SAVANNAH, Ga. – A 17-year-old worker, who died when a car fell off a hydraulic lift and crushed him in November 2015,  was operating hazardous equipment in violation of federal law at a Savannah motor vehicle shipping facility, the U.S. Department of Labor has determined.

An investigation by the department’s Wage and Hour Division’s Atlanta District Office found that Cars Loading LLC violated child labor provisions of the Fair Labor Standards Act by hiring Marco Rosales to operate a reciprocating saw, circular saw and forklift to cut and dismantle cars for overseas shipment. On Nov. 30, 2015, Rosales was working on a car when the sedan fell off the lift. He was found trapped between the vehicle and the vertical leg of the lift.

Cars Loading paid a civil money penalty of $25,450 for the child labor violations that led to Rosales’ death. The division also invoked its “hot goods” provision to prevent the interstate shipment of goods produced in violation of the minimum wage, overtime or child labor protections under the Fair Labor Standards Act. The firm did not ship anything from the establishment for 30 days after the minor’s death.

The employer also misclassified Rosales and its other employees as independent contractors, the division found. Cars Loading also failed to obtain Morales’ date of birth, and failed to keep time and pay records for their employees. The misclassification of employees as independent contractors presents a serious problem for affected employees, employers and the entire economy. Misclassification often denies employees access to critical benefits and to workplace protections afforded to employees. The company is now complying with the FLSA.

The incident also led workplace safety and health inspectors from the department’s Occupational Safety and Health Administration to open a concurrent investigation. On April 8, 2016, the agency cited the company for nine serious and two other-than-serious safety violations. The company has agreed to pay $13,860 in penalties.

“The death of this young man is a grim reminder of what can happen when minor-aged workers are illegally required or permitted to operate hazardous equipment,” said Eric Williams, the Wage and Hour Division’s district director in Atlanta. “Employing young people provides valuable experience, but experience must never come at the expense of our children’s health or well-being. This tragedy is a wake-up call to companies that employ young workers to review their labor practices to ensure that they comply with critical, legally mandated worker protections.”

Based in Savannah, Cars Loading, LLC contracts with customers who need to have their vehicles shipped overseas. The firm completes U.S. Customs paperwork, prepares vehicles for shipment and arranges transportation to port. 

The FLSA establishes a minimum age of 18 for workers in those nonagricultural occupations that the secretary of labor declares to be particularly hazardous for 16- and 17-year-old workers or detrimental to their health or well-being. Youth ages 14 and 15 may be employed outside of school hours in a variety of nonmanufacturing, non-mining and non-hazardous jobs for limited periods of time and under specified conditions. These rules must be followed unless a specific exemption applies. A list of hazardous occupations prohibited for minors is available on the division’s website at http://www.dol.gov/elaws/esa/flsa/docs/haznonag.asp More information on child labor rules can be found at http://youthrules.dol.gov/ or call the division’s toll-free helpline at 866-4US-WAGE (487-9243) for more information.

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MINNEAPOLIS – The U.S. Department of Labor’s Wage and Hour Division will offer a comprehensive compliance seminar for federal contractors, unions and workers to provide information on the rules governing prevailing wage requirements under the Davis-Bacon Act, McNamara-O’Hara Service Contract Act, Executive Order 13495 wage rules for non-displacement of qualified workers and Executive Order 13658 establishing a minimum wage for contractors.

The seminar will be held May 3-5 at the Doubletree by Hilton, Bloomington-Minneapolis South, 7800 Normandale Blvd. in Bloomington.  

“The U.S. Labor Department is committed to ensuring that all of our stakeholders – contractors, contracting officials, unions, workers and others – understand and comply with the wage and fringe benefit requirements that apply to federal and federally assisted contracts,” said Karen Chaikin, Midwest regional administrator for the Wage and Hour Division. “We are pleased to provide the contracting community with this free prevailing wage seminar that is a key component of the division’s ongoing effort to foster good jobs through increased awareness and enhanced compliance of federal prevailing wage requirements.”

Check-in for the conference will be from 7 to 9:30 a.m. on May 3, with the program running from 9:30 a.m. to 4:30 p.m. that day. On May 4 and 5, the seminar will run from 8 a.m. to 4:30 p.m.

Seminar attendance is free; however, preregistration is required. Registration can be completed through the online registration link at Minneapolis Prevailing Wage Seminar.

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

PHILADELPHIA – The U.S. Department of Labor’s Wage and Hour Division is conducting a building construction survey in New York’s Jefferson, Madison, Onondaga and Oswego counties to collect data on wages paid to workers on all active building construction projects in those counties between Jan. 1, 2015 and Dec. 31, 2015, New Hampshire between April 1, 2014, and March 31, 2015. This survey is not limited to federally funded construction projects. The information provided will help establish prevailing wage rates, as required under the Davis-Bacon and Related Acts.

“Davis-Bacon prevailing wage rates should reflect the actual wages and fringe benefits paid to construction workers in the locations where the work takes place. This can only happen with full participation by the construction industry community in Jefferson, Madison, Onondaga and Oswego counties,” said Mark Watson, the division's regional administrator for the Northeast. “Participation by contractors and interested parties is crucial. Low response can lead to wage rates that do not reflect wages and incomplete wage determinations, which leads to an increase in requests for additional classifications.”

Notification letters and data collection forms, known as WD-10s, are being sent to interested parties and contractors known to the Wage and Hour Division. Data must be postmarked by Oct. 31, 2016, to be included. To complete the survey electronically, visit www.dol.gov/whd/programs/dbra/wd10/index.htm.

You do not need a letter to answer the survey. If you would like to participate, or have questions regarding the survey process or completing the WD-10 form, contact Ellen Hill at 267-687-4031.

Employer: St. Luke’s Regional Medical Center

Sites: 390 E. Bannock, Boise, Idaho

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division found systemic violations in St. Luke’s Regional Medical Center’s administration of the Family and Medical Leave Act. As a result of the violations, the employer failed to ensure that all employees on FMLA-covered leave received all the protections due to them under the law. Violations included failing to maintain employees’ benefits while they were absent from their jobs during protected leave, and failing to ensure that employees, upon returning to work, were reinstated to job positions equivalent to those they held before going out on FMLA leave.   

Resolution: St. Luke’s cooperated fully during the investigation and immediately remedied the violations. The employer corrected all administrative errors, potentially affecting approximately 13,000 employees throughout the state.

Quote: “This resolution provides piece of mind for employees of St. Luke’s and their families who rely upon the FMLA’s critical workplace flexibility and protections,” said Thomas Silva, district director for the Wage and Hour Division in Portland. “We are very pleased that this employer took immediate action to ensure that employees receive all the benefits they are entitled to under the FMLA. Workers should never have to choose between their jobs and their health.”

Information: The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave.

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/.

CORPUS CHRISTI, Texas – A U.S. Department of Labor Wage and Hour Division investigation uncovered that the Nueces County Sheriff’s Office altered employee time sheets and did not pay its employees legally required overtime compensation.

The division’s McAllen District Office investigators found the Sheriff’s Office violated the overtime and recordkeeping provisions of the Fair Labor Standards Act. The department routinely altered time sheets to reflect only the scheduled work hours, and failed to accurately reflect any additional time worked. The department also failed to keep accurate records, as required by law. Affected employees included corrections officers, cadets in the corrections department, patrol and civilian employees.

“These hard working employees, who put themselves in harm’s way every day, deserve to be paid every penny they have rightfully earned,” said Betty Campbell, Southwest regional administrator for the Wage and Hour division. “Their jobs are to protect the rest of us, yet in this case, they were the ones who needed protection.  The resolution of this case should send a strong message to other employers who may be shorting their workers – no one, including a law enforcement agency, is above the law. Our division will continue to use every enforcement tool available to ensure a fair day’s pay for a fair day’s work.”

Following the investigation, the Sheriff’s Office paid $717,000 in back wages to 473 employees, and was assessed more than $52,000 in civil money penalties. In an agreement with the federal government, the Sheriff’s Office is required to:

• Implement a bio-metric sign-in system for all county employees to track working hours.
• Train all newly elected officials, managers, front-line supervisors, record keeping personnel and human resource staff in the FLSA’s minimum wage, overtime, and record-keeping requirements.
• Provide current and future employees with information about legal protections covering payment for hours worked, rest and meal breaks.
• Provide a method for employees to file anonymous complaints.
• Prohibit the discharge of or discrimination against any employee who raises concerns.
• Provide employees with information concerning FLSA anti-retaliation provisions.  
• Provide general notice of FLSA protections to its employees.

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, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers must maintain accurate time and payroll records.

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/.

Employer(s):

Investigation sites: Various locations in the Charleston, South Carolina area.

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division, Columbia District Office, found the employer violated overtime, minimum wage and recordkeeping provisions of the Fair Labor Standards Act at 13 establishments in the Charleston area. Specifically, the division found minimum wage violations of the FLSA that stemmed from the employer’s practice of requiring servers to give a percentage of their tips back to the employer, and requiring three servers to work for only tips. Under the FLSA, tips are the property of the employees who receive them; however, restaurant operators can benefit by claiming a credit, based on the tips, toward their obligation to pay those employees the full minimum wage. When an employer does not comply with the requirements to use the tip credit, the credit may be denied and the employer will be required to pay the full federal minimum wage, currently $7.25 per hour for all hours worked. The employer also required workers at some locations to purchase their uniforms, which reduced their earnings below the minimum wage. The division also found the employer failed to pay cooks, dishwashers and runners for all hours worked which resulted in these employees not earning minimum wage for all of their hours and not receiving time-and-one-half for their hours worked beyond 40 in a workweek. The employers failed to keep legally mandated time and attendance records.

Resolution: On April 18, 2016, Judge C. Weston Houck, of the U.S. District Court for the District of South Carolina, Charleston Division, approved a consent judgment between the department and La Hacienda and its owners, Antonio Ayala and Jaime Tinoco. La Hacienda and its owners will pay a total of $1,179,045 to 119 employees, which includes $589,523 in back wages and an additional equal amount in liquidated damages for all affected employees who worked at any of the 13 restaurants from Aug. 13, 2011 to Dec. 13, 2014. The employers have agreed to comply with the FLSA. The investigation was litigated by the department’s Regional Office of the Solicitor in Atlanta.

Quote: “Our investigation of these 13 Charleston-area restaurants found many low-wage employees working long hours without any overtime compensation and, at times, earning wages far below the federal minimum wage. Labor violations like these are unfortunately all too common in the restaurant industry,” said Jamie Benefiel, director of the division’s Columbia office. “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 assess liquidated damages – where appropriate – to remedy widespread labor violations and ensure a level playing field for law-abiding employers.”

Information: Under the FLSA, when customers tip employees, restaurant operators can benefit by claiming a credit toward their obligation to pay those employees the full minimum wage. An employer that claims this tip credit is required to notify its employees of its intention to take a tip credit, and to pay a tipped employee not less than $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 the federal minimum wage of $7.25 per hour the employer must make up the difference. The federal minimum wage of $7.25 per hour was last increased in 2009, and the minimum cash wage for tipped workers was last increased in 1991. Tips are the property of the employee who receives them. The FLSA also requires that employees receive time and one-half their regular rate of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Additionally, employers must maintain accurate time and payroll records.

For more information about the FLSA, call the Wage and Hour Division’s Columbia office at 803-765-5981 or its toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/. 

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Date of Action: April 12, 2016

Type of Action: Lawsuit seeking debarment from future government contract awards

Name of Defendant: Carney W. Potter, doing business as Arrowhead Starr Co. and Carney W. Potter, individually, in Plainview, Arkansas. Arrowhead Starr is a forest maintenance contractor that provides reforestation services to the federal government.

Allegation: The U.S. Department of Labor sued Carney W. Potter, doing business as Arrowhead Starr Co. and Carney W. Potter individually, seeking to debar both from future government contract awards as the result of a long history of failing to pay workers the wages they were legally due. The latest violations disclosed by the department’s Wage and Hour Division occurred when the employer violated the McNamara-O’Hara Service Contract Act by failing to pay 14 employees more than $10,000 in legally required fringe benefits, including  vacation and holiday pay. The employer’s history of violations began in 2001; since 2008, the Wage and Hour Division has collected more than $130,000 in back wages paid to more than 70 workers.

Quote: “Reforestation is hard and dangerous work often performed in remote worksites. Many of these workers have little knowledge of their rights under the law, and depend on their employer to pay them what is legally required,” said Betty Campbell, the division’s Southwest regional administrator. “Contractors bid on government-funded contracts knowing their responsibilities. Failing to pay employees all their wages and benefits for the work they performed is unacceptable. This case should serve as a warning to other contractors performing work on government contracts – the Wage and Hour Division will use every tool available – including debarment, to protect workers and hold employers accountable.”

Resolution: The division’s most recent investigation recovered approximately $10,090 in SCA back wages for 14 employees. The department also seeks to declare Carney W. Potter individually and doing business as Arrowhead Starr Co., ineligible to receive any further federal contacts for a period of three years.

Information: Debarment is an important and effective tool the department uses to ensure that employers pay workers as the law requires, and that the federal government is doing business with responsible contractors. Employers who fail to comply with the law risk debarment and face losing the ability to do business with the federal government. 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.

Court: Office of Administrative Law Judges

Docket Number: 2016-SCA-00009

SAN FRANCISCO – A San Leandro-based human resources outsource provider will pay $1 million in back overtime wages and damages combined to hundreds of employees after a U.S. Department of Labor investigation that found widespread Fair Labor Standards Act violations.

The department’s Wage and Hour Division cited TriNet Human Resources Corp. for failing to pay time-and-a-half to 267 employees who worked more than 40 hours per week. As a result, the company will pay back pay wages and damages to workers in amounts ranging from a few hundred dollars to more than $13,000 for one worker. The division also assessed $58,000 in civil penalties for the violations.

In 2012, the company paid $326,000 in back wages and damages after the division found similar violations.

“TriNet falsely believed that raising an employee’s salary exempted them from receiving overtime pay,” said Susana Blanco, the division’s Wage and Hour director in San Francisco. “Hopefully, the company will now pay better attention to the rules going forward and pay its employees the wages they earned.”

TriNet provides human resources outsource solutions to small and midsize businesses. It offers payroll processing, human capital consulting, employment law compliance and employee benefits, including health insurance, retirement plans and workers compensation insurance.

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 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 division, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Wage and Hour’s services are free and confidential. Information also is available at http://www.dol.gov/whd/.

Employer name: Los Arcos Seafood & Grill Inc., doing business as Los Arcos Mexican Grill & Seafood Jose Gutierrez, Jr.
Martin Romo

Investigation site: 3798 Nolensville Road, Nashville, Tennessee 37211

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division found that Los Arcos Mexican Grill & Seafood violated minimum wage and overtime provisions of the Fair Labor Standards Act. The employees were working as cooks, dishwashers and servers. Their employer paid the workers a salary for all hours worked, but not overtime for hours beyond 40 in a workweek as required. In some pay periods, the parties involved did not pay employees the current federal minimum wage of $7.25 per hour. The department filed a complaint on Nov. 1, 2012, in U.S. District Court for the Middle District of Tennessee against Los Arcos Mexican Grill & Seafood and owners Jose Gutierrez, Jr., and Martin Romo. Gutierrez and Romo were subject to a prior injunction issued in September 2009 that required compliance with the FLSA.

Resolution: On April 13, 2016, a federal judge from the U.S. District Court for the Middle District of Tennessee, Nashville Division, approved a consent judgment between the department and Los Arcos Mexican Grill & Seafood, Gutierrez and Romo. As a result, Los Arcos and its owners will pay 44 employees a total of $175,000, which include back wages and liquidated damages. The judgment also requires Gutierrez and Romo to hire a consultant to audit their restaurants for three years and submit quarterly reports to the division. Additionally, the owners have agreed to provide current and prospective hires with information on the FLSA and to purchase an ad in a local Hispanic newspaper regarding compliance with the FLSA. The division’s Nashville District Office conducted the investigation and the department’s Regional Office of the Solicitor in Nashville litigated the case.

Quote: “The outcome of our investigation of Los Arcos Mexican Grill & Seafood and its owners demonstrates that the underpayment of employees’ wages is unacceptable, and will not be tolerated. The U.S. Department of Labor will use all available tools, including litigation, to identify and root out such labor violations and make whole the affected workers,” said Nettie Lewis, director of the division’s Nashville District Office. “The violations found in this investigation are unfortunate and all too common in the restaurant industry. We will continue our industry enforcement effort to protect workers’ rights and the interests of employers that obey the law and face unfair competition from those who do not.”

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 Nashville District Office at 615-781-5344 or visit http://www.dol.gov/whd/.

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Employer: ViaSource Solutions Inc., formerly INW Contact LLC, a call-center provider to businesses that market products on television infomercials

Location: 223 East Thousand Oaks Blvd., Suite 222, Thousand Oaks, California

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found ViaSource Solutions misclassified hundreds of call-center agents as independent contractors rather than employees, and subsequently denied them minimum wage and overtime for hours they worked, in violation of the Fair Labor Standards Act. The firm also failed to pay employees for time spent in training, creating additional violations of the FLSA.   

Resolution:  ViaSource has reclassified all call-center agents as employees and will pay $101,491 in back wages for minimum-wage violations to 435 employees plus $48,893 for unpaid overtime due to 165 employees.  

Quote: “The resolution of this investigation of ViaSource Solutions sends a clear message to employers who try to reduce overhead costs at the expense of their workers,” said Kimchi Bui, director of the Wage and Hour Division in Los Angeles. “Whether a worker is an employee or an independent contractor under the FLSA is a legal question, determined by the actual employment relationship – not by any title, or any agreement between an employer and employee. We take worker misclassification very seriously, and will hold employers accountable to classify workers properly and to provide them with all the benefits entitled by law.”

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/.