US Department of Labor recovers $47K in back wages, damages for 107 workers after restaurant failed to pay legal minimum wage, overtime

News Brief

US Department of Labor recovers $47K in back wages, damages for 107 workers after restaurant failed to pay legal minimum wage, overtime

Sharky’s Vintage Park LLC’s uniform charges put workers below minimum wage

Employer:                       Sharky’s Vintage Park LLC

                                             operating as Sharky’s American Grill & Sharky’s Waterfront Grill LLC

Investigation sites:    Corporate headquarters

                                              2605 W Lake Houston Parkway

                                              Kingwood, TX 77339                                

Investigation findings: Investigator with the U.S. Department of Labor’s Wage and Hour Division found minimum wage violations after Sharky’s deducted pay from 66 employees wages for uniforms which caused their pay rate to fall below minimum wage rates for all hours worked. Additionally, the employer failed to pay 81 workers the correct over time rate. The Fair Labor Standards Act requires all nonexempt employees to make at least the federal minimum wage of $7.25 per hour and time-and-a-half their regular rate of pay for hours over 40 a week.

Back Wages and Damages Recovered:       $23,479 in back wages

                                                                        $23,479 in liquidated damages                                               

Quote: “People employed by the restaurant industry often work long hours to support themselves and their families. They have the right to be paid all of their earned wages,” said Wage and Hour Division Acting District Director Nicole Sellers  in Houston. “Companies are obligated to pay employees their full legally earned wages and must understand their legal responsibilities. Trained Wage and Hour professionals are available to assist employers who are unsure of regulations to avoid compliance issues.”

Background: Employers can contact the Wage and Hour Division at its toll-free number, 1-866-4-US-WAGE. The division also offers numerous online resources for employers, such as a fact sheet on Fair Labor Standards Act wage laws overtime requirements. Workers who feel they may not be getting the wages they earned may contact a Wage and Hour Division representative in their state through a list and interactive online map on the agency’s website. Workers and employers alike can help ensure hours worked and pay are accurate by downloading the department’s Android Timesheet App for free.

Learn more about Wage and Hour Division.

Agency
Wage and Hour Division
Date
September 12, 2023
Release Number
23-1402-DAL
Media Contact: Juan Rodriguez
Media Contact: Chauntra Rideaux
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US Department of Labor announces proposed new rule to strengthen protections for temporary farm workers

News Release

US Department of Labor announces proposed new rule to strengthen protections for temporary farm workers

Proposed rule would enhance enforcement against employers who undermine labor standards

WASHINGTON – The U.S. Department of Labor today proposed a new rule that would strengthen protections for farm workers in the H-2A program and help prevent abuses that undermine wages and standards for all agricultural workers.

The proposed rule would add new protections for worker self-advocacy, better protect workers against retaliation, make foreign labor recruitment more transparent and enhance the department’s enforcement. This proposal builds on a final rule the department published in October 2022 that modernized key aspects of the H-2A program.

“Farm workers are vital to our farmers, our food supply and our communities,” said Acting Secretary Julie Su. “This proposed rule would strengthen protections for H-2A farm workers who are particularly vulnerable to labor abuses, empower them to advocate for fair treatment and ensure that their employment does not depress labor standards and undercut domestic farm workers. The administration is committed to protecting all workers, and this proposal would significantly advance that effort.”

The proposed rule includes:

  • Adding new protections for worker self-advocacy. The proposed rule would improve workers’ ability to advocate for better working conditions by expanding and clarifying existing anti-retaliation protections. The proposed rule would also expand workers’ rights to invite and accept guests – including labor organizations – to employer-provided housing. Additionally, for workers not protected by the National Labor Relations Act, the proposed rule would require employers to provide a list of workers to a requesting labor organization, permit workers to designate a representative to attend any meeting between a worker and the employer where the worker reasonably believes that the meeting may lead to discipline, and prohibits employers from holding captive audience meetings unless the employer provides certain information to ensure that such meetings are not coercive. The proposal would also create greater transparency for workers about their prospective employers’ stance on their right to organize freely and without interference by requiring employers seeking to hire H-2A workers to provide a certification to the Department of Labor that the employer will bargain in good faith over the terms of a proposed labor neutrality agreement with a requesting labor organization or will explain why they will not do so.
  • Clarifying when a termination is “for cause.” The proposed rule would clarify that an employer only terminates a worker “for cause” when the worker either fails to meet pre-specified productivity standards or fails to comply with employer policies after the employer applies a system of progressive discipline. The proposal would establish six conditions to terminate a worker for cause, including that the employee has been informed of, or reasonably should have known, the employer’s policy, rule or productivity standards. Clarifying the meaning of the term “for cause” in existing regulations is important because termination “for cause” generally strips affected workers of their right to be offered work hours of at least three-quarters of the contract period and right to outbound transportation. For U.S. workers, termination “for cause” also strips them of their right to be contacted for employment in the subsequent year.
  • Making foreign labor recruitment more transparent. In line with concerns expressed by workers’ rights and anti-trafficking organizations, the Government Accountability Office and the department’s Office of Inspector General, the department has found that increased transparency is necessary to help protect agricultural workers from predatory practices during the recruitment process. The proposed rule would require employers to provide a copy of all agreements with any agent or recruiter the employer engages in recruiting prospective H-2A workers to the department, regardless of whether the agent is in the U.S. or abroad. The proposed rule would also require employers to identify and disclose the name and location of anyone soliciting H-2A workers on their behalf.
  • Making wages more predictable. The proposed rule would make wages more predictable in the H-2A program by making new wage rates applicable immediately upon their publication in the Federal Register rather than weeks later. This will ensure that agriculture workers are paid the most up-to-date wages as soon as possible. The rule would also require employers who fail to provide adequate notice to workers of a delay in their start date to pay workers the applicable rate for each day that work is delayed for up to 14 days. The proposal would further require enhanced transparency for employers to communicate minimum productivity standards, applicable wage rates, overtime opportunities and delayed start dates to workers.
  • Improving workers’ access to safe transportation, including seat belts. Workers in the H-2A program often travel long distances to and from the worksite in crowded vans and buses, sometimes driven by workers who worked all day, raising grave concerns about transportation safety. The proposed rule would add a seat belt requirement to reduce these hazards. For vehicles that are required by the Department of Transportation to be manufactured with seat belts, the proposed rule would prohibit the use of any employer-provided vehicle to transport H-2A workers unless each occupant is wearing a seat belt before the vehicle is operated, except in specific circumstances.
  • Enhancing enforcement to improve program integrity. The proposed rule would increase the speed with which the debarment of any business that violates H-2A program rules becomes effective by streamlining deadlines for Office of Foreign Labor Certification integrity and Wage and Hour Division enforcement actions. The proposed rule would also make it easier for the workforce system to discontinue necessary recruitment services for employers who have failed to meet program requirements. Finally, the proposed rule would prohibit employers from holding or confiscating a worker’s passport, visa, or other immigration or government identification documents.

Upon publication in the Federal Register, the notice of proposed rulemaking will be open for public comment for 60 days. The department will consider all comments received before publishing a final rule.

Learn more about the proposed rule and instructions for submitting comments.

 

Agency
Employment and Training Administration
Date
September 12, 2023
Release Number
23-1996-NAT
Media Contact: Jake Andrejat
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Investigation recovers $693K in back wages, damages from Georgia contractor that schemed for years to deprive 110 workers on Hawaii projects of overtime

News Release

Investigation recovers $693K in back wages, damages from Georgia contractor that schemed for years to deprive 110 workers on Hawaii projects of overtime

S&A Industries Inc. assessed $40K in penalties for attempts to evade regulations

HONOLULU – The U.S. Department of Labor has recovered $693,100 in back wages and damages after its investigations determined a Georgia-based prime contractor schemed to deny payment of overtime wages to 110 construction workers from 12 states employed on several hotel renovation projects in Honolulu between 2019 and 2022.

Investigators with the department’s Wage and Hour Division found S&A Industries Inc. of Suwanee, Georgia paid the affected workers straight-time rates for all hours worked, and used a series of illegal payment arrangements to avoid paying overtime wages for hours over 40 in a workweek. The workers were employed by seven subcontractors to complete various renovation projects at Hilton and Marriott resorts.

The division determined S&A violated the Fair Labor Standards Act by failing to pay overtime for hours over 40 in workweek to people employed on its projects. The contractor used various pay schemes with their subcontractors that resulted in artificially lower wage rates being paid to workers.

In addition to recovering $346,550 in back wages and an equal amount in liquidated damages, the department assessed S&A Industries with $40,000 in civil money penalties for its repeated and willful FLSA violations. Wages and damages recovered range from $1,207 to $28,177 per worker.

“Our investigation found a blatant and prolonged effort by S&A Industries and their subcontractors to deprive 110 construction workers of their hard-earned overtime wages,” said Wage and Hour Division District Director Terence Trotter in Honolulu. “Employers can’t establish separate agreements with workers that don’t meet at least the legal standards for wage payments, especially regarding overtime pay for hours worked over 40 in a workweek.”

“Construction cost savings on resort renovation projects can't be taken out of the workers' pockets,” Trotter added. “Overtime earned should be overtime paid.”

The investigation included a review of pay practices by six Georgia subcontractors including ESL Remodeling Corp., Pure Painting Inc. in Lawrenceville; A&A Floors and Counters Hotel Services LLC and PJ Tile Marble LLC in Marietta; Gerb-One Industries LLC in Conyers; and Dynasty Industries Inc. in Stone Mountain. The seventh contractor is Merced Renovations LLC in Manvel, Texas.

Founded by company President Daoud Shakkour and Executive Vice President Ahmed Aboneaaj, S&A Industries Inc. is a prime construction contractor specializing in hotel and resort renovation. Its projects include properties in Arizona, California, Colorado, Florida, Georgia, Kentucky, Louisiana, Maryland, Massachusetts, Missouri and South Carolina.

In fiscal year 2022, the division recovered more than $32.9 million in back wages for 17,127 construction industry workers. The division completed more than 2,200 investigations in FY22 in the construction industry and by wages recovered, the industry ranks first among the low wage, high violation industries investigated by the division.  

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the division’s toll-free helpline confidentially at 866-4US-WAGE (487-9243). The department can speak with callers in more than 200 languages, regardless of where they are from.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Download the agency’s new Timesheet App for Android and iOS devices – free and now available in English and Spanish – to ensure hours and pay are accurate.

Agency
Wage and Hour Division
Date
September 8, 2023
Release Number
23-1655-SAN
Media Contact: Michael Petersen
Media Contact: Jose Carnevali
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Labor Department obtains judgment to recover $252K in back wages, damages from Norristown restaurant, owners for denying full pay to 21 workers

News Release

Labor Department obtains judgment to recover $252K in back wages, damages from Norristown restaurant, owners for denying full pay to 21 workers

Olympia Pizzeria also assessed $18K in penalties for willful overtime, child labor violations

NORRISTOWN, PA – A federal court in Pennsylvania has entered a consent judgment ordering a Norristown restaurant and its owners to pay $252,579 in back wages and liquidated damages to 21 employees, an action that follows a federal investigation that found the employers denied proper overtime pay intentionally.

The department’s Wage and Hour Division found College Pizza Inc., operating as Olympia Pizzeria, and owners Dimitrios Efthimiou and Stravos Efthimiou did not pay kitchen workers time and one-half for hours over 40 in a workweek.

Investigators discovered that the employers tried to conceal their violations by paying cash wages to two employees and by not recording their hours worked or amounts paid. They also paid other kitchen staff a portion of their hours on payroll and the remainder in cash, neither of which included required overtime pay, and paid four other kitchen staff straight-time rates for overtime hours.

The division also found Olympia Pizzeria lacked an accurate record of all employees’ hours worked and learned the restaurant violated the Fair Labor Standards Act’s child labor provisions by employing two children too young to work as delivery drivers.

“Olympia Pizzeria denied its workers their rightful wages by not paying them overtime as required by federal law. Unfortunately, this type of violation is common in the food service industry and deprives too many hard-working people of their full pay,” said Wage and Hour Division District Director James Cain in Philadelphia. “Employers have a legal obligation to properly pay their employees, as well as protect the young workers they employ.”

In addition to the back wages and damages, the judgment requires Olympia Pizzeria, Efthimiou and Efthimiou to pay $14,360 in civil money penalties for the willful overtime violations and $4,266 for the child labor violations.

“The U.S. Department of Labor is committed to using all available enforcement tools to ensure that workers are afforded the protections required by the Fair Labor Standards Act,” said Deputy Regional Solicitor of Labor Samantha Thomas in Philadelphia.

The YouthRules! initiative promotes positive and safe work experiences for teens by providing information about protections for young workers to youth, parents, employers and educators. Through this initiative, the U.S. Department of Labor and its partners promote developmental work experiences that help prepare young workers to enter the workforce. The Wage and Hour Division has also published Seven Child Labor Best Practices for Employers to help employers comply with the law.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Employers and workers can call the division confidentially with questions, regardless of where they are from. The department can speak with callers in more than 200 languages through the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Download the agency’s new Timesheet App for iOS and Android devices – free and now available in Spanish – to track hours and pay.

Agency
Wage and Hour Division
Date
September 8, 2023
Release Number
23-1819-PHI
Media Contact: Leni Fortson
Media Contact: Joanna Hawkins
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Judge orders Indianapolis dental practice, human resources manager to pay $22K in back wages, damages to employee after retaliation, termination

News Brief

Judge orders Indianapolis dental practice, human resources manager to pay $22K in back wages, damages to employee after retaliation, termination

Employers:    Urgent Dental Center Avon LLC

Actions:          Fair Labor Standards Act consent judgment and order

Courts:           U.S. District Court for the Southern District of Indiana, Indianapolis Division

Investigation findings: On Aug. 22, 2023, Judge Richard L. Young ordered Urgent Dental Center Avon LLC and a human resources manager to pay a terminated employee $12,160 in back wages and liquidated damages and an additional $10,000 in punitive damages.

The judgment resolves a complaint filed by the U.S. Department of Labor on April 25, 2023, after an investigation by the Wage and Hour Division found the Indianapolis company violated the FLSA when they retaliated against an employee who filed a complaint alleging wage violations.

Investigators found that after filing the complaint with the Wage and Hour Division, the employee received an increase in disciplinary write ups, management made negative comments about the employee to other employees, and wrongfully terminated the employee shortly after they filed a complaint with the Wage and Hour Division.  

Quote: “Workers have the right to file complaints without fear of retaliation. The judge found that Urgent Dental Center Avon LLC and a manager there violated an employee’s right to question the employer’s pay practices, and then retaliated against them illegally,” said Wage and Hour District Director Aaron Loomis in Indianapolis. “Every U.S. worker has right to be paid fully for the hours they work and to engage in protected activities.”

Background: Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division and how to file an online complaint. For confidential compliance assistance, employees and employers can call the agency’s toll-free helpline at 866-4US-WAGE (487-9243), regardless of where they are from.

Download the agency’s new Timesheet App for iOS and Android devices – also available in Spanish –to ensure hours and pay are accurate.

United States Department of Labor v. Urgent Dental Center Avon LLC

Case number 1:23-cv-704

 

 

Agency
Wage and Hour Division
Date
September 7, 2023
Release Number
23-955-CHI
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Department of Labor obtains judgment ordering New Orleans-area home care agency to pay $630K in back wages, damages to 80 employees denied overtime

News Release

Department of Labor obtains judgment ordering New Orleans-area home care agency to pay $630K in back wages, damages to 80 employees denied overtime

Finds Parishes Supportive Living misclassified employees as independent contractors

NEW ORLEANS – The U.S. Department of Labor has obtained a consent judgment requiring the operator of a New Orleans-area home healthcare agency to pay 80 workers a total of $630,000 in back wages and damages after the employer misclassified them as independent contractors.

Entered in the U.S. District Court in the Eastern District of Louisiana on June 12, 2023, the judgment against Parishes Supportive Living Inc. and owner Belinda Vining-Trepagnier follows an investigation by the department’s Wage and Hour Division that found the employers’ misclassification denied overtime pay and other benefits and protections to employees assigned to the agency’s locations in Metairie and Hammond in violation of the Fair Labor Standards Act.

The division’s review of the employer’s pay practices from December 2019 to December 2022 found Parishes Supportive Living willfully failed to pay overtime wages for hours over 40 in a workweek, as required by law.

“Companies will be held accountable for denying workers their earned wages by misclassifying them as independent contractors,” said Wage and Hour Division District Director Troy Mouton in New Orleans. “Care industry workers provide vital services, and they deserve every cent that the law requires.”

In addition to payment of back wages and damages, the employers must retain an independent third-party auditor to review the company’s payroll and pay practices for a three-year period and prepare status reports on the employer’s ongoing FLSA compliance.

Parishes Supportive Living Inc. provides workers who offer clients home care, meal preparation, light household cleaning, personal hygiene assistance, transportation, medication reminders and other related home care services.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Workers and employers can call the division confidentially with questions, regardless of where they are from. The department can speak with callers in more than 200 languages through the agency’s toll-free helpline at 866-4US-WAGE (487-9243).

Download the agency’s new Timesheet App for iOS and Android devices – free and now available in English and Spanish – to ensure hours and pay are accurate.

Agency
Wage and Hour Division
Date
September 7, 2023
Release Number
23-1444-DAL
Media Contact: Chauntra Rideaux
Media Contact: Juan Rodriguez
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Federal investigation, litigation recovers $419K in back wages, damages for 21 workers denied overtime by Philadelphia grocery wholesaler

News Release

Federal investigation, litigation recovers $419K in back wages, damages for 21 workers denied overtime by Philadelphia grocery wholesaler

Byun Brothers Sales withheld overtime, must pay $8,379 penalty for willful violations

PHILADELPHIA – A federal investigation of the pay practices of a Philadelphia wholesaler has led the U.S. Department of Labor to obtain a consent judgment in federal court, requiring the employers to pay $419,615 to 21 workers deliberately denied overtime wages.

On August 30, 2023, the U.S. District Court for the Eastern District of Pennsylvania in Philadelphia approved a consent judgment requiring Byun Brothers Sales Inc. and president Richard Byun to pay the back wages and damages by September 29, 2023. The action follows an investigation by the department’s Wage and Hour Division.

The division found the employers paid people employed as baggers and loaders a day rate and others employed as general laborers a day rate or salary. They also failed to pay the affected employees overtime for hours over 40 in a work week, violating the Fair Labor Standards Act. The employers also violated the FLSA by failing to keep accurate records of the hours worked and amounts paid to employees.

 “B&B Sales and its owner intentionally withheld overtime wages earned by 21 hard-working employees, in violation of federal law that protects their rights to be paid fully for their labor,” said Wage and Hour Division District Director James Cain in Philadelphia. “Wage theft harms employees and puts employers who comply with the law at a competitive disadvantage. The employers in this case have learned that the consequences for violating federal labor laws are serious and costly.”

The court ordered Byun Brothers Sales Inc., operating as B&B Sales, and Byun to pay $209,807 in back wages and an equal amount in liquidated damages. The employers must also pay the department $8,379 in civil money penalties for the willful nature of their violations.

 “The outcome of this investigation and the litigation that followed will provide meaningful financial relief to vulnerable workers who depend on their wages to make ends meet,” explained Deputy Regional Solicitor of Labor Samantha Thomas in Philadelphia. “The U.S. Department of Labor will use every tool available to make sure workers’ rights are protected and to enforce the law.”

The division’s Philadelphia District Office conducted the investigation. Senior Trial Attorney Andrea Luby with the department’s Office of the Solicitor in Philadelphia filed the complaint and secured the consent judgment.

Located in Philadelphia, B&B Sales wholesales food and other grocery items for small convenience stores in the region.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Workers can call the division confidentially with questions or concerns – regardless of where they are from – and the department can speak with callers in more than 200 languages. Help ensure hours worked and pay are accurate by downloading the department’s Android and iOS Timesheet App for free in English or Spanish.

Read this news release En Español.

Agency
Wage and Hour Division
Date
September 6, 2023
Release Number
23-1565-PHI
Media Contact: Joanna Hawkins
Media Contact: Leni Fortson
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Department of Labor announces proposal to restore, extend overtime protections for 3.6 million low-paid salaried workers

News Release

Department of Labor announces proposal to restore, extend overtime protections for 3.6 million low-paid salaried workers

Proposed rule would ensure that more workers receive extra pay for long hours

WASHINGTON – The U.S. Department of Labor today announced a notice of proposed rulemaking that would restore and extend overtime protections to 3.6 million salaried workers. The proposed rule would guarantee overtime pay for most salaried workers earning less than $1,059 per week, about $55,000 per year.

“For over 80 years, a cornerstone of workers’ rights in this country is the right to a 40-hour workweek, the promise that you get to go home after 40 hours or you get higher pay for each extra hour that you spend laboring away from your loved ones,” said Acting Secretary Julie Su. “I’ve heard from workers again and again about working long hours, for no extra pay, all while earning low salaries that don’t come anywhere close to compensating them for their sacrifices. Today, the Biden-Harris administration is proposing a rule that would help restore workers’ economic security by giving millions more salaried workers the right to overtime protections if they earn less than $55,000 a year. Workers deserve to continue to share in the economic prosperity of Bidenomics.” 

Today’s announcement follows months of extensive outreach to employers, workers, unions and other stakeholders, which included the department holding 27 listening sessions with more than 2,000 participants to inform the proposed rule.

“We are committed to ensuring that all workers are paid fairly for their hard work,” said Principal Deputy Wage and Hour Division Administrator Jessica Looman. “For too long, many low-paid salaried workers have been denied overtime pay, even though they often work long hours and perform much of the same work as their hourly counterparts. This proposed rule would ensure that more workers receive extra pay when they work long hours. Public input is essential as we consider the needs of today’s workforce and industry demands, and we encourage continued stakeholder input during the public comment period.”

The proposed rule would do the following:

  • Restore and extend overtime protections to low-paid salaried workers. Many low-paid salaried employees work side-by-side with hourly employees, doing the same tasks and often working over 40 hours a week. But because of outdated and out-of-sync rules, these low-paid salaried workers aren’t getting paid time-and-a-half for hours worked over 40 in a week. The department’s proposed salary level would help ensure that more of these low-paid salaried workers receive overtime protections traditionally provided by the department’s rules.
  • Give workers who are not exempt executive, administrative or professional employees valuable time back. By better identifying which employees are executive, administrative or professional employees who should be overtime exempt, the proposed rule will better ensure that those who are not exempt will gain more time with their families or receive additional compensation when working more than 40 hours a week.
  • Prevent a future erosion of overtime protections and ensure greater predictability. The rule proposes automatically updating the salary threshold every three years to reflect current earnings data.
  • Restore overtime protections for U.S. territories. From 2004 until 2019, the department’s regulations ensured that for U.S. territories where the federal minimum wage was applicable, so too was the overtime salary threshold. The department’s proposed rule would return to that practice and ensure that workers in the U.S. territories subject to the federal minimum wage have the same overtime protections as other U.S. workers.

Upon publication in the Federal Register, the notice of proposed rulemaking will be open for public comment for 60 days. The department will consider all comments received before publishing a final rule. Learn more about the proposed rule and instructions for submitting comments.

Agency
Wage and Hour Division
Date
August 30, 2023
Release Number
23-1934-NAT
Media Contact: Jake Andrejat
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Packager/distributor pays $277K to 50 workers after US Department of Labor uncovers H-2B temporary labor program violations in Cortland, New York

News Release

Packager/distributor pays $277K to 50 workers after US Department of Labor uncovers H-2B temporary labor program violations in Cortland, New York

Vee Pak LLC/Voyant Beauty debarred from program for 3 years, pays $20K in penalties after laying off 17 US workers, underpaying 33 temporary workers

ALBANY, NY – A federal investigation has found that a Cortland facility operated by an Illinois global packager and distributor of personal care products violated laws protecting domestic and temporary nonimmigrant workers and recovered more than $277,000 for 50 underpaid workers.

The investigation by the U.S. Department of Labor’s Wage and Hour Division determined Vee Pak LLC, doing business as Voyant Beauty, violated provisions of the federal H-2B worker program involving workers at its former Cortland location.

The federal H-2B program requires employers to meet certain requirements, including recruitment and displacement standards, to protect similarly employed U.S. workers. This includes a requirement to recruit U.S. workers and hire qualified U.S. workers who apply, as well as solicit former U.S. workers to return, before employing H-2B workers. Employment of H-2B workers must be for a limited specific period, such as a one-time occurrence, seasonal, peak load or intermittent need.

Division investigators found that the employer violated the H-2B program’s requirements between November 2021 and July 2022 when it did the following:

  • Fired 17 U.S. workers employed as packers so H-2B workers could take their place.
  • Did not advertise the availability of housing to U.S. workers, potentially discouraging them from applying for the jobs.
  • Failed to pay 33 H-2B workers for meals and lodging expenses incurred during their travel to the U.S.

To resolve its violations, Vee Pak has paid $276,012 to the 17 displaced U.S. workers and $1,303 to 33 undercompensated H-2B workers, for a total of $277,315, and also paid a total of $20,003 in civil money penalties to the U.S. Department of Labor. Vee Pak has also been debarred from the H-2B program for three years as a result of its violations.

“Employers must understand and abide by federal laws that prevent employers from displacing U.S. workers and ensure all workers, including temporary workers, are paid properly. Employers who willfully disregard their responsibilities face costly penalties and debarment,” said Wage and Hour Division District Director Jay I. Rosenblum in Albany, New York. “The U.S. Department of Labor offers employers extensive assistance to ensure that they understand their responsibilities.”

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Employers and workers can call the division confidentially with questions, regardless of where they are from. The department can speak with callers in more than 200 languages through the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Download the agency’s new Timesheet App for iOS and Android devices – free and now available in Spanish – to track hours and pay.

Agency
Wage and Hour Division
Date
August 29, 2023
Release Number
23-1808-NEW
Media Contact: James C. Lally
Phone Number
Media Contact: Ted Fitzgerald
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Federal court orders Huntley restaurant to pay $105K in back wages, damages to 8 employees after Department of Labor investigation, litigation

News Release

Federal court orders Huntley restaurant to pay $105K in back wages, damages to 8 employees after Department of Labor investigation, litigation

Papa G’s tried to intimidate workers, obstruct investigation

CHICAGO – A federal court has ordered the operators of a Huntley restaurant to pay eight employees more than $105,000 in back wages and damages, despite the employers’ attempt to interfere with a U.S. Department of Labor investigation that found they illegally denied the workers their earned overtime wages.

The action comes after the court issued a preliminary injunction in June 2022 to Papa G’s restaurant and its owners Steve and Rick Tsakalios to cease their attempts to obstruct an investigation by the department’s Wage and Hour Division. In the course of its review, the division learned the employers told workers they did not have to speak with investigators, questioned those who did and hindered workers’ cooperation. They also provided falsified payroll records to investigators.

Division investigators audited the employers’ payroll practices from Feb. 5, 2019 to Feb. 4, 2022, and determined they did not pay workers overtime for hours over 40 in a week; instead, they either paid the affected employees straight-time rates or “banked” the hours to cover employees’ time off requests for when they did not work 40 hours in a week.

After the employers provided falsified payroll records to the division that showed employees rarely worked overtime, investigators obtained a second set of records showing employees worked far more than 40 hours per week and that Papa G’s paid employees straight-time rates in cash for overtime hours. A warrant served on the employers’ accountant recovered additional records that confirmed this practice.

On Aug. 3, 2023, the department obtained a consent judgment in the U.S. District Court for the Northern District of Illinois requiring Papa G’s and its owners to do the following:

  • Pay $52,904 in back wages and an equal amount of liquidated damages to the affected employees.
  • Be forbidden permanently from preventing workers’ cooperation with a federal investigation.
  • Pay $5,992 in civil money penalties for their willful violations of the Fair Labor Standards Act.
  • Hire an independent accountant to audit payroll records for three years to ensure compliance.
  • Provide all employees with information about federal wage laws and their rights.

“A federal court has upheld the findings of our investigation that Papa G’s denied eight workers the overtime wages they earned legally and then obstructed a federal investigation,” said Wage and Hour Division District Director Tom Gauza in Chicago. “The court’s action will also lead to the recovery of more than $105,000 in back wages and damages for eight restaurant employees who worked long hours to put food on their own tables.”

The Huntley-based Papa G’s has offered breakfast, lunch and dinner to area customers for 25 years.

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the division’s toll-free helpline confidentially at 866-4US-WAGE (487-9243). Calls can be addressed in over 200 languages, regardless of where a caller is from.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Download the agency’s new Timesheet App for free on iOS and Android devices in English or Spanish to ensure hours and pay are accurate.

Julie A. Su v. T.S.T.A., Inc., d/b/a Papa G’s, Rick Tsakalios, and Steve Tsakalios

Civil Action No. 3:22-cv-50141

Agency
Wage and Hour Division
Date
August 29, 2023
Release Number
23-1752-CHI
Media Contact: Scott Allen
Phone Number
Media Contact: Rhonda Burke
Phone Number
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