Background: As the summer peach festival season approaches, investigators from the U.S. Department of Labor and its Wage and Hour Division’s Tulsa Area Office are offering festival coordinators, growers, farm workers and others interested in labor issues in the industry an opportunity to learn about the federal laws that protect the industry’s workers. “Cultivating Compliance” is part of the division’s ongoing education and enforcement initiatives. Division representatives will also be on-hand at the Porter Peach festival on July 15, to provide information and answer questions.

Investigators report training and outreach events like these improve compliance with federal labor laws such as the Fair Labor Standards Act, the Migrant and Seasonal Agricultural Worker Protection Act, the labor provisions of the H-2A visa program, and the field sanitation provisions of the Occupational Safety and Health Act.  

For more information about federal wage laws, or for information about attending a training event, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243), its Oklahoma City District Office at 405-231-4158, or the Tulsa Area Office at 918-581-6303. Information also is available at http://www.dol.gov/whd/ag/.

Participants: U.S. Department of Labor’s Wage and Hour Division
Virginia Employment Commission

Partnership description: The U.S. Department of Labor’s Wage and Hour Division and the Virginia Employment Commission 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 coordinated investigations and sharing information consistent with applicable law.

Background: The division and the U.S. Internal Revenue Service are working with Virginia and 30 U.S. 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 basic rights such as minimum wage, overtime and other benefits. Misclassification also improperly lowers tax revenues to federal and state governments, as create losses for 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, 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

“Virginia is excited to partner with the U.S. Department of Labor’s Wage and Hour Division on this important issue. Virginia has increased its emphasis on identifying misclassified workers. This MOU is another tool Virginia has in our effort to end misclassification of workers and the harm it causes.”

Ellen Marie Hess, Commissioner, Virginia Employment Commission

Employer name: Concrete Supply Co. Inc.

Investigation site: 155 Greencastle Road, Tyrone, Georgia 30290

Investigation findings: Investigators with the U.S. Department of Labor’s Wage and Hour Division, Atlanta District Office, found that Concrete Supply Co. violated the overtime and recordkeeping provisions of the Fair Labor Standards Act.

Specifically, the employer misapplied an overtime exemption meant for interstate truck drivers, driver’s helpers, loaders or mechanics, and improperly categorized its dump truck drivers as exempt, denying them overtime compensation when they worked over 40 hours in a workweek. The employer also failed to maintain required time and payroll records.

Concrete Supply hauls sand, stone, topsoil, construction and bulk materials within Georgia’s state lines.

Resolution: Concrete Supply will comply with the FLSA and pay 45 workers $78,938 in back wages.

Quote: “Concrete Supply denied its workers their hard-earned wages, impacting their ability to meet their financial obligations,” said Eric Williams, the Wage and Hour Division’s district director in Atlanta. “This case is a reminder to all employers to ensure their payroll practices comply with the law. If employers have concerns or are unsure of their obligations under the law, they should contact the division for assistance.”

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 rates of pay for hours worked beyond 40 per week. Employers also are required to maintain accurate time and payroll records and to comply with the hours worked requirements. For more information about the FLSA and wage laws or to file a complaint, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243), the Atlanta District Office at 678-237-0521, or visit http://www.dol.gov/whd/.

Employer name: C&N Do Inc., doing business as Little Italy

Investigation site: 2901 Parkway Blvd., Kissimmee, Florida 34747

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division found that Little Italy, an Italian restaurant and pizzeria in Kissimmee, violated the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act. Specifically, the employer failed to pay legally required minimum wage when some hours worked by employees went unpaid. Overtime violations occurred when hourly paid servers and cooks were paid straight time for their overtime hours, when overtime was paid occasionally after 80 hours in a two-week period rather than after 40 hours in one week, and when overtime for tipped employees was not based upon the full minimum wage of $7.25 per hour. The employer also failed to maintain required time and payroll records, and was found to have reported inaccurate numbers of hours worked to the company that processed its payroll.

Resolution: The employer will comply with the FLSA and pay $40,979 in back wages to 15 employees.

Quote: “Violations like these are far too common in the restaurant industry,” said Daniel White, district director for the Wage and Hour Division in Jacksonville. “We are committed to protecting workers’ rights and to improving industry compliance by partnering with state agencies – such as the Florida Department of Revenue – to identify non-compliant businesses and conduct investigations. Employers who play by the rules should not find themselves at an economic disadvantage to those who do not.”

Information: The division has agreements with 30 states, including Florida, to ensure workers get the wages, benefits and protections they are entitled to by law. The division and the Florida Department of Revenue regularly accept referrals from one another related to potential violations of state or federal law.

The FLSA requires that covered, nonexempt employees be paid for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week. Employers are prohibited from retaliating against workers who exercise their rights under the law.

For more information about the FLSA and wage laws or to file a complaint, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243); the Jacksonville District Office at 904-359-9292 or visit http://www.dol.gov/whd/.

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/.