Employer: Odelsi Recycling, a company that purchases recyclable materials such as aluminum, glass
and plastic bottles from individuals in California’s San Fernando Valley.

Location: 11045 Glenoaks Blvd., Pacoima
13426 Osborne St., Arleta

Investigation findings: Investigators with the U.S. Department of Labor’s Wage and Hour Division found that Odelsi Recycling violated the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act. Specifically, the employer paid employees’ flat salaries regardless of the number of hours they worked, resulting in minimum wage violations when the salary paid divided by the hours worked failed to cover at least $7.25 per hour. Overtime violations occurred when employees worked more than 40 hours in a week and the employer failed to pay them overtime. Recordkeeping violations resulted from the employer’s failure to record all the hours employees worked, as well as failing to record their rates of pay.

Resolution: Odelsi Recycling agreed to comply and to pay $22,617 in minimum wage and overtime back wages and an equal, additional amount in damages to four employees. 

Quote: “We continue to find widespread violations in Southern California’s recycling industry,” said Kimchi Bui, director of the Wage and Hour Division’s Los Angeles District Office. “This industry employs some of the most vulnerable workers we see. Simply paying workers a salary does not mean that they are not entitled to minimum wage and overtime. We will continue investigating and holding employers accountable as long as we continue to find recyclers shortchanging their employees.”

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

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/.

Read this news release en españól.

APPLETON, Wis. – After long hours in hot kitchens rapidly filling customer orders, many employees at El Azteca restaurants in Appleton, De Pere and Neenah received paychecks with wages below the federal minimum wage and often missing pay for overtime, federal investigators found.

Under terms of a consent judgment entered in U.S. District Court for the Eastern District of Wisconsin, the restaurants and their owners and managers – Marco Montalvo, Fe Montalvo and Sergio Jimenez – will pay 129 current and former employees a total of $700,000, including $350,000 in back wages and additional $350,000 in liquidated damages. The companies and individual defendants will also pay $25,000 in civil money penalties for violating the Fair Labor Standards Act. The judgment resolves a lawsuit filed by the U.S. Department of Labor in February 2015.

The suit follows an investigation by the department’s Wage and Hour Division that found the companies and individual defendants failed to pay kitchen staff and servers at least the federal minimum wage, and overtime for hours worked beyond 40 in a workweek at the four Wisconsin eateries.

“We see far too many violations like these in the restaurant industry, where low-wage workers are particularly vulnerable,” said U.S. Secretary of Labor Thomas E. Perez. “This consent judgment should serve as a wake-up call to restaurant owners and the industry that the U.S. Department of Labor takes these violations very seriously and will continue to use every tool at our disposal to ensure workers get the money they have earned.”

Investigators found the restaurants failed to comply with the FLSA’s minimum wage, overtime and record-keeping provisions by:

• Failing to record daily and weekly work hours and earnings accurately, resulting in not only a recordkeeping violation but also in the employer failing to pay employees for all the hours that they worked.  
• Paying kitchen staff flat salaries without regard to the number of  hours they worked, resulting in violations of the overtime regulations when these employees worked over 40 hours in a workweek and were not paid overtime.
• Making illegal deductions from servers’ and bussers’ pay for uniform shirts, nametags and aprons, resulting in minimum wage violations.  

“Expecting employees to work long hours in return for wages below the minimum wage is truly unfair and it is illegal,” said David Weil, administrator for the Wage and Hour Division. “The terms of this agreement will help to right a serious wrong and compensate these workers with their rightfully earned wages.”

Under the agreement, the company will pay back wages and an equal amount in liquidated damages as follows:

• El Azteca of Appleton Inc., known as El Azetca-Appleton North, 39 workers will receivea total of $188,761.
• El Azteca of Neenah Inc., 29 workers will receive a total of $192,699.
• El Azteca of Kimberly Inc., known as El Azteca-Appleton East, 33 workers will receive a totalof $222,914.
• El Maya Mexican Restaurant Inc., 28 workers will receive a total of $95,624. The restaurant was formerly known as El Azteca Restaurant of De Pere, Inc.

The court action enjoins the defendants from violating the FLSA in the future and requires significant changes in their business practices. The defendants are required to provide training to managers and employees on the FLSA to ensure compliance at all locations.

The consent judgment also requires the employer to:

• Provide every current and future employee with the following Wage and Hour Division publications in both Spanish and English:
  • “Work Hours Record Keeper,” a publication they can use to track their hours.
  • A Handy Reference Guide to the Fair Labor Standards Act.
  • Fact sheets for workers in the restaurant industry.
• Provide each employee with the Wage and Hour Division’s phone number.
• 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. The stub must show all pay and deductions regardless of whether the pay was by check or in cash. 
• Conduct quarterly reviews of time and payroll records at each location.

Additionally, if owners Marco and Fe Montalvo sell business assets prior to completing payment of the back wages, damages and penalties, the proceeds of the sale must go directly toward the debt owed to the workers.  The consent judgment also states that if the individual defendants sell their primary residence, the Secretary of Labor will place a lien on any new residence purchased.

Under the FLSA, restaurant operators can claim a credit for tips received toward their obligation to pay tipped employees the full minimum wage. An employer that claims this tip credit is required to pay a tipped employee only $2.13 per hour in direct wages. If an employee’s tips, when added to the wages paid directly by the employer, do not equal at least the federal minimum wage of $7.25 per hour the employer must make up the difference. Tips are the property of the employees who receive them.

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).

# # #

Perez v. El Azteca Restaurants Inc., El Azteca of Appleton Inc., El Azteca of Neenah Inc.
El Azteca of Kimberly Inc., El Maya Mexican Restaurant Inc. formerly known as El Azteca Restaurant of De Pere, Inc. and individuals, Marco Montalvo, Fe Montalvo and Sergio Jimenez

Filed in U.S. District Court for the Eastern District of Wisconsin, Green Bay Division

Civil Action Number: 5-cv-221
OALJ Reference: 2015-FLS-0006

GUAYNABO, Puerto Rico – A consent judgment has been filed in federal district court ordering a Yauco coffee grower to pay $101,484 in back wages to more than 170 year-round farm workers and seasonal coffee pickers who the company underpaid between 2011 and 2014.

An investigation by the U.S. Department of Labor’s Wage and Hour Division determined that Beneficiado de Café Las Indieras, doing business as Hacienda Remanso de Paz, and its president, Wilfredo Ruiz Vargas failed to pay the farm workers and coffee harvesters they employed the legally required minimum wage for all the hours they worked. Investigators also found that the defendants failed to create and maintain accurate records of their employees’ wages, hours and other conditions of employment, in violation of the Fair Labor Standards Act. In September 2013, the department filed suit against the defendants in the U.S. District Court for the District of Puerto Rico.

“Puerto Rico’s agricultural employers should take note of this case and its outcome. Denying low-wage, agricultural workers their legally required minimum wage will not be tolerated,” said Jose R. Vazquez, director of the Wage and Hour Division’s Caribbean District Office. “We have used and will continue to use all the investigation and enforcement tools at our disposal to protect these vulnerable workers and to ensure that they are paid every penny they have legally earned.”

The judgment incorporates a detailed compliance plan submitted by defendants to the department, which outlines corrective actions they will take to ensure they pay workers correctly going forward.

The judgment orders the defendants to:

• Maintain accurate and complete records as to employees’ work hours and pay rates, and to provide copies to the Wage and Hour Division.
• Ensure that Ruiz Vargas, the farm workers and seasonal employees participate in Wage and Hour Division training sessions on the FLSA’s minimum wage, overtime, record-keeping and anti-retaliation provisions.
• Pay employees at least the minimum wage while they attend this training.
• Provide written notification to the workers of their rights under the FLSA.

The judgment also prohibits Beneficiado de Café Las Indieras and Ruiz Vargas from:

• Directly or indirectly soliciting, suggesting or coercing employees to return or ‘kick back’ the back wage payments to the defendants.
• Discharging or retaliating against employees who disclose or threaten to disclose FLSA violations, cooperate in an investigation or refuse to participate in any activity reasonably believed to violate the FLSA.
• Violating the FLSA in the future.

The judgment also states that if the defendants default on payment of the back wages, the court can appoint a receiver to ensure payment at the defendants’ expense. The receiver will have the authority to collect and liquidate the defendants’ assets to ensure payment. The defendants must cooperate with the receiver.

“The coffee-growing industry in Puerto Rico employs thousands of workers, many of them coffee pickers who are paid traditionally by the piece for the coffee they pick. Paying by the piece is legal, but each employee must earn at least the federal minimum wage of $7.25 per hour. If a worker doesn’t pick enough to earn that amount from the piece rate, the employer must pay the difference. We remind employers that it is their responsibility to ensure that their employees are properly paid,” said Vazquez.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour, as well as time and one-half their regular rates for every hour they work beyond 40 per week. The law also requires employers to maintain accurate records of employees’ wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law.

The investigation was conducted by the Mayaguez Field Office, a subset of the division’s Caribbean District Office. The case was litigated by attorneys Summer Silversmith, Allison L. Bowles and Frances Y. Ma for the department’s Regional Office of the Solicitor in New York. 

For more information about the FLSA, contact the division’s toll-free helpline at 866-4US-WAGE (487-9243) or its Caribbean District Office at 787-775-1924. Information also is available at http://www.dol.gov/whd.  

# # #

Perez v. Beneficiado De Cafe Las Indieras, Inc. d/b/a Hacienda Remanso De Paz, and Wilfredo Ruiz Vargas.
Civil Action Number: 3:13-cv-01730

Read this news release en españól.

SAN FRANCISCO – Two separate court rulings in U.S. District Court for the Northern District of California are putting more than $1 million in back wages and damages into the hands of dozens of workers denied minimum wage and overtime by the owners of nearly a dozen Bay Area residential care facilities.

In a consent judgment entered May 17, 2016, by Magistrate Judge Donna Ryu, San Miguel Homes for the Elderly of Union City agreed to pay $425,000 in back wages and damages to 26 caregivers working at its Union City facilities, and admitted to not paying minimum wage and overtime.

The action follows a U.S. Department of Labor Wage and Hour Division investigation that found egregious minimum wage and overtime violations as the company made caregivers work around the clock without paying them for all of their hours. The department filed suit against San Miguel Homes in December 2015 after the company’s owners refused to meet with division investigators, claiming that they were not obligated to comply with the Fair Labor Standards Act. In January, the division learned that the company’s owners were threatening to sue workers suspected of cooperating with the investigation, and having employees falsify timesheets.

The consent judgment also requires the company to provide adequate coverage during all shifts to eliminate employees working off the clock and to ensure the company pays employees properly for all hours worked.

In a second ruling, Judge James Donato approved a consent judgment March 7, 2016, between the department and Razel Cortez and Elizabeth Palad, owners of eight residential care facilities. The facilities are Walnut Creek Willows in Walnut Creek, Elizabeth’s Care Home 1 and 2 in South San Francisco, Samantha’s Care Home in San Bruno, New Haven Care Home in Union City, and Rayzel’s Villa and Villa San Lorenzo in San Lorenzo.

Division investigators found the employer misclassified caregivers as independent contractors, paid them a flat monthly salary well below minimum wage, provided no premium for overtime even though the employees often worked 60 hours per week, and failed to keep any records of the employees’ hours worked. The court’s order requires the homes and their owners to pay unpaid wages and damages totaling $643,992 due to minimum wage and overtime violations of the FLSA.

That consent judgment also requires the defendants to hire a third-party monitor to audit their compliance with the FLSA, to post copies of the consent judgment and notices of employee rights in both English and Tagalog at each of their facilities, to provide detailed pay stubs to every employee each pay period and direct them to review the documents, and to provide contact information for the Wage and Hour Division, in both languages, with every pay stub.

“Dozens of Bay Area residential care workers will finally receive their hard-earned back wages, and damages, thanks to these court rulings,” said Janet Herold from the department’s Solicitor’s Office in San Francisco. 

“Too many hardworking men and women who tend to the most basic needs of our loved ones continue to be shortchanged for their efforts. We aim to put a stop to that through strong enforcement of federal labor laws along with a robust outreach and education program,” said Ruben Rosalez, regional administrator for the Wage and Hour Division’s Western Region.

The department’s Wage and Hour Division continues to find violations in the residential care field, particularly in the Bay Area. In the 2015 fiscal year, its San Francisco District Office concluded more than 100 investigations of residential care facilities and nursing homes, resulting in $3 million in back wages and damages for more than 475 employees.

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/.

WASHINGTON – U.S. Secretary of Labor Thomas E. Perez today issued the following statement in response to the U.S. Supreme Court’s decision not to hear a challenge to the department’s Home Care Final Rule:

“The U.S. Department of Labor’s Home Care Final Rule is vital to the nearly two million workers who provide home care services to our loved ones who wish to remain in their homes and communities.

“Until this rule, this growing and increasingly important group of workers who provide compassionate and competent care to our aging parents and to family members with disabilities were left out of the American promise of a fair day’s pay for a hard day’s work. It undermines America’s basic bargain when an estimated 40 percent of home care workers rely on public assistance to make ends meet. These are dedicated and skilled workers, and they deserve to be paid as such.

“In 2011, in keeping with our statutory authority, we began a process to update the rules and provide home care workers with the same minimum wage and overtime protections enjoyed by most workers in the country, including those who perform the same duties in nursing homes. We did so in a transparent manner, consistent with the requirements of the federal rulemaking process, accepting and carefully considering public comments. The Home Care Final Rule is legally sound, and it was the right thing to do.

“Today’s decision by the court not to review a challenge to the Final Rule ensures that the rule can fulfill President Obama’s vision of an economy where hard work pays off and responsibility is rewarded. That will mean greater economic stability for so many hard-working people. For everything they do for our families, they deserve – and now they will get – a fair shot at being able to take care of their own. The final rule will also mean a more stable and professional home care workforce, benefitting consumers of these services and better meeting the needs of an aging population.

“We have worked closely with a wide range of stakeholders, including state officials, providers of home care services, advocates representing people with disabilities and worker advocates, to encourage thoughtful implementation of the rule. We have two goals: extending basic labor protections to home care workers; and ensuring that Medicaid participants and their families enjoy continued access to the home and community-based services they need, particularly services delivered through innovative models of care. 

“We continue to stand ready to provide all stakeholders with the technical assistance necessary to help them comply with the rule.”

Type of Action: Fair Labor Standards Act Consent Judgment

Defendant(s): Indian Hills Produce Inc. and John Toth

Allegations: An investigation by the U.S. Department of Labor’s Wage and Hour Division found that Indian Hills Produce and owner John Toth violated the overtime provisions of the Fair Labor Standards Act by failing to pay 14 workers overtime for hours worked beyond 40 in a workweek. The defendants paid workers at a Vincennes, Indiana, facility on a piece-rate basis, without regard to how many hours they worked, to pack watermelons from growers around Indiana and elsewhere.

Resolution: Under the terms of a consent judgment entered in federal court, the company has paid 14 workers a total of $58,226 which includes $29,113 in back wages and an equal amount in liquidated damages. Indian Hills Produce has also paid $15,400 in civil money penalties for willful violations of the FLSA.

Quote: “Paying employees on a piece-rate basis does not absolve an employer of its responsibility to pay overtime,” said Patricia Lewis, district director for the Wage and Hour Division in Indianapolis. “Indian Hills Produce attempted to conceal its overtime violations. The company knows the rules and is now on notice that the division will not tolerate Indian Hill’s continued disregard of federal wage laws at any of its locations. The resolution of this case should send a strong message to other employers who attempt to deny workers their rightful wages that the division will use every enforcement tool available to end the exploitation and unfair treatment of vulnerable agricultural workers. A fair day’s work deserves a fair day’s pay.”

Background: Based in Groveland, Florida, Indian Hills Produce violated the FLSA for not paying overtime to workers at the same Indiana facility, the division found in 2013.

Court: U.S. District Court for the Southern District of Indiana

Docket Number: 15-cv-221

Employers: Lorraine Cerezo Lim doing business as LQC Care Home and Richlee Care Home
Luzviminda Cerezo doing business as White Oaks Manor, Cerezo Residential Care Home and Ross Senior Care Home

Sites: 427 Richlee Drive, Campbell, California
2064 Cherry Ave., San Jose, California
2991 Faircliff Court, San Jose, California
1573 Willow Oaks Drive, San Jose, California
2858 Ross Ave., San Jose, California
1680 White Oaks Ave., Campbell, California
2934 Jessie Court, San Jose, California

Investigation findings: U.S. Department of Labor Wage and Hour Division investigators found the owners of the two residential care enterprises in violation of the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act. Specifically, the employers paid most workers a flat rate per day, ranging from $75 to $103, for working at least 12 hours per day, 5 to 6 days a week. As a result, the employer violated minimum wage laws when the day rates failed to cover at least $7.25 per hour for all the hours employees worked. The employer also failed to pay workers time and one-half their regular rates when they worked more than 40 hours in a week, as overtime laws require, and failed to record the hours actually worked by employees in violation of the FLSA’s provisions. 

Resolution: The employers will pay 32 workers more than $359,000 in back wages and an equal, additional amount in liquidated damages.

Quote: “Workers in the residential care industry, who work long hours taking care of our loved ones, often struggle to take care of their own families. When they are denied hard and rightfully earned wages, it's unacceptable,” said Susana Blanco, director of the Wage and Hour Division’s San Francisco District Office. “The violations found here are all too common. The resolution of this case sends a strong message that we are committed to making sure that these workers take home every penny they have rightfully earned.”

Background: The department’s Wage and Hour Division continues to find violations in the residential care field, particularly in the Bay Area. In the 2015 fiscal year, the division’s San Francisco District Office concluded more than 100 investigations of residential care facilities and nursing homes, resulting in $3 million in back wages and damages for more than 475 employees.

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/.

WASHINGTON – A Chantilly-based technology company contracted to install audio-visual equipment at government installations nationwide will pay $1.53 million in back wages and benefits to 140 information technology professionals in federal consent findings.

The consent findings come in response to a 2015 lawsuit filed by the U.S. Department of Labor against Innovative Technologies Inc. after the department’s Wage and Hour Division identified violations of federal labor laws.

The division found ITI violated the McNamara-O’Hara Service Contract Act of 1965 when it failed to pay legally required prevailing wages, fringe benefits, vacation and holiday wages to its direct employees or to ensure such payment to those employed by 10 of its subcontractors.

The lawsuit was filed based on the division’s investigation, which found ITI:

• Incorrectly categorized and paid approximately 127 engineering technicians as lower-paid audio-visual and installation technicians.
• Incorrectly categorized and paid approximately 10 warehouse specialists and supply technicians as lower-paid warehouse assistants.
• Failed to provide legally required fringe benefits to approximately 130 employees.
• Failed to properly provide vacation pay and holiday pay to several employees, including those employed by subcontractors.

The division also concluded that the contractor failed to pay employees overtime at time and one-half the required prevailing wage rates when they worked over 40 hours in a workweek, in violation of the Contract Work Hours and Safety Standards Act.

“In this competitive contracting environment, no contractor should gain an economic advantage by paying workers below the wages and fringe benefits required by law,” said Dr. David Weil, administrator of the Wage and Hour Division. “Taxpayers have a right to expect that federal contractors – who are paid with tax dollars – will comply with the law, and the U.S. Department of Labor will not allow companies to abuse that trust. This investigation demonstrates our commitment to ensuring that employees are paid the wages they have rightfully earned and to leveling the playing field among all employers who do business with the government.”

Along with ITI employees, the consent judgement covers employees of the following subcontractors:

• Ace Contractor, Springfield, Virginia
• AeroTek, Hanover, Maryland
• ALEX, Chantilly, Virginia
• Arrow Technologies, Arrow Technologies, Littleton, Colorado
• AvTek Staffing, Washington, D.C.
• MSI, Centerville, Virginia
• Northern VA Staffing, Bethesda, Maryland
• Quadrant Inc., Reston, Virginia
• Tech USA, Millersville, Maryland
• Volt Technical Resources, Vienna, Virginia

The U.S. Department of Defense’s Media Agency awarded a contract to ITI in November 2006, with 155 task orders at 100 locations nationwide.  DMA provides news and information to U.S. forces deployed worldwide through the department’s media outlets, including radio, TV, Internet, print and emerging media technologies.

The SCA requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the prevailing wage rates and fringe benefits found in the locality, or the rates contained in a predecessor contractor’s collective bargaining agreement.

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 rate of pay for all hours worked over 40 in a workweek.

Employer: Junior’s Inc., doing business as Junior’s Supper Club

Site: 2601 NW Expressway, Oklahoma City, Oklahoma

Investigation Findings: A U.S. Department of Labor Wage and Hour Division investigation found Junior’s Supper Club violated the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act. The investigation by the division’s Oklahoma City District Office revealed the employer:

• Failed to combine hours worked by employees who performed more than one job duty at the restaurant.  For example, if an employee worked both as a server and as a busser, those hours were recorded and paid for separately. As a result, the employer failed to recognize when these employees worked more than 40 hours in a week and failed to pay them overtime as required by the FLSA.
• Illegally deducted time from workers’ pay when no work was available or when the owner perceived an employee to be disengaged, although workers were ready and able to work. This resulted in minimum wage and overtime violations for the unpaid time.
• Failed to keep an accurate record of the total number of hours employees worked in a workweek, a record-keeping violation under the FLSA.

Resolution: Junior’s Supper Club paid $26,243 in minimum wage and overtime back wages and an equal amount in liquidated damages, for a total of $52,487 to nine employees. The restaurant agreed to keep proper records and comply with all provisions of the FLSA in the future.  

Quote: “Restaurant workers are among the most vulnerable workers we see in Oklahoma,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “If an employer requires workers to be ready to serve customers whenever they walk in, the employer must pay workers for the times when there may be no customers in the facility. These workers depend on every penny they rightfully earn; cheating them out of overtime has a tremendous impact on them and their families. The resolution of this case signals the division’s commitment to protecting restaurant workers, and leveling the playing field for employers who pay their workers legally.” 

Background:  A well-known destination since 1973, Junior’s Supper Club has served steaks and other entrees at its Oklahoma City location. It has 31 employees.

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 Oklahoma City District Office at 405-231-4158. Information is also available at http://www.dol.gov/whd/.

Employers: Alpha Services, LLC
Eco Group, LLC

Sites: 1141 North 3^rd St., Coeur d’Alene, Idaho
10936 SW Marilyn, Tualatin, Oregon

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found that Alpha Services, violated both the Service Contract Act and Migrant and Seasonal Agricultural Worker Protection Act when the company failed to pay workers legally required wages for pruning and planting work in national forests in Oregon and Idaho. A reforestation contractor for the U.S. Forest Service and the U.S. Bureau of Land Management, Alpha paid reforestation workers on a piece-rate basis that failed to yield at least the prevailing hourly rate required by federal law. The contractor also failed to keep accurate records of the number of hours worked by employees, providing records to investigators that showed a reduced number of hours, creating the false appearance that the piece-rate earnings covered the rates required.

Alpha Service’s labor subcontractor, Eco Group paid workers at hourly rates that fell below the prevailing wage rates required for federal government contracts covered by the SCA, and failed to pay workers required fringe benefits. Investigators found that both firms were jointly responsible for the wages found due. 

Resolution: Both firms agreed to comply with the federal labor law, and pay employees their required prevailing wages due. Alpha Services paid $66,295 to 57 employees and Eco Group paid $37,339 to 48 employees. In addition, the division has assessed civil money penalties of $59,500 against Alpha Services, and $10,600 against Eco Group for the violations found under MSPA.

Quote: “Reforestation workers regularly face language barriers, often fear stepping forward when wage or safety violations occur, and have limited access to public services since they work and live in isolated areas,” said Thomas Silva, the Wage and Hour Division’s district director in Portland. “When companies fail to pay these vulnerable workers their hard-earned wages, the Wage and Hour Division will continue to use every tool available to protect their rights. We encourage workers in similar circumstances to contact us.”  

Information: The SCA requires that contractors and subcontractors performing services on covered federal contracts in excess of $2,500 must pay their service workers no less than the wages and fringe benefits prevailing in the locality, or rates contained in a predecessor contractor’s collective bargaining agreement.

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/.