Employer: C and D’s Guest Homes, Inc., provider of residential care services for adults with developmental disabilities, doing business as C and D’s Guest Home and New Horizon’s Residential

Sites: 2960 Palomino Lane, Atwater, California (main office)
336 Judy Drive, Atwater, California
263 Elm Ave., Atwater, California
3626 Langtry Ave., Merced, California
804 East Clinton Ave., Atwater, California
6314 Atwater Jordan Road, Atwater, California
2585 Roselle Drive, Merced, California (doing business as New Horizon’s Residential)

Investigation findings:  The U.S. Department of Labor’s Wage and Hour investigators found C and D’s Guest Homes in violation of overtime, minimum wage and record-keeping provisions under the Fair Labor Standards Act. The employees received overtime pay only after working 80 hours in a two-week pay period rather than after the 40-hour weekly threshold. The employer also paid a differential to employees working a split shift, and did not include the differential when computing the worker’s overtime rate. Additionally, the firm deducted eight hours of sleep time from 24 hours shifts regardless of repeated interruptions throughout the night, resulting in employees earning less than the current federal minimum wage of $7.25 per hour. 

Resolution: C and D’s Guest Homes will pay 31 workers $43,582 in back wages. The employer will install a timekeeping system for employees to record their worked hours.

Quote: “This industry employs some of the most vulnerable, low-wage workers we see, working in a field plagued by labor violations,” said Richard Newton, director of the Wage and Hour Division’s Sacramento District Office. “The division continues to fight this disturbing wage violation trend in residential care facilities, which harms not only workers and their families, but creates a competitive disadvantage for those businesses that follow the law.”

Information: For more 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: Litke Investments LLC, a San Francisco-based real estate investment enterprise, acquires, maintains and manages hotels and residential apartments.

Sites: Numerous hotels and apartments operating under various legal and trade names in California, Texas, Oregon and North Dakota.

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found Litke Investments:

• Violated the overtime provisions of the Fair Labor Standards Act when it improperly classified hourly-paid property managers and exempt from receiving overtime and paid them at straight time rates for hours worked.
• Incurred further overtime violations when it paid other workers straight time for hours worked beyond 40 per week.
• Failed to combine the hours worked by employees working at multiple locations throughout the week when determining whether overtime was due.
• Did not keep complete and correct time records for employees, in violation of FLSA’s record keeping provisions.

The division investigated Litke in 2011 and found similar overtime violations.

Resolution: The owner of Litke Investments has paid $51,429 in overtime back wages and an equal, additional amount in liquidated totaling $102,858 to 75 employees. In addition, the company paid civil money penalties totaling $8,030 due to the willful nature of the repeated violations found.

Quote: “Litke Investments deprived its workers of hard-earned overtime wages to which they are entitled by law,” said Susana Blanco, director of the U.S. Department of Labor’s Wage and Hour Division in San Francisco. “Other employers should review their pay practices to ensure that they are in compliance. The back wages, damages and penalties paid in this case demonstrate that the department is determined to ensure workers receive a fair day’s pay for a fair day’s work. We will stop those employers who skirt the law so that we ensure other businesses can compete fairly.”

Information: For more 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.

FLSA: 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.

NEW YORK – Nail salon workers in one of the world’s largest cities work hard to serve their customers. At the same time, they are what the U.S. Department of Labor refers to as vulnerable workers – unaware of their rights, sometimes with language barriers, or reluctant to step forward to complain.

Working amid possible health hazards, nail salon workers also frequently go home underpaid or not paid at all for their labor. The Wage and Hour Division is actively determined to address this injustice as shown by its actions involving two New York City salons found to be in violation of federal overtime and recordkeeping rules.

The division’s investigators found that Ada Nails & Spa, at 81 W. Broadway in Manhattan, paid employees a flat rate per day plus commissions without regard to the number of hours they worked. Consequently, the salon failed to pay overtime when employees worked more than 40 hours in a workweek; failed to record all hours worked by employees; and failed to maintain other basic employment and payroll records as required by law. The second investigation found Hai Hua Beauty Salon Inc., at 151-91B Cross Island Parkway in Whitestone, also paid flat daily rates without regard to the number of hours actually worked; failed to pay overtime for hours worked beyond 40 in a week; and failed to keep accurate and complete payroll records.

Ada Nails & Spa paid $23,704 in overtime back wages to 12 employees while Hai Hua Beauty Salon Inc. paid $23,643 in overtime back wages to nine employees.

“The experience of these employers should serve as a lesson to all of New York City’s nail salon owners. This industry employs large numbers of vulnerable workers, many of whom may be unaware of their rights, may face language barriers, or may be reluctant to step forward to complain. We want nail salon employees to know their rights, and employers to know their responsibilities to prevent these violations from occurring,” said Debbie O. Lau, the Wage and Hour Division’s assistant district director in Manhattan. “We provide numerous tools to educate employers and employees in a variety of languages, including Chinese, Spanish, Korean, Thai, Vietnamese and Nepali. Our investigators are fluent in most of these languages and can obtain translations for others. Both workers and employers can speak with Wage and Hour representatives confidentially. All parties should also understand that we enforce the law regardless of a worker’s immigration status.”

Here are some of the basic protections required by the Fair Labor Standards Act:

Payment for Hours Worked:

• Workers must be paid for all the time they spend performing work, whether or not the employer approves the work in advance. This includes time spent in training, traveling from site to site during the day, and any work performed “off the clock.”

Minimum Wage and Deductions:

• Workers must be paid at least the federal minimum wage of $7.25 per hour for every hour that they work.
• Even if paid by the day or at a piece rate, the payment received, when divided by the number of hours actually worked, must equal at least the federal minimum wage for every hour worked.
• Some state laws require higher minimum wages and/or greater employee protections. Employers must comply with all laws that apply to their businesses.

Overtime Pay:

• Generally, workers must be paid 1½ times their regular rates of pay for every hour worked beyond 40 in a workweek.

Recordkeeping:

• Employers must keep accurate records of all their employees’ daily and weekly hours worked, and wages paid.
• Employees should keep their own records of their work hours and wages, and their employer’s name, address and phone number.

Independent Contractor or Employee?

Some salons incorrectly label workers “independent contractors” when they are actually employees. It is important for workers to know the difference between the two because employees are legally entitled to greater health and safety protections, wage protections and other benefits.

• Workers who are not sure whether they are employees or independent contractors should contact the Wage and Hour Division, who can provide information to help determine employees’ workplace rights.

It is illegal for an employer to fire workers or retaliate against them in any way for contacting the Wage and Hour Division or for exercising their workplace rights.

If workers believe their rights have been violated or have any questions, they can call the Wage and Hour Division at 1-866-487-9243 or in New York City at 212-264-8185 (Manhattan) or 718-254-9410 (Brooklyn). The division can assist in nearly any language, and its services are free and confidential.

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BOSTON – The U.S. Department of Labor is suing two Gloucester fish processing companies and their owner for violations of the Fair Labor Standards Act. The department’s Wage and Hour Division found that Zeus Packing Inc., Cape Ann  Seafood Exchange and owner Kristian Kristensen owed $203,998 in unpaid wages and an equal amount in liquidated damages totaling $407,996  to 132 workers for the period October 2011 through September 2014. The defendants paid the back wages to the division in December 2015, but have so far refused to pay the liquidated damages.

The department’s lawsuit was filed in the U.S. District Court for the District of Massachusetts. It asks the court to order the defendants to pay the $203,998 in liquidated damages to the workers, plus any back wages and additional liquidated damages owed them for violations committed after September 2014, and to permanently enjoin and restrain the defendants from any future FLSA violations.

The division also assessed $49,368 in civil money penalties against the employer because of the willful nature of the FLSA violations. The defendants are contesting the penalties in a separate proceeding before a department administrative law judge.

“Where employees are paid in violation of the Fair Labor Standards Act, they are entitled – as a general rule – not only to payment of back wages, but also to an equal, additional amount in liquidated damages,” said Michael Felsen, the department’s regional solicitor of labor for New England.  “This case sends a strong message that the department will use all tools at its disposal, including litigation, to ensure that workers receive every penny they have rightfully earned, to provide strong incentives for employers to comply with the law, and to level the playing field for responsible businesses.”

Zeus/Cape Ann violated the FLSA’s overtime and recordkeeping requirements when they:

• Paid the employees who cleaned, cut and packaged fish by the pound without regard to how many hours they had worked. This resulted in overtime violations when employees worked more than 40 hours in a workweek and employees were paid only their piece rates, with no overtime.
• Failed to make, keep and preserve adequate records of payrolls and work hours.
• Provided inaccurate payroll records to investigators.           

Zeus/Cape Ann used workers provided by local staffing agencies to perform the cleaning, cutting, and packaging tasks at its Gloucester plant. Despite the processing companies’ use of this outsourced labor, the division determined that Zeus/Cape Ann was the employer of the workers and bears responsibility as such under the FLSA.

 “These workers put in long, hard hours for this processor, and deserve to be paid the wages they’re legally due,” said Carlos Matos, the Wage and Hour Division’s Massachusetts district director.

The case was investigated by the division’s Boston District Office and is being litigated by attorneys James Glickman and Sheila Gholkar of the department’s Boston regional office of the solicitor.

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.

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/.

# # #

Perez v. Zeus Packing Inc., Cape Ann Seafood Exchange Inc. and Kristian Kristensen.
Civil Action Number:  1:16-cv-10442

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Employers: Elite Energy Efficiency

Sites: 669 Quinn Road #1, Pocatello, Idaho

Investigation findings: Investigators with the U.S. Department of Labor’s Wage and Hour Division found that Elite Energy Efficiency violated the Fair Labor Standards Act by misclassifying employees as independent contractors even though:

• Workers performed services integral to the business as insulation technicians. 
• The technicians had little opportunity for profit and loss. The employer simply them paid set piece rates.
• The workers had little investment in the business.
• The technicians’ skills lacked a specialty nature since other technicians trained them. 
• The work relationship was permanent.
• The employer controlled the manner in which employees performed the work.

The employer failed to pay employees for hours they regularly worked beyond 40 in a work week, and the employer failed to maintain records of hours of work. Overtime violations occurred as a result of the employer paying straight time for all hours worked. 

Resolution: Elite Energy will comply with the FLSA, correctly classify technicians as employees and will pay $41,000 in back wages to 44 employees.  

Quote: “Elite Energy Efficiency went to great lengths to avoid paying employees their rightful wages, instead claiming employees were independent contractors,” said Thomas Silva, director of the Portland District Office. “The U.S. Department of Labor is committed to changing this kind of behavior in the construction industry.  We will ensure that hard-working, vulnerable workers are paid correctly, and that contractors who abide by the law aren’t hurt competitively by those who violate it.”

Background: Elite Energy Efficiency is a home-energy efficiency contractor operating in Idaho, Colorado, Minnesota, Utah and Virginia.

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

Employer: Joined, Inc., an academic recruitment, technology and curriculum services provider

Sites: 2010 Main St., Suite 550 Irvine, California

Investigation findings: Investigators with the U.S. Department of Labor’s Wage and Hour Division found that Joined, Inc. missed paying wages to staff in several pay periods. The company blamed clients who failed to pay for services rendered and a slowdown in company business.

Resolution:     The employer will pay 58 employees $439,000 in back wages.

Quote: “Poor financial management by Joined, Inc. or any company should never translate into missed paychecks for workers,” said Rodolfo Cortez, director of the Wage and Hour Division Office in San Diego. “With this settlement, dozens of hardworking people can now catch up on bills and other living expenses.”

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

Participants: U.S. Department of Labor’s Wage and Hour Division
Oregon Bureau of Labor and Industries

Partnership description: The division and bureau signed a three-year Memorandum of Understanding intended to protect employees’ rights by preventing their misclassification as independent contractors or other non-employee statuses. The two agencies will provide clear, accurate and easy-to-access outreach to employers, employees, and other stakeholders; share resources and enhance enforcement by conducting coordinated investigations and sharing information consistent with applicable law.

Background: The division is working with the IRS and 28 other states to combat employee misclassification and to ensure that workers get the wages, benefits, and protections to which they are entitled.

***EXERCISE, EXERCISE, EXERCISE***

Mislabeling employees as independent contractors can deny them of basic rights such as minimum wage, overtime and a host of other benefits. Misclassification also reduces federal and state tax revenues, and prevents contributions to state unemployment insurance and workers’ compensation funds.

More information on misclassification and the effort are available at http://www.dol.gov/misclassification/.

Quotes: “The Wage and Hour Division continues to attack this problem head on with a combination of a robust education and outreach campaign and a nationwide, data-driven, strategic enforcement across industries. Our goal is always to strive toward workplaces with decreased misclassification, increased compliance, and more workers receiving a fair day’s pay for a fair day’s work.”

David Weil, U.S. Department of Labor Wage and Hour Division Administrator

Quote: “When corporations misclassify their workforce, they make it much more difficult for workers facing wage theft, civil rights abuse or other unfair treatment on the job. This agreement will create a new tool to help protect the rights of Oregon workers cheated on the job.”

Brad Avakian, Oregon Bureau of Labor and Industries Commissioner

LITTLE ROCK, Ark. – More than 40,000 hospital workers at Mercy Health System and affiliated locations around the nation are no longer required to have their health care providers answer a litany of unnecessary and illegal questions before requesting leave for their own serious health conditions or to care for a family member.

The resolution comes after an investigation at the Mercy Hospital Fort Smith facility conducted by the U.S. Department of Labor’s Wage and Hour Division found violations of the Family and Medical Leave Act in the process the organization had for employees requesting leave. The FMLA requires that employees provide enough information so their employer knows that their need for leave is due to an FMLA-qualifying condition before responding to a leave request. However, Mercy required that their employees’ medical certifications for leave include answers to intrusive and personal questions, well beyond the scope of what is allowed by law. For example, the forms provided by the hospital requested health information outside the scope of the illness related to the leave request and the name of the medication prescribed. The requirement to provide more information than is legally necessary or required can prevent workers who need and are qualified for FMLA leave from requesting such leave. 

“Employers should take care to request only information needed to designate leave correctly,” said Betty Campbell, the division’s Southwest regional administrator. “Employees’ health conditions and those of their family members are between them and their health care providers. Demanding answers to unnecessary and possibly illegal questions may stop workers from taking much needed medical leave or time to take care of a loved one. The Wage and Hour Division is committed to ensuring workers’ access to this important workplace protection.”

The division conducted investigations as part of an education and enforcement initiative focused on FMLA compliance in hospitals and clinics. Investigators found that Mercy was not the only large Arkansas medical industry employer in violation of the FMLA. Mercy and two other organizations, Washington Regional Medical Center and HealthSouth Rehabilitation Hospital in Fort Smith, in some instances failed to meet the notification requirements of the FMLA, which require that employers notify employees of their eligibility for protected leave within five business days of the first leave request. Violations were disclosed at all three organizations in instances where that timeframe was exceeded. At the same time employers provide an eligibility notice, they are also required to provide a written FMLA Notice of Eligibility and Rights and Responsibilities. At HealthSouth this information was provided orally, not in writing.

Investigators found enterprise-wide violations potentially affecting about 40,000 workers at Mercy Health, 2,177 at Washington Regional and 173 at HealthSouth.

For more than 20 years, the FMLA has been a major component in the department’s effort to promote work-family balance, providing workplace protections for those living with a serious health condition, or caring for a family member with a serious health condition. The act helps to ease the burden that can come with needing time away from work when faced with such an illness. 

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, 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/.

Editor’s Note: The initial release incorrectly identified one of the hospitals that had been investigated. It was the HealthSouth Rehabilitation Hospital in Fort Smith that was investigated.

Employer name: 929 Restaurant Corp., doing business as Clairmont Diner

Investigation site: 929 Yonkers Ave., Yonkers, New York

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found that the Clairmont Diner violated the minimum wage, overtime and recordkeeping requirements of the federal Fair Labor Standards Act. Investigators found the employer  

• Paid all employees a straight salary without regard to hours worked.  This resulted in minimum wage violations when the salary divided by the actual hours worked resulted in employees earning less than the current federal minimum wage of $7.25 per hour.
• Failed to pay overtime to employees, including wait staff, dishwashers and cooks, who worked 43-63 hours per week.
• Maintained incomplete and inaccurate payroll records, failed to record all employees on the payroll and failed to keep records of all hours worked and wages paid.

Resolution:  The restaurant has agreed to pay $101,467 in back wages plus an equal amount in liquidated damages totaling $202,934 to 28 employees. The employer will also install a time clock; put all employees on its payroll records; and record all hours worked by all employees and pay legally required minimum wage and overtime. Clairmont Diner will also pay the Labor Department $10,472 in civil money penalties.

Quote: “These Clairmont Diner employees work long hours and are entitled to all of their hard-earned wages. An employer who short-changes workers also gains an unfair advantage over those employers who obey the law” said Sonia Chasin Rybak, the Wage and Hour Division’s assistant district director in White Plains. “Unfortunately, the minimum wage, overtime pay and record-keeping violations that were found at this restaurant are all too common in the restaurant industry. The Wage and Hour Division will not hesitate to enforce the law – seeking remedies like back wages, liquidated damages and civil money penalties – to ensure that employers comply with the law.”

Information: The FLSA requires that covered, nonexempt workers be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus one and one-half times their regular wages for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records.

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

WASHINGTON – U.S. Department of Labor Secretary Thomas E. Perez issued the following statement on today’s ruling by the U.S. Supreme Court in Friedrichs v. California Teachers Association

“Today’s Supreme Court ruling is an important victory for public employees, for their right to have a voice at work, for their right to stand together and speak up for the things that matter to them, their families and their communities.

“The court’s 4-4 decision in Friedrichs v. California Teachers Association affirms longstanding precedent that, for decades, has enabled teachers, police officers, fire fighters, EMTs, social workers and others to come together and bargain collectively for better wages, benefits and working conditions.

“Unions have enabled public sector employees to secure a foothold in the middle class. But those public servants have faced a powerful headwind in recent years. Despite a robust economic recovery, government employment hasn’t rebounded as private sector jobs have.

“These are our friends and neighbors. They do tough and often thankless work – and they aren’t getting rich doing it. They do so much to give us stronger schools, safer streets and more vibrant communities. In return for their heroic efforts every day to support us, they should be able to support their own families.

“Today’s ruling will mean greater economic stability for millions of families. It’s a critical step toward creating shared prosperity and a balanced economy that works for everyone.”