NEW YORK – Thirty-one workers employed on the federally funded cobblestone reconstruction project on Manhattan’s Peck Slip will receive $431,715 in back wages and interest following an investigation and litigation by the U.S. Department of Labor.

The department’s Wage and Hour Division found that the workers did not receive the proper prevailing wages and fringe benefits required under the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act.

Sam Schwartz Engineering, a first-tier subcontractor under prime contractor MFM Contracting Corp. employed the workers. Investigators found that the employees who worked as flaggers on the project were incorrectly classified. The division alleged that – between August 2011 and January 2014 – they were paid $15 to $25 per hour instead of the prevailing wage rate of $44.49 per hour. The investigation also found workers did not receive all the overtime they were due under CWHSSA when they worked more than 40 hours in a week, did not receive holiday pay and that they were not paid on a weekly basis, as required.

The department’s Office of the Solicitor filed an administrative proceeding in 2015 against MFM Contracting and Sam Schwartz Engineering. The case is now being resolved with a consent findings and order approved by the department’s Office of Administrative Law Judges. Under the order, workers from the Peck Slip project will receive $431,715 in unpaid wages.

“Prevailing wage standards provide a safety net of fair wages to workers, their families and communities and level the playing field for local contractors and subcontractors to compete,” said Wage and Hour Division Regional Administrator Mark Watson.

“Federally funded construction projects are ultimately funded by the taxpayers. It’s imperative that employees working on these projects be properly compensated. When that doesn’t happen, the Labor Department will pursue appropriate legal remedies on the workers’ behalf,” said Regional Solicitor of Labor Jeffrey Rogoff. “Our investigation and actions show the department’s commitment to enforcing these laws to protect both employers and employees. We will continue to use all of the enforcement tools at our disposal to ensure that taxpayer dollars used to fund such contracts are properly spent.”

Read the Consent Findings and Order and the Final Order.

The Davis-Bacon and Related Acts require 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. The Contract Work Hours and Safety Standards Act requires contractors and subcontractors on federal and federally assisted construction contracts over $100,000 to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rate of pay for all hours worked over 40 in a workweek.

The investigation was conducted by the Wage and Hour’s Division’s New York City District Office. Attorneys from the department’s Office of the Regional Solicitor in New York litigated the case for the division.

For additional information about these and other laws enforced by the Wage and Hour Division, call its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd/.

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In the Matter of:

MFM Contracting Corp., Prime Contractor
Sam Schwartz Engineering D.P.C., First-Tier Subcontractor
Sam Schwartz Engineering PLLC, First-Tier Subcontractor
Case Number: 2015-DBA-00029

BOSTON – Employees at United Plastics manufacturing plants in Leominster, Massachusetts, and Sardis, Mississippi, will receive a total of $1,433,618 in back wages and liquidated damages as part of a consent judgment and order obtained in federal court by the U.S. Department of Labor.

An investigation by the department’s Wage and Hour Division found that the Leominster-based plastic products manufacturer and ASI Staffing Group Corp., which supplied contract labor to United Plastics jointly employed and systematically underpaid employees at both plants over approximately a three year period by denying them the overtime pay they were entitled to under the Fair Labor Standards Act.

The investigation found that to avoid paying proper overtime, ASI Group developed a scheme under which they created additional company names. When employees worked more than 40 hours in a week, the overtime hours were recorded under a separate company name, and some or all of their overtime hours were paid at straight time rates. These contract employees worked as machine operators, maintenance workers, molding technicians, color mixers and quality control workers, often in excess of 48 hours per week.

The investigation disclosed that United Plastics and its principals were aware that ASI Group workers at the Massachusetts and Mississippi United Plastics plants were not being paid proper overtime. United Plastics and ASI Staffing also failed to maintain legally required records of the number of hours worked by the employees and the rates at which they were paid.

“Employers who use staffing agencies as a cover for short-changing workers of their hard-earned wages are breaking the law, plain and simple,” said Mark Watson, Jr. the Wage and Hour Division’s regional administrator. “Violations like this not only deprive workers of money they need to meet their living expenses, they also undercut law-abiding employers who pay their workers legally and play by the rules. The resolution of this case should send a strong message that employers can’t hide behind staffing agencies to avoid their responsibilities to their workers.”

Despite United Plastics’ use of a contractor to provide this labor, the Wage and Hour Division determined that it bears responsibility as a joint employer under the FLSA, and is liable along with ASI Group for the back wages, liquidated damages and penalties.

“This is an example of the changing nature of work in what can be described as a ‘fissured workplace’ – one where the employment relationship between the workers and the business receiving the benefit of their labor has fractured – it is no longer direct because the company has contracted out various activities to be performed by staffing agencies to cut costs,” said Michael Felsen, the Labor Department’s New England regional solicitor.  “In such arrangements, workers are frequently deprived of the full wages to which they’re entitled. And, as was true in this case, the company using the contract labor is often jointly responsible for compliance with the law as an employer, along with the staffing agency that provides the workers.”

The judgment, filed in the U.S. District Court for the District of Massachusetts, orders the defendants to:

• Pay 566 employees a total of $1,433,618 – $716,809 in back wages and an equal amount in liquidated damages – by December 2016.
• Pay $100,000 in civil money penalties to the U.S. Labor Department due to the willful and repeated nature of their violations.
• Hire expert consultants to create pay and recordkeeping systems to help ensure compliance with the FLSA. The consultants will provide quarterly progress reports to the Wage and Hour Division.

The wages and damages cover violations committed at the Massachusetts and Mississippi locations between November, 2011 and October, 2014. No violations were identified at the United Plastics Gilbert, Arizona location.

The complaint and consent judgment can be viewed here and here.  

The case was investigated by the Wage and Hour Division’s Boston District Office with assistance of the agency’s Jackson, Mississippi and Phoenix, Arizona, district offices, and the Boston regional office of the solicitor.  The complaint and consent judgment were filed by Boston solicitor’s office attorneys Susan Salzberg and Mark Pedulla.

As part of its strategic enforcement efforts, the department works with employers and industry stakeholders to provide compliance assistance and information on legal responsibilities.  The division also engages with worker centers, community organizations and other stakeholders, to raise awareness of the protections of federal labor laws and to encourage participation in promoting industrywide compliance. In this case, Metrowest Worker Center and Greater Boston Legal Services worked with the department to help ensure that affected workers received the protections to which they’re entitled.   

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

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

The Wage and Hour Division offers publications translated into many different languages. These include the following languages: Spanish, Vietnamese, Korean, Chinese, Thai, Haitian, Russian, Hmong, Tagalog, Polish, Brazilian Portuguese, Urdu, Hindi, Bahasa Indonesian, Somali, Samoan and Punjabi.

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Perez v. United Comb and Novelty Corp., doing business as United Solutions and United Plastics; Edward W. Zephir Jr., owner and president; Gregory Pojani, vice-president of operations and distribution; and John Bergeron, plant manager.

ASI Staffing Group Corp. doing business as ASI Group Corp.; and Mohammed (a.k.a. Eric) Islam, vice-president of operations.

Civil Action Number:  4:16-cv-40047-DHH.

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CINCINNATI, Ohio – Pipefitters and bricklayers constructing the Viking Village Shared Facility Pool in Sharonville under a federal contract will recover a total of $147,000 in back wages and benefits following an investigation by the U.S. Department of Labor’s Wage and Hour Division.

Federal investigators found Gall Construction of America LTD underpaid the workers up to $17 per hour in salary and benefits, and violated provisions of the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act, which govern wage rates for projects receiving federal funds. The company operates as Acapulco Pools.

The division determined the company classified 21 bricklayers and pipefitters as general labors and failed to pay prevailing wages, fringe benefits and overtime at the rate due for their job titles. Gall also failed to keep accurate time and payroll records for employees. To resolve these violations the company agreed to pay the workers the monies owed in back wages and benefits.

“When companies fail to follow the guidelines to which they agree when bidding a federal contract, they gain an unfair advantage,” said George Victory, director of the Wage and Hour Division’s Columbus District Office. “The payment of these hard-earned back wages will make a big difference in the lives of these workers and their families.”

The pool construction was funded by The American Recovery and Reinvestment Act.

Gall Construction was the project’s prime contractor. The Canadian company is based in Kitchener, Ontario.

The DBA 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 DBA project, the prime contractor is responsible for the compliance of subcontractors and lower-tier subcontractors

The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts over $100,000. These require contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rates of pay for all hours worked over 40 in a workweek.

For more information about the DBA, the CWHSSA and other federal laws, contact the Wage and Hour Division’s Columbus District Office at 614-469-6944 or call the division’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

BOSTON – The U.S. Department of Labor’s Wage and Hour Division will offer a comprehensive compliance seminar for employers, representatives of community rehabilitation programs, family members and guardians of workers with disabilities and other stakeholders on rules governing the payment of workers with disabilities under Section 14(c) of the Fair Labor Standards Act. 

The seminar will be held August 3^rd, 2016, from 8:30 a.m. to 5 p.m. EDT at John F. Kennedy Federal Building, 15 New Sudbury Street, Boston. Registration begins at 8 a.m., EDT. There is no charge to attend. 

“The Labor Department is committed to ensuring that all of our stakeholders – employers, community rehabilitation programs, advocates, workers and other interested parties – fully understand the rules that apply to employing workers with disabilities at subminimum wages,” said Wage and Hour Division  Hour Division Deputy Administrator Laura Fortman. “We are pleased to provide this free seminar and to offer this training. It is a key component of the department’s ongoing effort to increase awareness and enhance compliance of this program to prevent the curtailment of opportunities for employment of individuals with disabilities.”

The division enforces all requirements to protect both workers and employers, and in providing assistance to enable employers to proactively achieve compliance with Section 14(c) of the FLSA. Training will cover topics including the certification process, performing prevailing wage surveys, and conducting time studies. The department’s Section 14(c) on-line calculators that determine commensurate wage rates for employees will also be demonstrated.

Participants will learn about common compliance problems for Section 14(c) certificate holders, such as calculating commensurate wages and accurately tracking hours worked, and how to avoid them. The seminar will also address the impact of Executive Order 13658, which establishes a minimum wage for certain federal contractors, as well as the provisions of the Workforce Innovation and Opportunity Act that will directly affect an employer’s ability to pay workers a subminimum wage.

There is no fee to attend this conference; however, space is limited. Registration can be completed online at http://www.dol.gov/whd/specialemployment/FreeSeminar_Section14c.htm. An email will be sent to confirm registration. Members of the public with questions about the conference should call 603-606-3118.

For more information on Section 14(c) of the FLSA and other federal wage laws administered by the Wage and Hour Division, call the department’s toll-free helpline at 866-4US-WAGE (487-9243) or visit the agency’s website at http://dol.gov/whd/.  

Employer: WadeCo Specialties Inc., an oilfield services chemical provider

Site: 8115 West Industrial Avenue, Midland, Texas 79706

Investigation Findings: U.S. Department of Labor’s Wage and Hour Division investigators found that WadeCo Specialties Inc. violated the overtime and recordkeeping provisions of the Fair Labor Standards Act. The employer incorrectly classified service technicians and their billing support manager as exempt from the overtime requirements of the FLSA. The employer paid these workers flat salaries, without regard to the number of hours they actually worked. This practice resulted in violations when they failed to pay the workers overtime when they worked more than 40 hours in a week. The employer also failed to keep accurate time records as required by the FLSA.

Resolution: WadeCo Specialties will pay $219,515 in back wages and an equal, additional amount in liquidated damages for a total of $439,030 to 50 employees. The employer has reclassified the positions in question correctly as non-exempt, pays workers in those positions overtime, and now keeps records as required to comply with the FLSA.

Quote: “Simply paying workers on a salary basis does not necessarily mean they are not due overtime,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “Failing to pay workers the wages they have rightfully earned will come at high cost to the employer. When employers fail to pay workers legally, it harms the workers and their families and puts law-abiding employers at a competitive disadvantage. The liquidated damages paid to workers in this case demonstrate that the division will continue to use every remedy available to ensure workers are paid what they have earned.”

Background: Headquartered in Midland, WadeCo Specialties Inc. supplies, transports, services and stores chemicals required for oil field services and operation. Since 2012, the Wage and Hour division has concluded more than 1,000 investigations nationally and recovered more than $40 million in back wages for more than 29,000 employees in an initiative focused on oil and gas and related industries.

Information: 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 division is committed to ensuring that workers receive every penny they have rightfully earned. 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/.

Type of Action: Fair Labor Standards Act consent judgment

Name of Defendants: Mike’s Refinishing Corporation
Mike’s Decorating and Painting Inc.
Michael Nastepniak

Allegations: An investigation by the U.S. Department of Labor’s Wage and Hour Division found that the two companies and Michael Nastepniak, owner of Mike’s Decorating & Painting Inc. and supervisor of Mike’s Refinishing Corporation, violated the Fair Labor Standards Act by failing to pay workers legally required overtime. Investigators found the companies paid straight time for all hours worked, and failed to maintain accurate time records.

Quote: “Denying these workers the wages they rightfully earned harms the employees and their families, and makes it harder for law-abiding employers to compete,” said Thomas Gauza, district director for the Wage and Hour Division in Chicago. “This judgment demonstrates that the Wage and Hour Division will use every enforcement tool at our disposal to ensure a fair day’s pay for a fair day’s work, especially for vulnerable employees who may not be aware of their rights under the law.”

Resolution: Defendants have agreed to pay a total of $126,923, which represents $63,461 in back wages and an equal amount in liquidated damages to 52 current and former workers.

The consent judgment also requires the employer to:

• Provide each employee on each pay date with a pay stub, showing the specific dates of the pay period, total hours worked and paid, rate of pay, overtime hours paid, overtime rate of pay, gross amounts paid, and all deductions taken by defendants.
• Provide every current and future employee with the following Wage and Hour Division fact sheets:
  • Record-Keeping Requirements under the FLSA
  • Hours Worked under the FLSA.
  • FLSA Overtime Pay Requirements.
• Provide annual training on the FSLA to all supervisors and non-supervisory employees.
• Cease paying non-exempt employees in cash.
• Implement a centralized payroll system.
• Require non-exempt employees to keep weekly records of hours worked and ensure those records accurately record daily start and stop times and total hours worked.
• Maintain and preserve accurate records of employee wages paid and hours worked.

Background: 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.

Court: U.S. District Court for the Northern District of Illinois

Docket Number: 1:15-cv-06722

Employer: Wally’s American Pub and Grille, LLC, operating two restaurants in Arizona

Locations: 5029 North 44 Street, Phoenix
7704 East Double Tree Rach, Scottsdale

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found Wally’s American Pub and Grilled violated the overtime requirements of the Fair Labor Standards Act. The employer failed to add together the hours worked by kitchen staff and servers working at both locations within the same week. As a result, employees did not receive overtime pay at time and a half their regular hourly rates for the hours they worked beyond 40 in a workweek. The restaurant also failed to pay workers for time spent traveling between locations.

Resolution: Wally’s will pay $70,772 in overtime back wages and an equal amount in damages to 11 employees. The employer will also pay a $2,805 civil penalty due to the willful nature of the violations.

Quote: “As this case illustrates, we will fight for the hardworking men and women in the restaurant industry, many of whom are deprived of their rights to receive the overtime premium the law requires and that they deserve,” said Eric Murray, director of the Wage and Hour Division in Phoenix. “We will continue to use every enforcement tool at our disposal to protect the rights of these vulnerable workers.”

Background: In fiscal years 2009-2015, the Wage and Hour Division uncovered labor law violations in 82 percent of its more than 19,000 investigations of full-service restaurants nationwide. The division takes a vigorous, strategic approach to enforcement, focusing on those industries, such as restaurants, where the evidence shows violation rates are high, and where we find vulnerable low-wage workers who are often reluctant to assert their rights and raise their voices.

Information: Employees who have filed complaints or provided information cannot be discriminated against or discharged on account of such activity. If adverse action is taken against an employee for engaging in protected activity, the affected employee or the Secretary of Labor may file suit for relief, including reinstatement to his/her job, payment of lost wages, and damages. 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/.

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Date of Action: July 7, 2016

Type of Action: Lawsuit

Name of Defendant: Five Star Automatic Fire Protection LLC

Allegation: The U.S. Department of Labor filed a lawsuit against Five Star Automatic Fire Protection LLC after an investigation by the department’s Wage and Hour Division found that the employer violated the Fair Labor Standards Act by failing to pay 54 current and former employees $160,787 in overtime pay. Investigators from the division’s Albuquerque District Office found Five Star failed to pay its employees for time spent before their scheduled starting times as they loaded materials into the company vehicle and performed other tasks to prepare for the day’s work. The company also failed to pay workers for legally compensable travel time when it occurred after their shifts were scheduled to end. Investigators determined the employer failed to keep track of all hours worked and to record its employees’ starting and ending work times each work day, leading to a record-keeping violation in addition to the monetary violations.

Quote: “Employers cannot require employees to work before or after punching their timecards without being paid for that time,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “In this case, Five Star Automatic Fire Protection benefitted from the labor performed by these workers outside of their scheduled shifts, but didn’t pay for that work.  The Wage and Hour Division remains committed to ensuring that if you work, you get paid.  We will continue to use every tool available to us to make sure that happens.”

Resolution: The department seeks $321,000 in back wages and liquidated damages, and an injunction against future violations of the FLSA by Five Star.

Background: Based in El Paso, Texas, Five Star Automatic Fire Protection provides fire protection services for new construction projects and existing buildings.

Court: U.S. District Court for the Western District of Texas, El Paso Division

Docket Number: 3:16-cv-00282

Employer: Schamber Electric & Sons Inc., doing business as Schamber Electric Inc.

Location: 1674 Rail Road St., Corona, California

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found Schamber Electric violated the overtime provisions of the Fair Labor Standards Act when it paid workers straight time for hours worked beyond 40 per week. Specifically, the employer paid some installers on a piece-rate basis without regard to the number of hours they actually worked, resulting in violations when they worked more than 40 hours in a week without overtime.  The employer paid other workers hourly rates, but paid them straight time even when they worked more than 40 hours. The agency also found the employer violated the recordkeeping provisions for failing to accurately record the hours worked by employees each day and each week.

Resolution: Schamber Electric has paid 158 workers $160,906 in overtime back wages plus an additional, equal amount of $160,906 in liquidated damages.   

Quote: “When employers fail to pay hard-working employees the overtime they’ve rightfully earned, it hurts the workers, their families and their communities,” said Daniel Pasquil, district director of the Wage and Hour Division in West Covina. “The resolution of this investigation sends a strong message to other employers who may be paying workers in this manner – shorting your workers does not pay.  People working for other employers who believe they are not receiving proper overtime are encouraged to give us a call.”

Information: 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/.

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