mask actual working conditions. The court’s order underscores that an employer cannot demand economic dependence from workers while also denying those workers their required wages under the Fair Labor Standards Act.”

Some employers intentionally misclassify their workers as independent contractors to reduce labor expenses.  Once an employer ceases to consider a worker an employee, they wrongfully reduce their payroll expenses by neglecting to make legally-required contributions to unemployment insurance and workers’ compensation funds. By misclassifying their workers, employers also avoid remitting payroll taxes, resulting in huge losses to state treasuries, and the federal Social Security and Medicare programs.

Stanford Yellow Taxicab and AAA Legacy Limousine required drivers to work six days per week for 12-hour shifts and only paid the drivers a percentage of their fares, taking no measures to ensure the drivers received at least the minimum wage for all hours worked. The companies also did not allow drivers to change their schedules or operate independently by reaching out directly to passengers. Drivers also had to abide by a dress code.

Stanford Yellow Taxicab Inc. and AAA Limousine Inc. provide transportation services in Silicon Valley.

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

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

Type of Action: Consent judgment

Defendant(s): Ferry Carpets Inc., Alina Lolo, and Antonio Lolo

Resolution: Flooring company Ferry Carpets Inc. will pay 15 employees $140,000 in back wages and $140,000 in liquidated damages under the terms of a consent judgment entered in a U.S. District Court for the District of New Jersey in Newark on May 24.

The judgment resolves a lawsuit that followed an investigation by the U.S. Department of Labor’s Wage and Hour Division, which alleged that the employer violated the Fair Labor Standards Act’s overtime and recordkeeping provisions.

Investigators found that, from February 2013 to February 2015, Ferry Carpets:

• Paid employees who worked as floor installers a fixed salary, without regard to how many hours they worked, resulting in overtime violations when they worked beyond 40 hours per week. These employees typically worked from 45 to 72 hours a week.
• Failed to pay employees for time spent loading vehicles or traveling from the employer’s location to the day’s first job site.
• Attempted to simulate FLSA compliance and conceal its failure to pay overtime premium rates by creating and submitting false records reflecting that employees worked 40 hours or less per week when it knew that employees were regularly working overtime hours.

As a result of the consent judgment, Ferry Carpets agreed to:

• Post and provide employees with information regarding their rights under the FLSA and how to contact the Wage and Hour Division if they believe the employer failed to pay them properly.
• Use a time clock or other automated record-keeping practice to accurately record employee work hours.
• For each workweek, prepare a statement of hours worked by each employee for each day, week, and pay period. Each employee must review, make corrections if necessary, and sign.
• Obtain the services of an independent, third-party examiner to audit the employer’s compliance with the FLSA, once, within six months from the entry of the consent judgment.

Quote: “The violations found in this case are all too common in this industry,” said John Warner, director of the Northern New Jersey Wage and Hour District Office. “Ferry Carpets denied these low-wage workers the wages they had rightfully and legally earned, profiting on the backs of their employees. This settlement demonstrates that the U.S. Department of Labor is determined to ensure that workers receive a fair day’s pay for a fair day’s work, and that employers who break the law do not get an unfair competitive advantage over those who play by the rules.”

Background: Founded in 1988, Ferry Carpets sells and installs commercial and residential carpeting, hardwood, laminate and vinyl flooring.

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 and other federal wage laws, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

Perez v. Ferry Carpets Inc., et al
Civil action number: 2:15-cv-03374

Court: U.S. District Court for the District of New Jersey, Newark

Employer: Molina Healthcare of New Mexico Inc.

Site: 400 Tijeras SE, Suite 200, Albuquerque, New Mexico

Investigation Findings: A U.S. Department of Labor Wage and Hour Division investigation found Molina Healthcare of New Mexico Inc. violated the overtime provisions of the Fair Labor Standards Act. The employer incorrectly applied an exemption from the FLSA’s overtime requirements, meant for salaried executive, administrative and professional employees, to case managers. To meet the criteria for exemption, employees must be paid a minimum guaranteed salary, and must perform job duties specific to that exemption. While case managers working for Molina Healthcare met the salary requirement, their job duties did not support the employer’s determination that these employees were exempt from overtime.

Resolution: Molina Healthcare of New Mexico will pay $701,855 in back wages to 409 employees, and will provide training to their managers on this issue.

Quote: “Denying workers their hard-earned overtime pay not only hurts them and their families, it also places law-abiding employers at a competitive disadvantage,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “This case should encourage other employers in this industry to take a close look at their own pay practices to ensure they are not paying workers in violation of the law. We will continue to educate employers and to conduct investigations to ensure workers receive a fair day’s pay for a fair day’s work.”

Information: For more information about the FLSA, 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/.