Type of Action: Fair Labor Standards Act lawsuit filing

Names of Defendant(s): Sage Holding Group Ltd, doing business as Generations Home Care
Vincent F. Salvia

Complaint: The U.S. Department of Labor has filed a lawsuit in federal court to recover approximately $32,200 in back wages and an equal, additional amount in liquidated damages for 56 employees of Sage Holding Group Ltd. The company operates as Generations Home Care in Rochester Hills, Michigan. The suit also names the company’s owner, Vincent Salvia.

An investigation by the department’s Wage and Hour Division revealed that the employer failed to pay overtime when it incorrectly applied an exemption meant for workers who perform companionship services to hourly nursing assistants working in an assisted living facility. The employer paid straight time for overtime hours, despite the fact that the hourly nursing assistants did not work “in or about a private home,” as is required for the companionship services exemption to apply. Instead, the hourly nursing assistants worked in a large facility where many of the residents lived in secured units. The facility did not allow residents to cook, or to control who could access their residences, and required residents to have homecare services to live in the facility.

The division assessed a total of $61,600 in civil money penalties for willful and repeated violations of the FLSA. In 2010, the division investigated the company for paying straight time for overtime to nurses. The company paid back wages and agreed to comply with the FLSA in the future at that time.

Quote: “Nursing assistants provide dignified care for individuals who can no longer care for themselves. These hard-working attendants deserve to be properly compensated for their compassionate work,” said Timolin Mitchell, district director for the Wage and Hour Division in Detroit. “Generations Home Care is acutely aware of wage laws that are applicable to its employees. Yet, the company continues to fail to meet its wage obligations. This lawsuit demonstrates our commitment to ensuring that workers receive every penny they have rightfully earned. Other employees being paid in this manner are encouraged to notify the Wage and Hour Division.”

Information: 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 www.dol.gov/whd/fmla/ .

Court: 2:16-cv-11627-BAF-MKM
U.S. District Court for the Eastern District of Michigan, Detroit

PHILADELPHIA – The failure by two Philadelphia-area businesses – a custom jewelry distributer and an international shipping and direct mail company – to pay a combined 797 temporary workers minimum wage and overtime will cost the companies a total of $763,000 in back wages and damages.

U.S. Department of Labor's Wage and Hour Division investigators found Stanley Creations Inc. in Melrose Park and Asendia USA in Folcroft violated the Fair Labor Standards Act when they did not pay legally required minimum wages and overtime to the workers for more than two years. Investigators also cited both for failing to maintain records the law requires. In separate agreements with the division, the two employers will pay a total of $381,580 in back wages and an equal amount in liquidated damages.

"Our investigations found that Stanley Creations and Asendia were clearly taking advantage of these low-wage, temporary workers by denying them the wages they had rightfully earned," said Mark Watson, administrator of the Wage and Hour Division's Northeast Region. "Those who contract with outside companies for temporary help have an obligation to ensure these workers are paid in compliance with the law.  In both of these cases, we found the host companies responsible for payment of the temporary workers as joint employers.  This should send a strong message to other employers who use staffing services – when you're benefitting from their labor, you cannot ignore your obligations to these workers."

Investigators found that Stanley employed a core crew of temporary workers supplied by staffing company, International Labor Inc., and paid the workers each week in cash at a rate of $6 per hour. The company did not pay overtime when the workers' hours exceeded 40 in a workweek. The company distributes its custom jewelry to major retailers, including Macy's, Kohl's, JCPenney and Boscov's.

In the second investigation, the division found Asendia, a global provider of business-to-consumer shipping and mailing services, paid temporary workers supplied by Northeast Staffing LLC, an average of $6.69 per hour, in cash. Although the company paid workers overtime when they worked more than 40 hours in a workweek, the rates upon which they based their time-and-one-half calculation were below the legally-required federal minimum wage of $7.25 per hour.

In addition to paying back wages and damages, Asendia agreed to take the following steps to ensure future compliance with the law:

• Hire a human resources manager as a liaison between the staffing agency and company management.
• Interview staffing agencies and request references.
• Require the staffing agency have a supervisor on site and pay temporary workers electronically.
• Maintain records of all temporary workers at the site.
• Periodically check the staffing agency's payroll records.

Asendia USA is an international shipping and direct mail company, which operates as a subsidiary of parent companies, La Poste in France and Swiss Post in Switzerland.

The cases are the latest reported in the division's temporary help initiative.  The division previously released findings of over $3.6 million in back wages and liquidated damages due to 843 employees. 

The FLSA requires that covered, non-exempt 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 must maintain accurate time and payroll records. The FLSA provides that employers who violate the law are liable to employees for their back wages and an equal amount in liquidated damages.

CLARK, N.J. – People who work as commercial building cleaners often toil late into the night after others have finished their day’s work. They vacuum carpets, sweep, mop and wax floors, clean restrooms, and perform tasks many people fail to notice. Their jobs help others enjoy comfortable and clean environments. They are often among the lowest-paid workers in America.

Now imagine an employer who convinces these vulnerable workers they are not low-wage employees, but instead, could live the American dream by purchasing their own cleaning businesses. That dream looked more like a nightmare for workers in New Jersey who put in long hours, sometimes earning less than the minimum wage, worked more than 40 hours a week with no overtime, and incurred substantial debt for the purchase of a so-called franchise, yet had little to no control over any aspect of the businesses they supposedly owned. 

Investigators from the U.S. Department of Labor’s Wage and Hour Division found that Grammatico Enterprises, Inc., doing business as Heits Building Service of Central and Northern New Jersey, and its owner, Giuseppe Grammatico, created a bogus franchise structure in order to misclassify employees as independent contractors, while retaining control over virtually all aspects of their employment.  By doing so, the employer attempted to deprive workers of  minimum wage and overtime required by the federal Fair Labor Standards Act.  The firm also violated the law’s record-keeping provisions.

“Franchising can be a legitimate and profitable business model that can also be fully compliant with the law. But we will vigorously challenge using the model as a cover for misclassification that undercuts compliant businesses and directly harms workers,” said Dr. David Weil, administrator of the Wage and Hour Division.  

In September 2015, the department sued Grammatico and its owner seeking back wages, damages and other recourse. The department filed a consent judgement in the U.S. District Court for the District of New Jersey, in which it agrees to pay $25,000 in back wages and an additional, equal amount in liquidated damages to the workers. The judgment also orders Heits to forgive $154,441 in financing fees it claims the employees owe, removing what was a huge financial burden from these workers.

“By holding out the promise of a owning a business, Grammatico misclassified these employees as independent contractors to avoid its responsibility to pay the wages required by law,” said John Warner, director of the Wage and Hour Division’s Northern New Jersey District Office. “The company profited at the expense of hard-working, low-wage workers. Grammatico led these workers to believe they were independent business owners, charging them thousands of dollars in franchise fees in addition to cheating them out of wages.  This judgment sends a clear message to the industry – the Wage and Hour Division will not tolerate such blatant exploitation, and will use every tool available to us to ensure workers are paid every penny they are owed.”  

These “franchises” were not allowed to acquire new customers, have their own customers, negotiate service prices, or even purchase supplies from a vendor of their choice – they simply paid a fee to work for the employer.  All business transactions with clients were handled by Grammatico.

“In reality these ‘franchises’ were underpaid workers burdened with debt, and fees,” said Jeffrey Rogoff, Regional Solicitor of Labor in New York, whose office litigated the case.  “This sort of arrangement is all too common in this industry, and illustrates the vulnerabilities workers face in the fissured workplace.   The Labor Department will continue to pursue all business models that attempt to avoid an employer’s responsibilities to its workers, and all available legal measures to ensure that workers are properly classified and paid for their work.”

In addition to paying the back wages and liquidated damages, and forgiving the financing fees, the company and Grammatico also agree to:

• Stop selling new Heits franchises in New Jersey.
• Stop requiring their employees to purchase uniforms, supplies or insurance.
• Stop deducting  royalty or management fees from employees’ wages.
• Ensure that Grammatico will only classify workers as independent contractors when the workers meet the standard provided by the division’s administrator’s interpretation. 

Under the FLSA, employers must distinguish employees from bona fide independent contractors.  An employee – as distinguished from a person who is engaged in a business of his or her own – is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business that he or she serves. For more information, visit http://www.dol.gov/whd/regs/compliance/whdfs13.htm.  

The misclassification of employees as independent contractors presents a serious problem for affected employees, employers and the entire economy. Misclassified employees often are denied access to critical benefits and protections – such as family and medical leave, overtime, minimum wage and Unemployment Insurance – to which they are entitled. Employee misclassification generates substantial losses to the U.S. Treasury and the Social Security and Medicare funds, as well as to state Unemployment Insurance and workers’ compensation funds. Misclassification also creates a competitive disadvantage for employers who comply with the law.

The FLSA requires that all 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.

CHARLESTON, S.C. – Investigations by the U.S. Department of Labor’s Wage and Hour Division at three Charleston area restaurants have found violations of the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act. As a result, the restaurants will pay a total of $216,586 in back wages to 26 employees.

The investigations found the employers:

• Paid cooks and dishwashers fixed salaries without regard to the number of hours they actually worked.  This resulted in overtime violations when these employees worked more than 40 hours in a week without additional overtime payment as well as minimum wage violations when they worked so many hours that their salaries failed to cover $7.25 per hour.  
• Failed to pay hourly workers minimum wage and overtime for hours they worked beyond 40 in a workweek.
• Required wait staff to work only for tips, resulting in minimum wage and overtimes violations.
• Reduced workers’ pay below minimum wage by charging employees for mandatory uniforms.
• Failed to maintain required time and payroll records.

“The restaurant industry employs some of this country’s lowest-paid workers, who are often vulnerable to disparate treatment and wage violations. Failing to pay these workers the wages they have worked long hours to earn hurts them and their families, and cheats competitors who obey the law,” said Jamie Benefiel, director of the division’s Columbia office that conducted the investigations. “The Wage and Hour Division is resolute in its commitment to increasing compliance in this industry. Our investigators continue to make unannounced visits at restaurants throughout South Carolina and, where violations are found, to use every tool at our disposal to remedy them.”

The restaurants involved in the investigation are:

• El Dorado Mexican Restaurant, 1109 Savannah Highway, Charleston
• Los Reyes Mexican Restaurant, 7620 Rivers Ave. #395, North Charleston  
• Los Reyes Mexican Restaurant, 5117 Ashley Phosphate Road, North Charleston

In addition to paying back wages and committing to comply with the FLSA going forward, the restaurants owners signed an agreement with the department to:

• Procure and install a timekeeping system at each location.
• Provide workers with a record of their work hours each pay period, and allow them to make corrections should the record be inaccurate.
• Provide workers with the Department of Labor contact number as part of their wage statements.
• Post information about the division’s timesheet app in a location visible to all employees.
• Provide a copy of the department’s fact sheet on executive employees to all newly-hired managers.

Under the FLSA, an employer of a tipped employee is only required to pay $2.13 an hour in direct wages if that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour. If an employee’s tips combined with the employer’s direct wages do not equal at least the minimum wage, the employer must make up the difference. Employers may create a tip-pooling or sharing arrangement among employees who customarily and regularly receive tips, but a valid tip pool may not include employees who do not customarily and regularly receive tips, such as managers, dishwashers, cooks, chefs and janitors. Finally, paycheck deductions for uniforms, patrons who do not pay for their orders, broken dishes or cash register shortages are illegal if they reduce an employee’s wages below the minimum wage.

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 Columbia District Office at 803-765-5981 or visit http://www.dol.gov/whd/.

Date of Action: April 29, 2016

Type of Action: Appointment of receiver to cease dissipation of assets

Defendants: Enterprise Laundry Services Inc.
Margaret Matkowska

Action: U.S. District Court for the Northern District of Illinois, Eastern Division appointed Ira Bodenstein as independent receiver to take immediate possession and preserve all assets of Enterprise Laundry Services Inc., a Chicago-area commercial laundry services company. The action, by Judge Charles Norgle, comes after the company and its owner, Margaret Matkowska, dissipated corporate and personal assets recklessly and repeatedly failed to comply with three court orders to pay back wages and damages to workers for violations of the Fair Labor Standards Act’s minimum wage, overtime and recordkeeping provisions.

Under the three court orders, the employer owes back wages and damages to 61 workers, as well fines for civil contempt, totaling $249,426.63.

In violation of the court order, Matkowska recklessly dissipated at least $47,000 in corporate and personal assets since November 2015 by gambling and making large cash withdrawals at four Chicago-area casinos, sometimes using corporate payroll accounts to pay for her gambling habit. After discovering these large expenditures, the U.S. Department of Labor sought the appointment of an independent receiver to prevent further dissipation of wages and other damages owed to workers.

Judge Norgle has ordered Enterprise Laundry and Matkowska to immediately:

• Provide a financial statement detailing the value and location and contact information for any personal or corporate assets located in and outside the U.S.
• Transfer to the receivership all assets held jointly or singly or under their direct or indirect ownership or control in both the U.S. and foreign countries.
• Preserve, provide immediate access to and provide to the receiver all paper and electronic information and all other information of and/or relating to any assets.

Bodenstein, an attorney with Shaw, Fishman Glantz & Towbin LLC, will take control of the assets and liquidate them as necessary to comply with the court orders to pay back wages.

Background: An investigation by the department’s Wage and Hour Division found the Chicago-area commercial laundry service and Matkowska, violated the FLSA which resulted in the 2012 court order which enjoined the defendants from future violations.

After the company failed to pay the wages due and continued to violate the minimum wage and overtime requirements, the judge signed an Order of Civil Contempt against both the company and Matkowska on July 30, 2015. The order included fines of $150 per day until they complied. The order also required the defendants to demonstrate their compliance with the FLSA from January 2014 to the present by submitting payroll records to the division and to pay $5,000 in attorney’s fees. When they failed to comply as ordered, the court increased the daily fine to $200 and imposed additional sanctions on Nov. 6, 2015.

Quote: “Willfully ignoring court orders and gambling away corporate assets, at the expense of workers, will not be tolerated,” said Karin Chaikin, Regional Administrator for the Wage and Hour Division in Chicago. “The U.S. Department of Labor will use every tool available to us, including litigation, to ensure workers receive the money they have rightfully earned.”

Information: The FLSA requires that covered, non-exempt 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 must maintain accurate time and payroll records.

Court: U.S. District Court for the Northern District of Illinois, Eastern Division

Docket Number: 1:12-cv-01926
Perez v. Enterprise Laundry Services Inc., Margaret Matkowska

Employer: Guadencio C. Gozum, doing business as G.C. Gozum Construction

Site: 164 Torres St., Mong Mong, Guam 96910

Investigation findings: U.S. Department of Labor Wage and Hour Division investigators found that G.C. Gozum Construction paid employees straight time rates for overtime hours worked, in violation of the Fair Labor Standards Act. The employer also failed to record and pay employees for any time worked before or after their scheduled shifts.  

Resolution: G.C. Gozum Construction admitted to the violations found. The employer has paid $183,683 in overtime back wages and an equal, additional amount in damages to 158 employees.   

Quote: “Paying overtime when employees work more than 40 hours in a week is not a choice, it is a legal obligation,” said Terence Trotter, director of the Wage and Hour Division’s district office in Honolulu. “Just as there are building standards for the construction of residential and commercial structures, there are also baseline pay standards for the workers who provide those services. The back wages and damages paid in this case should send a strong message to other contractors shorting their employees. The Wage and Hour Division is committed to making sure that workers are paid every penny they have rightfully earned.”

Information: The FLSA requires that covered, non-exempt employees be paid at least the federal minimum wage for Guam 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 must maintain accurate time and payroll records, and 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/.

Date of Action: April 14, 2016

Type of Action: Fair Labor Standards Act consent judgment

Defendant: Gavri LLC doing business as Days Inn, 4056 Mt. Carmel Tobasco Rd., Cincinnati
Sandhya “Lina” Patel

Resolution: Under terms of  a consent judgment entered into U.S. District Court for the Northern District of Ohio, Western Division, Garvi LLC and owner, Sandhya Patel have paid six workers at Days Inn on Tabasco Road in Cincinnati $21,708 in overtime back wages.

Background: An investigation by the U.S. Department of Labor’s Wage and Hour Division found that the Days Inn hotel violated the Fair Labor Standards Act’s overtime provisions.  Investigators found that the company paid clerks at their normal hourly rates, without overtime, for workweeks of up to 72 hours. Additionally, the employer paid housekeepers on a per-room basis, without regard to how many hours they worked.  This resulted in overtime violations when the housekeepers worked more than 40 hours in a week. The company also failed to maintain accurate time records as required by the FLSA.

The judgment orders the defendants  to abide by the requirements of the FLSA in the future and to:

• Create and keep an employee handbook at the front desk that includes information about wages, overtime, and work schedules, along with contact information for the Wage and Hour Division.
• Provide each new employee a copy of that handbook upon hiring.
• Provide detailed wage statements to workers each pay period, allowing them to verify their hours worked, earnings, and pay.

In 2005, a division investigation found the same violations at the company involving both their own employees and those jointly employed by the hotel and International Staffing, of West Chester. The employers paid $7,812 in back wages to three employees as a result of that investigation. 

The department called upon some of its Russian-speaking investigators to communicate with the workers in the course of this investigation.

Quote: “Most American workers cannot imagine being told to work more than 70 hours a week, almost twice the norm, without being paid overtime,” said George Victory, district director for the Wage and Hour Division in Columbus. “Hotel workers are among the most vulnerable we see, generally earning low wages, with many facing language barriers and a fear of stepping forward when subject to wage violations. The U.S. Department of Labor will use every tool available to us, including litigation, to protect the rights of these workers.”

Information: The FLSA requires that covered, non-exempt 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 must maintain accurate time and payroll records.

Court: U.S. District Court for the Northern District of Ohio, Western Division

Docket Number: 1:16-cv-00462
Perez v. Gavri LLC

SAN FRANCISCO – A federal court has entered a consent judgment that orders a Silicon Valley electronics manufacturer to pay more than $80,000 in minimum wage and overtime back pay and an equal, additional amount in damages to its workers after the U.S. Department of Labor discovered violations of the Fair Labor Standards Act.  

Nearly $8,000 in civil money penalties were also assessed against the employer.

The department’s Wage and Hour Division investigators determined that BiTMICRO Networks, Inc. in Fremont brought computer engineers from its subsidiary in the Philippines to work in the U.S. and then paid them the same wages they earned in the Philippines, in pesos, ignoring legally required U.S. wage rates. Some workers received as little as the equivalent of $1.66 per hour, in Philippine pesos, and received no overtime pay when they routinely worked an average of 57 hours per week.

“The way these vulnerable, low-wage workers were treated by this employer is illegal, unethical, and unacceptable,” said Susana Blanco, director of the Wage and Hour Division office in San Francisco. “We will simply not tolerate employers bringing workers from Asia, or anywhere else, and failing to pay them every penny they have earned. We continue to see a pattern of U.S. companies misusing foreign worker visas by bringing them from overseas and paying them in pesos or rupees. The resolution of this case demonstrates the division’s commitment to identifying and rectifying these situations and to using every enforcement tool available to us to do so.”

The division also found that BiTMICRO violated the “hot goods” provisions of the FLSA by shipping goods produced by the Filipino employees in violation of wage laws out of state.

The consent judgment, filed in U.S. District Court for the Northern District of California, permanently enjoins the employer from future violations of the FLSA, and expressly prevents them from retaliating against any workers who assert their rights under the law. The judgment further requires the employer to provide all employees with a written notice of employee rights, and to keep electronic time records with the exact times when an employee starts and stops working.

Founded in 1995, BiTMICRO is a publicly traded tech company that develops, manufactures and deploys flash storage systems. Headquartered in Fremont, the company also has a subsidiary in the Philippines.

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

Employer: Allied Foundation Specialists Inc.

Site: 4906 Luella Ave., Deer Park, Texas

Investigation Findings: A U.S. Department of Labor Wage and Hour Division investigation found Allied Foundation Specialists Inc. violated the overtime and recordkeeping provisions of the Fair Labor Standards Act. 

Investigators found the employer:

• Paid laborers a flat day rate regardless of the number of hours they worked per week, resulting in overtime violations when they worked more than 40 hours per week.  Workers averaged 45 hours per week during five-day workweeks, and 53 hours per week when they worked 6 days.
• Kept a record of the number of days worked by its employees, but failed to keep a record of the number of hours worked, violating the FLSA’s recordkeeping provisions.

The division’s investigation is part of its initiative to improve labor law compliance in the construction industry.

Resolution: Allied Foundation Specialists will pay $682,318 in back wages to 161 employees, keep proper records and comply with all provisions of the FLSA in the future.  

Quote: “Construction workers know the value of hard-earned wages for long, tough days especially under a hot Texas sun,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “This is not the first time we’ve seen construction industry employers illegally paying flat day rates with no overtime pay. The resolution of this case should put other employers on notice if they’re paying their workers in this manner. We are committed to holding employers who violate the law accountable, so that workers are paid what they have earned, and so that employers who play by the rules do not find themselves at a competitive disadvantage.” 

Background:  Allied Foundation employs about 200 workers who perform foundation repair, house leveling, barrier root systems and sewer pipe replacements 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/.

Date of Action: April 22, 2016

Type of Action: Fair Labor Standards Act and Migrant and Season Agricultural Worker Protection Act
consent judgment

Defendant: Miguel Rosales Ruiz

Resolution: The U.S. Department of Labor has obtained a consent judgment in federal court ordering Miguel Rosales Ruiz to pay 33 workers at Southwest Michigan Produce Center in Eau Claire, Michigan, a total of $14,628, which includes $7,314 in back wages for minimum wage and overtime violations, plus an equal amount of liquidated damages. Additionally, Ruiz paid $7,300 in civil money penalties assessed for violations of the MPSA.

An investigation conducted by the department’s Wage and Hour Division found that Ruiz violated the Fair Labor Standards Act’s minimum wage and overtime provisions and the Migrant and Seasonal Agricultural Worker Protection Act’s wage payment, wage statement and recordkeeping provisions.

Investigators found Ruiz, a farm labor contractor, failed to pay workers the legally required federal minimum wage, currently $7.25 per hour, to pay them overtime at time-and-a-half for hours worked beyond 40 in a workweek, and to maintain accurate time records as required by the FLSA. Additionally, the employer failed to disclose working conditions to employees in writing, to provide wages statements, and to pay workers in a timely manner, as required by the MSPA.

The minimum wage violations resulted when Ruiz paid workers to wash, process, and pack watermelons at Southwest Michigan Produce Center on a piece-rate basis, and failed to make up the difference when piece rates earned totaled  less than the required $7.25 per hour. Overtime violations resulted from failure to pay piece rate employees overtime premium when they worked more than 40 hours in a week. 

Workers in agricultural packing or processing operations are normally entitled to overtime pay under the FLSA unless the work involves an agricultural product produced on the farm where the packing or processing is taking place.

Ruiz has also agreed to abide by the requirements of both the FLSA and MPSA in the future and to:

• Provide each worker a copy of the terms and conditions of employment on their first day of work and obtain a signed declaration of receipt in the worker’s native language.
• Provide detailed wage statements each pay period, allowing workers to verify their hours worked, piece rate earnings, and pay.
• Designate an employee to stock and maintain drinking water and sanitary facilities.
• Provide each worker with the telephone number of the State Monitor Advocate for the state in which work is being performed.

The agreement also stipulates that any violations of the order within the next five years may result in the revocation of Ruiz’s Farm Labor Contractor Certificate.

Quote:  “The work of the Wage and Hour Division helps ensure that the fruits and vegetables sold to the American people are produced under fair and equitable employment conditions,” said Mary O’Rourke, district director for the Wage and Hour Division in Grand Rapids. “This judgment sends a message to employers that unfair treatment and exploitation of migrant and seasonal farm workers will not be tolerated. These workers deserve to be paid every penny they have rightfully earned.”

Court: U.S. District Court for the Western District of Michigan, Southern Division

Docket Number: 4:13-cv-15147-MAG-RSW