Heightened US Department of Labor enforcement effort finds 4 Utah soda, dessert shops employed 19 minors in violation of federal child labor laws

News Release

Heightened US Department of Labor enforcement effort finds 4 Utah soda, dessert shops employed 19 minors in violation of federal child labor laws

Sodalicious illegally allowed young teens to work more hours and times than permitted

SALT LAKE CITY – The operators of a growing chain of specialty beverage and dessert shops founded in Utah employed 19 young teens for more hours and times than federal law permits, a U.S. Department of Labor investigation has found.

The investigation came as part of a heightened education and enforcement effort by the department’s Wage and Hour Division as the agency reported more than 3,800 minors employed in violation of child labor laws in fiscal year 2022, an annual increase of 37 percent. The rise follows the addition of more young workers to the workforce during and after the pandemic.

The division determined that Sodalicious allowed 14- and 15-year-old employees to work past 7 p.m. when school was in session, after 9 p.m. during summer months, and more than 3 hours on a school day at four of its Utah locations in Midvale, Orem, Provo and South Jordan. By doing so, the employer violated the Fair Labor Standards Act’s provisions for employing youth in restaurants and quick-service establishments.

“Our investigators continue to see an increase in child labor violations, especially in the food service industry,” explained Wage and Hour Southwest Regional Administrator Betty Campbell. “Employers like Sodalicious are legally responsible for knowing and complying with federal child labor laws and making sure their employment practices do not jeopardize the safety of young workers or interfere with their education.”

The division assessed the employer with $13,946 in penalties to resolve the infractions.

Founded in 2013 by Annie and Kevin Auernig, Sodalicious owns and operates 25 locations offering custom-mixed sodas and desserts primarily in Utah, with five locations each in Arizona and Idaho.

Federal labor law prohibits the employment of workers under the age of 14 in non-agricultural settings. 14- and 15-year-olds must work outside of the hours of school and cannot work:

  • More than 3 hours on a school day, including Friday.
  • More than 18 hours per week when school is in session.
  • More than 8 hours per day when school is not in session.
  • More than 40 hours per week when school is not in session.
  • Before 7 a.m. or after 7 p.m. on any day, except from June 1 through Labor Day, when nighttime work hours are extended to 9 p.m.

In March 2022, the division’s Southwest Region issued a press release to remind Salt Lake City-area employers of the importance of complying with federal child labor laws, and its stepped up enforcement efforts. The news release highlighted two investigations with violations similar to those cited in the Sodalicious case.  

“We hope that employers in the region view this case as a reminder of the importance of abiding by child labor laws and the costly consequences related to violating the law,” Campbell added.

Learn more about the Wage and Hour Division.

Agency
Wage and Hour Division
Date
March 29, 2023
Release Number
23-600-DAL
Media Contact: Chauntra Rideaux
Media Contact: Juan Rodriguez
Share This

US Department of Labor finds Salt Lake City restaurant supply company illegally employed 22 minor-aged workers beyond hours allowed

News Release

US Department of Labor finds Salt Lake City restaurant supply company illegally employed 22 minor-aged workers beyond hours allowed

Specialty Consulting Services LLC assessed nearly $17K in penalties

SALT LAKE CITY – A federal investigation has found a Salt Lake City restaurant supply company allowed 22 employees – ages 14 and 15 – to work as many as 46 hours per workweek, and to begin work after midnight – both illegal practices under child labor laws. 

Investigators with the U.S. Department of Labor’s Wage and Hour Division found Specialty Consulting Services LLC – operating as Standard Restaurant Supply – violated child labor work hours standards of the Fair Labor Standards Act. The employer also failed to keep accurate time records including the date of birth for one minor-aged employee, in violation of the FLSA’s recordkeeping  provision.

The division assessed $16,595 in penalties to resolve the child labor violations.

The investigation follows a March 2022 announcement by the division’s Southwest Region reminding Salt Lake City-area employers of the importance of complying with federal child labor laws, and its stepped up enforcement efforts. 

“Minors as young as 14- and 15-years-old not only worked beyond permitted hours, but more than half of them were employed in violation of the Fair Labor Standards Act by being allowed to work long shifts often exceeding eight hours,” explained Wage and Hour Division District Director Kevin Hunt in Salt Lake City. “Our investigators continue to see an increase in child labor violations in several industries. We will take vigorous action whenever we discover young workers’ safety and well-being are being jeopardized by employers who fail to follow the law.”

Federal labor law prohibits the employment of workers under the age of 14 in non-agricultural settings. 14- and 15-year-olds must work outside of the hours of school and cannot work:

  • More than 3 hours on a school day, including Friday.
  • More than 18 hours per week when school is in session.
  • More than 8 hours per day when school is not in session.
  • More than 40 hours per week when school is not in session.
  • Before 7 a.m. or after 7 p.m. on any day, except from June 1 through Labor Day, when nighttime work hours are extended to 9 p.m.

“We urge employers in the region to gain a full understanding of child labor regulations and ensure they are abiding by the law, or they should be prepared to face costly consequences,” Hunt added.

Founded in 1980, Salt Lake City-based Specialty Consulting Services LLC has nine locations in Arizona, Colorado, Idaho, Nevada, New Mexico and Utah.

In 2022, the Wage and Hour Division found more than 3,800 minors employed in violation of child labor laws in the U.S., an increase of 37 percent over the previous year.

Learn more about the Fair Labor Standards Act’s child labor provisions.

For more information about young workers’ rights and other employee rights enforced by the division, contact the toll-free helpline at 866-4US-WAGE (487-9243). 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. The division protects workers regardless of where they are from and can communicate with workers in more than 200 languages. Download the agency’s Timesheet App, now available for Android devices, to ensure hours and pay are accurate.

Agency
Wage and Hour Division
Date
March 28, 2023
Release Number
23-52-DAL
Media Contact: Juan Rodriguez
Media Contact: Chauntra Rideaux
Share This

Court enters consent order requiring restaurants to pay $911K in back wages, damages to 99 underpaid workers in Massachusetts, New Hampshire

News Release

Court enters consent order requiring restaurants to pay $911K in back wages, damages to 99 underpaid workers in Massachusetts, New Hampshire

El Rodeo/Casa Tequila shortchanged employees on overtime, minimum wage payments

CONCORD, NH – A federal court has entered a consent order requiring the Concord-based owner and operator of three restaurants in New Hampshire and Massachusetts to pay $911,568 in back wages and liquidated damages to 99 employees after a U.S. Department of Labor investigation into their pay practices.

The department’s Wage and Hour Division found El Rodeo Mexican Restaurant in Concord and two Casa Tequila restaurants in Seabrook, New Hampshire, and in Salem, Massachusetts; and owner Gilberto Reyes violated the Fair Labor Standards Act’s minimum wage, overtime and recordkeeping requirements.

In its judgment, entered on March 23, 2023, the U.S. District Court for the District of New Hampshire requires the employers to pay the affected employees $455,784 in back wages and an equal amount in liquidated damages. They must also comply with federal minimum wage, overtime and recordkeeping requirements, and cooperate with the department’s investigations. The court also forbid them from threatening or retaliating against employees who cooperate with investigations or otherwise exercise or assert their FLSA rights.

“El Rodeo and Casa Tequila deprived nearly 100 workers of their rightful pay, making it that much harder for these workers to support themselves and provide for their families,” said Wage and Hour District Director Steven McKinney in Manchester, New Hampshire. “The more than $900,000 in wages and damages recovered following this investigation will go a long way towards making these workers whole after the losses they suffered.” 

Specifically, division investigators found the employers failed to do the following:

  • Pay certain employees for all hours worked and pay some employees at the federal minimum wage.
  • Pay certain nonexempt employees such as cooks, dishwashers and bussers, overtime at one-and-one-half times their regular rates of pay for hours over 40 hours in a workweek.
  • Combine employees’ hours for overtime purposes when they worked in more than one job category and/or in more than one of the restaurants in the same workweek.
  • Properly calculate tipped employees’ overtime rates based on their regular rates of pay, as opposed to their cash wage rates.
  • Maintain complete and accurate records of hours worked by and payments made to employees.

View the consent judgment and order and the complaint.

“The U.S. Department of Labor will use all available enforcement tools at its disposal to ensure workers like the ones in this case are afforded the protections required by the Fair Labor Standards Act,” said regional Solicitor of Labor Maia Fisher in Boston.

The FLSA requires that most employees in the U.S. be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the required rate of pay for all hours worked over 40 in a workweek.

“These types of wage violations – too often found in the restaurant industry – are preventable when employers access the available information and resources,” McKinney added. “We strongly encourage employers to reach out to the Wage and Hour Division to better understand their legal responsibilities. We also encourage workers who may have been victims of wage theft to contact our office to explore filing a complaint.”

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 immigration status. The department can speak with callers confidentially 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 i-OS and Android devices to ensure hours and pay are accurate.

Lea el comunicado en español.

Agency
Wage and Hour Division
Date
March 28, 2023
Release Number
23-405-BOS
Media Contact: Ted Fitzgerald
Media Contact: James C. Lally
Phone Number
Share This

US Department of Labor recovers $259K from South Carolina manufacturer who denied 939 workers legally earned overtime

News Release

US Department of Labor recovers $259K from South Carolina manufacturer who denied 939 workers legally earned overtime

Employers:    

Jadex Inc., 1303 S. Batesville Road, Greer, SC 29650

Alltrista Plastics LLC, 1303 S. Batesville Road, Greer, SC 29650     

 ArtaZn LLC, 2500 Old Stage Road, Tusculum, TN 37745

LifeMade Products LLC, 1303 S. Batesville Road, Greer, SC 29650

Shakespeare Co. LLC, 6111 Shakespeare Road, Columbia, SC 29223                                 

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found that Jadex Inc. and its four subsidiaries failed to include incentives, bonuses and premium pay into employees’ regular rates when calculating overtime rates for hours over 40 in a workweek.

Specifically, the employers did not include bonuses workers earned by reaching sales and safety goals per quarter, incentives awarded for working night shifts and for serving as trainers to other employees, additional hourly amounts for every hour worked during peak production seasons and bonuses for perfect attendance and personal safety performance during peak seasons. By omitting additional pay, the employers paid overtime at rates lower than required under the Fair Labor Standards Act.

Back wages recovered for workers:            $259,474 for 939 employees.                                   

Quote: “Employers must understand all applicable rules when it comes to paying workers overtime. This includes adding bonuses and incentive pay when factoring overtime pay. Anything less robs workers of their hard-earned wages,” said Wage and Hour Division District Director Jamie Benefiel in Columbia, South Carolina. “The Wage and Hour Division is able to provide resources to both employers and employees to help understand their responsibilities and rights under the law.”

Background: Jadex Inc. is a manufacturing holding company that employs approximately 1,800 employees at its headquarters and subsidiaries.  

Employers can contact the Wage and Hour Division at its toll-free number, 1-866-4-US-WAGE. Learn more about the Wage and Hour Division, including numerous online resources for employers, such as a fact sheet on overtime pay requirements of the FLSA. Workers can call the Wage and Hour Division confidentially with questions – regardless of their immigration status – and the department can speak with callers in more than 200 languages. Workers and employers alike can help ensure hours worked and pay are accurate by downloading the department’s Android Timesheet App for free.

Agency
Wage and Hour Division
Date
March 27, 2023
Release Number
23-559-ATL
Media Contact: Erika Ruthman
Media Contact: Eric R. Lucero
Phone Number
Share This

Department of Labor obtains consent order, US Virgin Islands supermarket chain must pay $240K in back wages, damages to 33 underpaid workers

News Release

Department of Labor obtains consent order, US Virgin Islands supermarket chain must pay $240K in back wages, damages to 33 underpaid workers

Pueblo Supermarkets must pay additional $10K in civil money penalties for willful violations

ST. THOMAS, VI – The U.S. Department of Labor has obtained a consent judgment that requires four U.S. Virgin Islands supermarkets, and their owner and former operations manager to pay 33 workers – including janitors, security guards and stock people – $240,000 in back wages and liquidated damages after an investigation by the department’s Wage and Hour Division found the employer denied them overtime wages.

Entered March 22, 2023, in the District Court of the Virgin Islands, the judgment orders World Fresh Market LLC – operating as Pueblo Supermarkets in St. Thomas and St. Croix – owner Ahmad Alkhatib and former operations manager Steven Bockino to pay the affected employees $120,000 in back wages and an equal amount in liquidated damages. The judgment also requires the employers to comply with federal minimum wage, overtime and recordkeeping requirements as well as not take any retaliatory action against any employee.

In 2010, the division found Pueblo Supermarkets’ pay practices violated the Fair Labor Standards Act. At the conclusion of the investigation, the employer agreed to correct its practices and abide by the law.

The division’s latest investigation identified violations of the FLSA’s overtime and recordkeeping requirements by Pueblo Supermarkets. Specifically, they found the employer:

  • Improperly characterized employees as “managers,” exempt from FLSA coverage, and paid them flat rates, without the required premium for overtime hours worked.
  • Failed to maintain required payroll records for multiple employees, including those improperly characterized as “managers.”
  • Permitted at least one employee to work off the clock, causing overtime violations.
  • Failed to keep accurate records of some employees’ work hours, hourly pay and overtime rates.

In addition to requiring payment of back wages and damages, the court enforced the department’s assessment of $10,000 in civil money penalties for the willful nature of Pueblo Supermarkets’ latest violations.

“When employers like Pueblo Supermarkets ignore the law, they deny workers the hard-earned wages they need to support their families. Employers who wrongly believe they can disregard the law ignore the reality that they will face significant consequences when their illegal actions are discovered,” said Wage and Hour Division District Director Jose Vazquez-Fernandez in Guaynabo, Puerto Rico. “Grocery industry workers are among the lowest paid in the Virgin Islands and across the U.S. The U.S. Department of Labor remains committed to making sure these valuable and vulnerable workers receive the wages they earn.”

View the consent judgment. View the complaint.

“The U.S. Department of Labor will use all available enforcement tools at its disposal, including litigation, when employers wrongly characterize employees as “managers” and fail to pay them overtime as required by the Fair Labor Standards Act,” said Regional Solicitor of Labor Jeffrey S. Rogoff in New York. “The resolution of this case shows grocers and other employers that not complying with federal wage law can lead to legal action with costly consequences.”

The division’s Caribbean District Office in Guaynabo, Puerto Rico, conducted the investigation. Senior Trial attorney David J. Rutenberg of the department’s Office of the Solicitor in New York litigated the case.

The FLSA requires that most employees in the U.S. be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the required rate of pay for all hours worked over 40 in a workweek.

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 confidentially 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 i-OS and Android devices – also available in Spanish - to ensure hours and pay are accurate.

Lea el comunicado en español

Agency
Wage and Hour Division
Date
March 27, 2023
Release Number
23-467-NEW
Media Contact: Ted Fitzgerald
Media Contact: James C. Lally
Phone Number
Share This

US Department of Labor finds Hidalgo County wrongly denied full bonuses to workers who used legally protected Family and Medical Leave

News Release

US Department of Labor finds Hidalgo County wrongly denied full bonuses to workers who used legally protected Family and Medical Leave

Recovers $30K in back wages for 31 Head Start Program workers

Employer name:                   Hidalgo County

Investigation site:                Hidalgo County Head Start Program

                                                       1901 W. State Hwy 107

                                                        Edinburg, TX 78504

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found Hidalgo County failed to pay full incentive bonuses to workers in its Head Start program due to the workers taking leave protected under the Family and Medical Leave Act. Investigators learned the county paid the affected workers a prorated bonus amount despite being eligible and meeting criteria for full bonuses. At the same time, the county awarded other employees – who used other types of leave – full incentive bonuses. By law, employers must pay bonuses that are consistent for employees with FMLA and non-FMLA absences.

Back wages recovered:         $30,241 in back wages to 31 workers                                                                                                              

Quote: “Our investigation found Hidalgo County failed to meet the Family and Medical Leave Act requirements by denying full benefits to employees who used legally protected leave. Federal law protects workers from having to choose between losing their income and protecting their health or that of a family member,” said Wage Hour District Director Cynthia Cantu-Flores in McAllen, Texas.

Agency
Wage and Hour Division
Date
March 23, 2023
Release Number
23-396-DAL
Media Contact: Chauntra Rideaux
Media Contact: Juan Rodriguez
Share This

US Department of Labor sues Kansas restaurants, owner to recover $771K in minimum wage and overtime back wages, damages for 75 employees

News Release

US Department of Labor sues Kansas restaurants, owner to recover $771K in minimum wage and overtime back wages, damages for 75 employees

Investigation finds employees worked up to 66 hours a week without overtime

KANSAS CITY, KS – The U.S. Department of Labor has filed suit against the owner of two Kansas restaurants who allegedly denied minimum and overtime wages to kitchen staff, servers, hosts and food runners after some worked as many as 66 hours per week.

Filed on March 15, 2023, in the U.S. District Court for the District of Kansas, the department’s complaint alleges El Toro Loco Legends LLC in Kansas City and El Toro Loco Lenexa LLC in Lenexa, and owner Alfonzo Herrera Hernandez, committed multiple violations of the federal minimum wage, overtime and recordkeeping requirements. The suit also names general manager Eugenio Yanez and location manager Yareli Perez.

The court filing comes after an investigation by the department’s Wage and Hour Division identified the violations of the Fair Labor Standards Act and ordered the employers to pay $771,794 ­– $385,897 in back wages and an equal amount in liquidated damages – to 75 employees of the restaurants to resolve its infractions.

Specifically, division investigators determined the employers paid servers a cash wage of $2.30 per hour and then either paid them for 80 hours a pay period regardless of the number of hours they worked or paid time and one-half their cash wage of $2.30 per hour for overtime. By law, employers must pay tipped workers time-and-one-half the minimum wage minus the tip credit.

The division also found the restaurants paid kitchen workers, hosts and food runners a fixed wage, regardless of how many hours they worked, and denied overtime to a manager who failed to meet exemption requirements.

“Overtime violations in the restaurant industry are far too common, particularly among vulnerable employees who don’t understand their rights to overtime compensation under federal law,” said Wage and Hour District Director Reed Trone in Kansas City, Missouri. “The Wage and Hour Division provides confidential advice, if needed, to workers and employers unsure of federal wage standards and compliance with the law.” ­

The investigation reviewed the employer’s payroll records from May 24, 2020, to May 22, 2022. The department filed its complaint after El Toro Loco Legends LLC, El Toro Loco Lenexa LLC and Hernandez refused to resolve the wage violations administratively. The department’s Regional Office of the Solicitor in Kansas City, Missouri is litigating the case.

The FLSA requires the payment of minimum wage and overtime at time and one-half a worker’s average hourly rate of pay, including bonuses. Learn about specific FLSA rules for the restaurant industry.

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.

Su v. El Toro Loco Legends LLC, El Toro Loco Lenexa LLC in Lenexa, Alfonzo Herrera Hernandez, Eugenio Yanez, Yareli Perez.

U.S. District Court for the Kansas

Case: 2:23-cv-2115

 

Agency
Wage and Hour Division
Date
March 23, 2023
Release Number
23-542-KAN
Media Contact: Scott Allen
Phone Number
Media Contact: Rhonda Burke
Phone Number
Share This

Federal court order aids Department of Labor recovery of $265K in back wages for 182 employees of Milford drywall contractor

News Brief

Federal court order aids Department of Labor recovery of $265K in back wages for 182 employees of Milford drywall contractor

Date of Action:          March 13, 2023

Type of Action:         Fair Labor Standards Act consent order and judgment

Company/Owners:    GEM Interiors Inc., Milford, Ohio

Background: On March 13, 2023, Judge Michael R. Barrett in the U.S. District Court for the Southern District of Ohio entered a consent order and judgment against the drywall contractor. Under terms of the settlement, the drywall contractor agreed to pay a total of $265,000 – representing $132,500 in back wages and an equal amount in liquidated damages ­– to 182 workers.

A U.S. Department of Labor Wage and Hour Division investigation found the Milford company denied its employees proper pay by devising the following schemes:

  • Dividing the overtime hours worked by one-third making it appear on payroll records as proper overtime pay while in reality paying straight time at an employees’ regular rate of pay for all hours worked.
  • Concealed the overtime straight time pay as ‘reimbursements’ pay.
  • Misclassified the workers as independent contractors, which denied them proper overtime compensation.

In response to the order, GEM will repay the wages in 36 monthly installments beginning April 1, 2023. The Milford company will also pay $42,000 in civil money penalties assessed by the department for violations of the Fair Labor Standards Act.

Resolution: Under terms of the consent order and judgment GEM also agreed:

  • Not to hire any individual as a purported independent contractor.
  • Hire only subcontractors whose businesses are registered in the state where work is being performed. 
  • Hire a third-party auditor to review company payroll and time records and those of its subcontractors to ensure FLSA compliance, and provide those reports to the Wage and Hour Division. 
  • Require subcontractors to sign affidavits attesting to their FLSA compliance. 
  • To allow the division to seize remaining assets in the company’s account receivable up to the amount of remaining payments due, if the employer defaults on its payments.
  • To comply fully with the FLSA now and in the future.

In 2017, the Secretary of Labor filed a lawsuit after the company did not resolve the matter administratively and assessed civil money penalties for violations. The division cited the company for violations in 2011. The department’s Office of the Solicitor in Cleveland litigated the case.

Quote: “The court’s order ends a long struggle to recover wages earned and owed to more than 150 workers from GEM Interiors Inc.,” said Wage and Hour District Director Matthew Utley in Columbus, Ohio. “This employer wrongly believed that they could ignore the rule of law that protects workers’ rights to be paid their full and legally earned wages. Our dogged effort will make these workers whole and hold the employer accountable for their past misjudgments and future actions.”

Docket Number: Case No. 1:17-cv-203

Agency
Wage and Hour Division
Date
March 23, 2023
Release Number
23-572-CHI
Media Contact: Scott Allen
Phone Number
Media Contact: Rhonda Burke
Phone Number
Share This

Pesos on the dollar: US Department of Labor recovers $465K in back wages, damages from Carlsbad manufacturer who underpaid Mexican workers

News Release

Pesos on the dollar: US Department of Labor recovers $465K in back wages, damages from Carlsbad manufacturer who underpaid Mexican workers

Providien Injection Molding Inc. paid 44 workers pesos at fraction of minimum wage

CARLSBAD, CA – A federal investigation has recovered $465,993 in back wages and liquidated damages for 44 employees of a California medical injection molding manufacturer who denied them their legally earned wages, including overtime, by incorrectly classifying many as trainees.

An investigation by the U.S. Department of Labor’s Wage and Hour Division determined Providien Injection Molding Inc. paid a flat weekly salary in Mexican pesos to technicians who traveled from the company’s Tijuana, Mexico, location to work at its Carlsbad facility.

Investigators found the employer paid technicians as little as $3.29 per hour, a violation of minimum wage provisions of the Fair Labor Standards Act. In addition, the division learned Providien violated federal overtime regulations by not paying overtime wages to technicians who worked an average of 45 hours each week. The employer also failed to maintain accurate time and payroll records as required.

The investigation also found Providien classified the technicians as trainees for the nearly 16 months they worked at the Carlsbad facility as the company prepared to relocate its manufacturing facility to Tijuana.

The division recovered $217,402 in overtime back wages for all 44 of the affected workers, and an additional $15,594 in minimum wages owed to 13 workers by the employer, plus $232,996 in liquidated damages for all 44 affected workers. The division also assessed Providien with a $25,935 civil money penalty for the willful nature of its violations.  

“This case reflects an alarming trend where employers send employees across the border to work in the U.S. and then deny them the rights and protections of all U.S. workers,” explained Wage and Hour Division District Director Min Park-Chung in San Diego. “If you work in California, or anywhere in the U.S., and your employer is paying you less than the federal minimum wage – regardless of the currency they use – contact the Wage and Hour Division.”

The division and the Consulate General of Mexico in San Diego are working together to ensure Mexican nationals in the region are aware of their labor rights as U.S. workers, including the right to report labor violations without fear of threats and intimidation. Consul General of Mexico Carlos González Gutierrez in San Diego encourages Mexican workers to contact the consulate at 619-231-3847 or at proteccion@consulmexsd.org for support, consular protection or free legal advice. 

A subsidiary of Carlisle Companies Inc. in Scottsdale, Arizona, Providien Injection Molding manufactures medical devices and components. In addition to Carlsbad, Providien has facilities in Sylmar and San Diego, and across the border in Tijuana.

The division enforces the law regardless of where a worker is from and can speak confidentially with callers in more than 200 languages. For more information about the FLSA and other laws enforced by the division, contact its toll-free helpline at 866-4US-WAGE (487-9243). 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 i-OS and Android devices, also available in Spanish, to ensure hours and pay are accurate.

Agency
Wage and Hour Division
Date
March 23, 2023
Release Number
23-547-SAN
Media Contact: Michael Petersen
Share This

Unfit wages: US Department of Labor survey finds widespread violations by Southern California garment industry contractors, manufacturers

News Release

Unfit wages: US Department of Labor survey finds widespread violations by Southern California garment industry contractors, manufacturers

Leading retailers, customers benefit as workers struggle with wage theft

LOS ANGELES – A survey of Southern California garment-sewing contractors and manufacturers by the U.S. Department of Labor has found workers making garments sold by many of the nation’s leading fashion retailers often continue to be victims of wage theft and employers’ illegal pay practices.

Based on data from more than 50 contractors and manufacturers, the 2022 Southern California Garment Survey released today by the department’s Wage and Hour Division found violations of the Fair Labor Standards Act in 80 percent of its investigations. More than 50 percent of the time, the division found employers illegally paying workers part or all their wages off the books, with payroll records either deliberately forged or not provided.

The fiscal year 2022 survey also found 32 percent of contractors paying garment workers piece-rate wages, a practice prohibited by the State of California on Jan. 1, 2022. Contractors and manufacturers included in the survey produce garments for sale by national retailers that include Bombshell Sportswear, Dillard’s, Lulus, Neiman Marcus, Nordstrom, Socialite, Stitch Fix and Von Maur.

In a particularly egregious case, division investigators learned a contractor paid garment workers as little as $1.58 per hour.

In FY 2022, investigations by the division’s Southern California district offices in Los Angeles, San Diego and West Covina led to the recovery of more than $892,000 in back wages and liquidated damages for 296 workers. The division also secured agreements with manufacturers to monitor contractors to ensure FLSA compliance.

“Despite our efforts to hold Southern California’s garment industry employers accountable, we continue to see people who make clothes sold by some of the nation’s leading retailers working in sweatshops,” said Wage and Hour Regional Administrator Ruben Rosalez in San Francisco. “Many people shopping for clothes in stores and online are likely unaware that the ‘Made in the USA’ merchandise they’re buying was, in fact, made by people earning far less than the U.S. law requires.”

As part of the survey, the division conducted time and pricing studies and found that sewing fees paid by manufacturers to contractors were – on average – not enough for the contractors to properly pay their workers’ required minimum wages. Specifically, the studies determined the average sewing fee was $2.75 below the amount needed per garment for sewing contractors to comply with federal wage standards. Contractors who paid employees in compliance with the law received a higher sewing fee, ranging from $17.50 to $35 per garment.

In conjunction with today’s release of the results of the 2022 Southern California Garment Survey, the department hosted a listening session in Los Angeles with garment workers and stakeholders, including the California Division of Labor Standards Enforcement, the California Division of Occupational Safety and Health, representatives from state and local attorneys general, and the non-profit Garment Worker Center and Bet Tzedek Legal Clinic.

“The findings of the Southern California Garment Survey highlight why greater outreach and stronger enforcement are needed to combat the inequities that exist in the garment and fashion industries,” Rosalez added. “The Wage and Hour Division will continue to work and meet with advocates and industry stakeholders, and remain focused on holding accountable the manufacturers and retailers who reap significant profits while the people who did the hard work are too often not paid their rightful wages.”

Read more about the division’s efforts in the garment industry. The division enforces the law regardless of a worker’s immigration status and can speak confidentially with callers in more than 200 languages. For more information about the FLSA and other laws enforced by the division, contact its toll-free helpline at 866-4US-WAGE (487-9243). 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 i-OS and Android devices – also available in Spanish - to ensure hours and pay are accurate.

Agency
Wage and Hour Division
Date
March 22, 2023
Release Number
23-531-NAT
Media Contact: Michael Petersen
Share This
Subscribe to Wages