MADISON, Wis. – In a town where images of the state university’s mascot “Bucky Badger” are common in restaurants and hotels alike, U.S. Department of Labor investigators are actively engaged in an education and enforcement effort to make sure employers do not deny hospitality workers the “bucks” they have earned legally.

Too often, many low-wage restaurant and hotel workers fall victim to their employers’ violations of the Fair Labor Standards Act’s overtime, minimum wage and record-keeping provisions. In college towns like Madison, hospitality jobs may be transient and seasonal, making those who fill these jobs especially vulnerable to unscrupulous employers.  

The department’s Wage and Hour Division ongoing initiative in the hospitality industry has found 24 area  restaurants and hotels owe more than $724,000 in back wages to 275 workers. Investigations at additional establishments continue

“Hospitality industry jobs are often filled by students, temporary, or foreign workers – many of whom are new to the workforce. They are often unfamiliar with wage laws and their rights,” said Karen Chaikin, regional administrator for the Wage and Hour Division in Chicago. “Language barriers, fear of retaliation and fears about immigration status can cause these workers to be among those least likely to speak up leaving them vulnerable to exploitation. We are committed to using every tool at our disposal to ensure that these workers are paid every penny they have rightfully earned, and that employers in this industry who play by the rules do not find themselves at a disadvantage to those who do not.”

Violations disclosed in these investigations include:

• Paying employees fixed salaries without regard to how many hours they worked, leading to overtime violations when they worked more than 40 hours in a week. 
• Improperly calculating overtime for tipped employees..
• Paying overtime in cash, off-the-books,  at “straight time” rates. Deducting the cost of uniforms, breakages, or shortages from workers’ pay; reducing their hourly wages below the federal minimum wage.
• Failing to keep accurate and thorough records of employees’ wages and hours worked.
• Failing to pay for all hours worked.
• Paying servers tips only.
• Requiring tipped employees to surrender tips to an illegal tip pool; and
• Requiring minor-aged employees to work outside of the hours allowed by the law.

Investigators found violations at the following 24 Madison area establishments:

• Laredo’s Mexican Restaurant: (Two Madison and one Fitchburg location) 86 employees are due $402,391.
• Cocina Real in Middleton: 27 employees are due $118,471
• World Buffet (D’Onofino Street and South Town Mall, and one location in Monona): 17 employees have received $61,131 in back wages.
• Food Fight Restaurant Group:17 employees are due $23,603.
• Journey Sushi and Seafood Buffet: Five employees are due $19,568.
• Pasqual’s Cantina: (Three locations) Four employees are due $18,388.
• State Street Brats: 84 employees are due $15,033.
• Wisco Hotel Group in Fond du Lac: Four employees are due $11,924.
• Benvenuto’s Italian Grill: Six employees are due $8,454.
• Bluephies: Two employees have been paid $7,389 in back wages.
• Takara Japanese Restaurant: (Two locations) 10 employees are due $7,305.
• Brocach Irish Pub: (Two locations) Two employees are due $6,981.
• Comfort Suites: One employee is due $2,731.
• Holiday Inn Hotel & Suites- Madison West: Four employees are due $2,494.
• Parkway Family Restaurant: Two employees have received $915 in back wages.
• Staybridge Suites, Madison East Hotel Group, 3301 City View Drive: One employee has been paid $29 in back wages.

During an education and enforcement initiative, in addition to conducting investigations, the division conducts outreach events for employers and industry stakeholders to provide compliance assistance and information on legal rights and responsibilities. The initiatives also raise awareness among workers, community organizations and others regarding federal wage and hour laws and protections.

“We have provided informational sessions to student groups at the University of Madison and the Worker Rights Center of Madison on wage rights and laws,” said David King, district director for the Wage and Hour Division in Minneapolis, which conducted the initiative. “The violations disclosed in this initiative are far too common. We are doing everything we can to increase knowledge and awareness of the laws so workers are paid their hard earned wages.”

In 2014, the division began an education and enforcement initiative in the hospitality industry in Midwest college towns and resorts. The division has conducted investigations of restaurants and hotels in Ann Arbor, Michigan, Bloomington, Indiana, Lawrence, Kansas; Ames and Iowa City, Iowa. The initiative will continue in additional locations. 

Nationwide, the Wage and Hour Division recovered more than $38 million for 46,902 workers in the restaurant industry in fiscal year 2015.

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 for hours worked beyond 40 per week. In accordance with the FLSA, an employer of a tipped employee is required to pay no less than $2.13 an hour in direct wages, provided that amount plus the tips received equals at least the federal minimum wage of $7.25 per hour. If an employee’s tips, combined with the employer’s direct wages do not equal the minimum wage, the employer must make up the difference. Employers also are required to provide employees notice of the FLSA tip credit provisions and to maintain accurate time and payroll records. 

Accessible and searchable information on enforcement activities by the department is available at http://ogesdw.dol.gov/homePage.php.

For more information about the FLSA and other federal labor laws, call the division’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

Employers: Muir Orthopedics Specialists

Sites: 2625 Shadeland Drive, Walnut Creek, California

Investigation findings: Investigators with the U.S. Department of Labor’s Wage and Hour Division found that Muir Orthopedics Specialists violated the Family Leave Medical Act by terminating an employee who needed to take medical leave despite the fact that the employee provided written notice from her health care provider that demonstrated she needed the time off for a FMLA-qualifying health condition. The investigation determined that the employer failed to notify the employee of her rights, and failed to designate the leave as FMLA-protected. 

Resolution: Muir Orthopedics paid $18,683 in back wages and an equal, additional amount in damages to the terminated employee to remedy the violation.

Quote: “In this case, an employee was suddenly left without a job or a paycheck because her employer terminated her illegally,” said Susana Blanco, director of the San Francisco District Office. “This employee suffered emotional and financial stress at a time when she could least afford it. This investigation demonstrates the U.S. Department of Labor’s commitment to ensuring that employees are not retaliated against or prevented from exercising their FMLA rights.”

Information: The FMLA provides eligible employees up to 12 weeks of unpaid, job-protected leave due to their own or a family member’s serious health condition with continuation of health care 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/.

Employer’s names: Red Diamond Enterprises Inc., doing business as Red Diamond Farms
German “Javier” Torres, president and owner

Investigation sites: Wimauma, Sarasota, Quincy and West Palm Beach, Florida

Investigation findings: Investigators from the department’s Wage and Hour Division Tampa District Office found that Red Diamond Farms and Torres violated provisions of the Fair Labor Standards Act, Migrant and Seasonal Agricultural Worker Protection Act and H-2A temporary agricultural program. Specifically, investigators found the employer:

• Provided preferential treatment to H-2A guest workers over corresponding domestic workers when it paid the guest workers higher rates and offered them more hours than the domestic workers, and failed to offer free housing or pay transportation costs to the domestic workers;
• Failed to disclose the conditions of employment to the domestic workers when they were not provided a contract, as the law requires;
• Concealed the presence of the domestic workers by segregating the payrolls, and denying their presence during the investigation;
• Failed to keep accurate and complete payroll records.

In the course of the two-year investigation, agency investigators also determined that 380 employees were due back wages stemming from underpayments and the company’s failure to meet the full terms and conditions of the H-2A contract.

Proposed Penalties: The department has assessed Red Diamond Farms and Torres civil money penalties totaling $1,488,800 for the H-2A, MSPA violations. The employer has paid the back wages totaling $149,572. In addition to collecting civil penalties, the department is also moving forward with debarring the employer from the H-2A program.

Quote: “Red Diamond Farms and its owner willfully disobeyed federal labor laws and exploited vulnerable, low-wage workers. These actions are unacceptable,” said Wayne Kotowski, regional administrator for the Wage and Hour Division in Atlanta. “Guest worker programs must protect U.S. and foreign workers simultaneously.  This is another example of the department’s commitment to use every enforcement tool available – including civil penalties and debarment from these programs – to combat these violations and protect workers.”

Background:  Based in Wimauma, the company has farms in Florida, Georgia and Tennessee. Red Diamond Farms grows several varieties of vine-ripened tomatoes, peppers and squash and through Tomato Thyme Corp. ships to major grocery chains and numerous retailers across the U.S., Canada and Puerto Rico. Customers include; Safeway, Amish Markets, Publix, Meijer’s, Stew Leonard’s, Morton Williams, King Kullen, Eataly, Manhattan Fruit Exchange, Grace’s Market Place Agatha Gourmet Garage, Garden of Eden, Loblaw’s, Kroger, Schuck’s Market, AWI, Tops Friendly Markets, Sendinks Market, Brennan’s Market, Fairway and Sobey’s. 

Information: For more information about MSPA and H-2A requirements please visit:

http://www.dol.gov/whd/regs/compliance/whdfs49.pdf https://www.foreignlaborcert.doleta.gov/faqsanswers.cfm#gotoh2

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 Tampa District Office at 813-288-1242 or visit http://www.dol.gov/whd/.

CHARLOTTE, N.C. – 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 division will hold the event May 23-25 at the Sheraton Charlotte Airport, 3315 Scott Futrell Drive.   

“The U.S. Department of Labor’s Wage and Hour Division invites federal contractors, union leaders and workers to attend our upcoming prevailing wage seminar. The event seminar provides an opportunity for the agency to give face-to-face training to federal contractors, unions, workers, contracting officials, and other interested parties. We are committed to ensuring that all stakeholders understand compliance with the wage and fringe benefit requirements that apply to federal and federally assisted contracts,” said Wayne Kotowski, regional administrator for the Wage and Hour Division in Atlanta.  

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

Check-in for the conference will be from 7-9:30 a.m. on May 23, the program will run from 9:30 a.m. to 4:30 p.m. that day. On May 24 and 25, the seminar will run from 8 a.m. to 4:30 p.m.

For more information on DBRA, 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/.

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/.