Employer: Foothill Packing, Inc.

Location: 1582 G-Moffet St., Salinas, California

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division determined that the termination of 18 American workers by Foothill Packing, a packing and labeling company, violated the labor provisions of the H-2A guest worker program. The employer claimed the workers – who were U.S. citizens – had failed to meet production standards. Investigators found that many of them had consistently exceeded the production of many of the foreign workers doing the same jobs, yet Foothill did not terminate these foreign workers.

Resolution:  Foothill Packing paid $180,000 in back wages to the 18 terminated workers and also paid $55,000 in penalties for the violations of H-2A provisions of the Immigration and Nationality Act, and provisions of the Migrant and Seasonal Agricultural Worker Protection Act. Foothill agreed to future compliance and signed an agreement with the department requiring the company to:

• Designate a staff member whose primary job duties consist of monitoring and reporting the firm’s compliance with all H-2A regulatory requirements.
• Provide annual training to all frontline supervisors involved with the H-2A program.
• Provide detailed reasons for any future terminations to the U.S. Department of Labor.    

Quote:  “The H-2A visa program is explicit in stating that all jobs in this country must be offered to U.S. citizens before an employer may receive authorization to hire foreign workers. That same tenet also pertains to keeping workers on the payroll who are meeting performance standards,” said Susana Blanco, director of the Wage and Hour Division office in San Francisco. “We appreciate Foothill Packing’s cooperating with us to compensate the laid-off workers while also stepping up to the plate to ensure future compliance with federal labor laws.”

Information: The H-2A visa program allows companies and farm labor contractors to bring in foreign agricultural workers on a temporary basis when an adequate amount of qualified U.S. workers cannot be found to perform the work.  Employers must comply with a number of provisions, including providing housing, potential costs of inbound and outbound transportation from their home country to the U.S., in some cases meals, and must pay the adverse effect wage rate set by the department.  In addition, the employer must demonstrate that they made required efforts to hire U.S. workers prior to having their visas approved.  Employers must not give H-2A workers preferential treatment or wrongfully discharge U.S. workers. 

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 release en españól.

Employer: Hibachi City Buffet, Inc.

Sites: 72600 Dinah Shore Drive, Palm Desert, California

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division found that Hibachi City Buffet violated the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act. They found the employees – cooks, dishwashers and servers – worked more than 60 hours per workweek on average, yet the employer paid a fixed salary, without regard to the number of hours employees worked. Minimum wage violations resulted when those salaries failed to cover all the hours employees worked at the federal minimum wage of $7.25 per hour. Overtime violations occurred when workers exceeded 40 hours in a week, yet the employer still paid workers only their fixed salaries. Hibachi City Buffet also failed to keep time records showing how many hours employee worked, or how much they paid employees, as the law requires.

Resolution: A federal judge in U.S. District Court for the Central District of California approved a consent judgment between the department, Hibachi City Buffet, and its owners Wei Chen, Wu Chen and Honglin Chen. As a result, the restaurant and owners will pay 44 employees $90,000 in back wages. The judge has ordered the restaurant and its owners to pay $38,335 in penalties. The court also prohibited the employer from retaliating or taking any adverse employment action against any worker who exercises or asserts their rights under the FLSA.

Quote: “Vulnerable restaurant employees are often reluctant to complain when their employer fails to pay them the wages they’ve earned,” said Danny Pasquil, district director for the Wage and Hour Division in West Covina. “We urge all employees who are not paid legally to step forward. Cheating workers out of their hard-earned wages is illegal. As this consent judgment illustrates, we will continue to use every available tool, including asking the courts to step in, to ensure that workers receive a fair day’s pay for a fair day’s work.” 

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: MMM Foundation Repair

Site: 10510 Aves St., Houston, Texas

Investigation Findings: A U.S. Department of Labor Wage and Hour Division investigation found MMM Foundation Repair violated the overtime and recordkeeping provisions of the Fair Labor Standards Act. Investigators determined the employer misclassified employees as independent contractors, and paid them flat day rates without regard to how many hours they worked.  Violations resulted when these employees worked more than 40 hours in a week and the employer failed to pay them overtime.  MMM Foundation Repair also failed to keep time or payroll records for some employees, as required by FLSA.

Resolution: MMM Foundation Repair paid $49,980 in back wages and an equal amount in liquidated damages, for a total of $99,960 to 30 employees. The company also agreed to keep proper records and comply with all provisions of the FLSA in the future.  

Quote: “The misclassification of employees as independent contractors and practice of paying flat day rates are not new problems in the construction industry,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “When employers falsely label their employees as independent contractors, they often fail to pay not only overtime wages, but employment taxes and workers’ compensation as well. The ripple effects of misclassification go beyond the individual workers who are shorted; it also impacts hard working Americans and law abiding employers who play by the rules.” 

Background: MMM Foundation Repair performs foundation repair, house leveling and concrete work in the Houston area. This investigation is part of a broader regional enforcement initiative in the state’s construction industry. In 2015, the division recovered more than $460,000 for more than 510 construction industry workers in Texas.

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/.

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