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

                                  Consulate of Mexico in Little Rock

Agreement description: The Wage and Hour Division and the Consulate of Mexico have renewed an existing agreement to provide information, guidance and access to workers’ rights training to Spanish-speaking workers in Arkansas, Oklahoma and Tennessee.

Renewed on Sept. 2, 2022, during national Labor Rights Week, the three-year agreement seeks to reduce violations by locating and educating low-wage, at-risk workers about their rights and protections afforded by the Migrant and Seasonal Agricultural Worker Protection Act and the Fair Labor Standards Act, including the responsibilities of employers to pay legally required wages.

Background: The agreement is a cooperative relationship to provide training, education, outreach and to promote dialogue around laws and regulations the Wage and Hour Division enforces. Together, the agency and the consulate will coordinate opportunities to reach native Mexican workers in the three-state region with information on workplace rights and protections.

Quote: “Knowledge is an essential to a worker’s ability to understand their rights and seek assistance to ensure these rights are protected. By renewing our agreement with the Consulate of Mexico, we will continue to provide assistance to native Mexican workers and employers in the region,” said Wage and Hour Division District Director Hanz Grünauer in Little Rock, Arkansas. “The efforts outlined in this agreement demonstrate our commitment to migrant and Spanish-speaking workers.”

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Employer:                                   Stat Etc. Inc.

                                                         Operating as Queen City Home and Medical Staffing

Investigation site:                  530 E. Innes St.

                                                         Salisbury, NC 28144

Investigation findings: U.S. Department of Labor Wage and Hour Division investigators found the employer paid straight-time rates for all hours worked. By doing so, Stat Etc. Inc. – a home healthcare provider – failed to pay employees the extra half-time rate due for hours over 40 in workweek, a Fair Labor Standards Act violation. The employer also failed to maintain a record of the total premium pay for overtime hours.

Back Wages Recovered:       The division recovered $77,936 in back wages for 25 workers.                 

Quote: “Overtime violations in the healthcare industry are all-too-common. Shortchanging workers who provide essential care that people and their families depend upon places unfair burdens on workers and their families who count on every dollar to make ends meet,” said Wage and Hour Division District Director Richard Blaylock in Raleigh, North Carolina. “The Wage and Hour Division is determined to hold these employers legally accountable and recover workers’ hard-earned wages. We encourage other employers to view the outcome in this investigation as an opportunity to review their pay practices to avoid similar violations.”

Background: Stat Etc. Inc. provides personal healthcare services and employs registered nurses, certified nurses’ assistants and personal care assistants.  

The Wage and Hour Division provides multiple tools to help employers understand their responsibilities and offers confidential compliance assistance to anyone with questions about how to comply with the law. Workers can call the division confidentially with questions – regardless of their immigration status – 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 Timesheet App for free.

Learn more about the Wage and Hour Division.

Employer name:                    Omega Drywall Company Inc.                                        

Investigation site:                  3010 Eula Morgan Road

                                                         Katy, TX 77493

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found the employer, a  drywall business, misclassified employees as independent contractors and paid straight time, a day rate and a piece rate for all hours worked and failed to pay overtime for hours over 40 in a workweek, in violation of the Fair Labor Standards Act. The division also discovered the employer had limited records, was missing time records and failed to have a complete set of employee addresses, also FLSA violations.

Back wages recovered:         $55,039 in back wages to 55 workers                                            

Quote: “Omega Drywall exploited vulnerable workers – and harmed them and their families – for their own financial gain by misclassifying them as independent contractors and denying them overtime pay and other essential benefits,” said Wage Hour District Director Robin Mallett in Houston. “We will hold employers accountable to prevent them from taking advantage of workers and gaining an unfair competitive advantage over other employers.”

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PHILADELPHIA – The U.S. Department of Labor has obtained a consent judgment that will recover $9.3 million in back wages and liquidated damages for 1,756 employees of a Philadelphia healthcare staffing company that misclassified them and willfully denied their hard-earned overtime pay.

Obtained by the department’s Office of the Solicitor in Philadelphia on Sept. 26, 2022, the judgment in the U.S. District Court for the Eastern District of Pennsylvania requires U.S. Medical Staffing Inc. to pay $4,650,000, in back wages and an equal amount in liquidated damages, and a civil money penalty of $700,000, for the willful nature of its violations. The action follows a complaint the department filed on Sept. 2, 2022.

“This consent judgment makes clear to all healthcare industry employers that just like U.S. Medical Staffing, they will be held accountable when they fail to pay employees their legally earned wages,” said Solicitor of Labor Seema Nanda. “The U.S. Department of Labor is prepared to use every tool available, including litigation, to prevent employers from violating workers’ rights.”

The judgment follows an investigation by the department’s Wage and Hour Division that found – from at least Sept. 24, 2017, through at least May 22, 2022 – the employer willfully denied the affected employees their overtime pay. The division determined U.S. Medical Staffing paid the employees straight time for all hours worked and failed to pay time and one-half the required rate for hours over 40 in a workweek, in violation of the Fair Labor Standards Act. In addition, in some cases, investigators determined that the employer claimed falsely to be a registry through which the company’s clients solely employed the workers. In other cases, U.S. Medical Staffing misclassified employees as independent contractors.

U.S. Medical Staffing provides staff to various agencies, including schools and group homes for individuals with disabilities. The employees worked in numerous occupations, including direct support and intellectual disabilities professionals, residential aides, personal care assistants, home health aides and licensed practical nurses. 

Following the division’s investigation, the department’s Office of the Solicitor engaged in months of negotiation with U.S. Medical Staffing, after which the employer agreed to the complaint’s filing and a consent judgment.

“Too often we find workers denied wage protections, such as the right to overtime pay and other benefits, by employers who misclassify them as independent contractors,” said Wage and Hour Principal Deputy Administrator Jessica Looman. “The Wage and Hour Division will hold employers accountable when they misclassify employees to cut labor costs and gain an unfair advantage over the competition.”

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.

In fiscal year 2021, the division recovered $13.8 million in back wages for more than 17,000, workers in the healthcare industry, where low wages and high rates of violations are common. As the U.S. population ages and demand for home healthcare services increases, employment in a variety of healthcare sectors is projected to grow 16 percent from 2020 to 2030 – faster than the average for all occupations – adding about 2.6 million new jobs.  

“As employers struggle to find the people they need to operate their businesses, those who ignore workers’ rights to full wages and benefits are likely to struggle to retain and recruit workers,” added Looman. “Employers who abide by the law will certainly have a greater appeal than those who do not.”

U.S. Medical Staffing Inc. provides mental health, behavioral health and school staffing to clients throughout Pennsylvania in Berks, Bucks, Chester, Delaware, Lehigh, Montgomery, Northampton and Philadelphia counties.

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 Wage and Hour Division confidentially with questions or concerns – regardless of where you 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 Timesheet App for free.

DEARBORN, MI – Federal wage investigators have recovered $352,347, in back overtime wages for 653 workers of a Dearborn staffing agency that assigned them to manufacturing facilities and illegally classified them as independent contractors.

By doing so, the employer denied their workers overtime wages, a violation under the Fair Labor Standards Act.

Misclassified employees are also denied other benefits including unemployment insurance and worker’s compensation and are required to take on the employer’s tax burden.

The U.S. Department of Labor’s Wage and Hour Division found Leo Staffing & Management LLC – operating as LTL Staffing and Business Solutions – assigned most of the employees to work as machine operators, welders and forklift drivers at Challenge Manufacturing locations in Walker, Holland and Pontiac. While the employees worked directly at the manufacturing plants, LTL Staffing maintained all employee records and processed their paperwork and payroll.

“When there is an employment relationship between a worker and an employer, these workers are covered under the Fair Labor Standards Act. This means employees must be paid the minimum wage and overtime as required by the FLSA,” explained Acting Wage and Hour District Director Angela Telang in Detroit. “Failing to recognize workers as employees strips them of a wide range of valuable benefits and labor protections.”

“Misclassification of employees as independent contractors is a major concern for the U.S. Department of Labor, and violations associated with misclassification are found all too frequently by Wage and Hour Division investigators,” Telang added. “We can assist employers and workers in determining if a worker should be classified as an independent contractor or as an employee.”

Learn how to determine if a worker is an employee or independent contractor.  

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. Workers and employers can contact the division’s toll-free helpline for assistant at 866-4US-WAGE (487-9243), regardless of where they are from.

Download the agency’s new Timesheet App for android and iOS devices to ensure hours and pay are accurate.

Employer name:                    First Choice Interiors LLC

Investigation site:                 11430 Bissonnet Street, Suite E1

                                                       Houston, TX 77099

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found First Choice Interiors LLC failed to pay the overtime premium to 39 workers by only paying straight time for all hours worked, in violation of the Fair Labor Standards Act. Investigators also found the employer in violation of the record keeping provisions of the act by failing to maintain complete time records for non-exempt employees.

Back wages recovered:         $22,492 in overtime back wages to 39 workers                                                                                         

Quote: “The U.S. Department of Labor is committed to ensuring that every employee receives the wages they have rightfully earned and that employers in all industries comply with the law,” said Wage and Hour Division District Director Robin Mallett in Houston. “Employers cannot misclassify employees as independent contractors to evade federal labor laws. We encourage all employers to review their pay practices and take advantage of the many tools we offer to assist them in understanding the law and avoiding costly penalties and damages for labor violations.”

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Employer name:           OKC Metro Alliance

                                               operating as Men’s and Women’s Firstep Residential Recovery Program

Investigation site:        1940 Linwood Blvd.

                                               Oklahoma City, OK 73106

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found violations of the Fair Labor Standards Act’s minimum wage and overtime provisions when OKC Metro Alliance placed recovery center residents within their Firstep Programs – a long-term residential drug and alcohol recovery program – in third-party employment and withheld wages – essentially acting as a joint employer. The employer agreed to change its business model to avoid future violations and paid back wages after entering into a compliance and settlement agreement with the department.

Back wages recovered: $100,000 to 491 employees

Quote: “We worked closely with OKC Metro Alliance to help them develop a business model that complies with the law. Similar recovery centers need to pay attention to this case and make sure they comply with labor laws or call us for assistance,” said Wage and Hour Division District Director Michael Speer in Oklahoma City. “Our website has an abundance of information about the many laws covered by the Wage and Hour Division. We encourage employers and workers to call us with any questions or complaints.”

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Employer name:        Blue Agave & Brothers

                                     Blue Apache Mexican Restaurant

Investigation site:      905 Savoy Road

                                    Youngsville, LA 70592

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found the employer, Blue Agave & Brothers LLC, denied minimum wage to 38 employees at Blue Apache Mexican Restaurant by diverting tips to one of the owners creating an improper deduction to the servers’ wages and invalidating the employer’s tip credit claim. Blue Apache Mexican Restaurant also paid time and one-half the cash wage rate instead of the full minimum wage for overtime hours, which resulted in employees receiving less than the full half-time premium due for overtime hours worked. Both actions are violations of the Fair Labor Standards Act.

Back wages recovered:         $70,602 in back wages                                                

Quote: “The Wage and Hour Division continues to find and correct violations that are all-too-common for the restaurant industry’s low-wage workers,” said Wage and Hour District Director Troy Mouton in New Orleans. “Many restaurant workers depend on customers’ tips to make ends meet. When their employer deprives them of their hard-earned money, making ends meet becomes even more difficult.

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AUSTIN, TX – The U.S. Department of Labor has recovered $230,353 in back wages for 274 workers employed by a popular central Texas barbecue restaurant operator after an investigation found the employer gave a portion of employee tips to restaurant managers – a practice not allowed by federal law.

Investigators with the department’s Wage and Hour Division found Black’s Barbecue Inc.; Kent Black’s Lockhart Barbecue Inc. and New Braunfels Barbecue LLC – all with the same ownership and operating as Black’s Barbecue restaurant – kept a portion of the employees’ tips and shared them with managers illegally. The Fair Labor Standards Act prohibits employers, managers and supervisors from keeping tips the business’ employees receive for any purposes, whether or not the employer takes a tip credit.

“Food service industry employers must know that tips are the property of tipped employees who earn them, plain and simple,” said Wage and Hour Division District Director Nicole Sellers in Austin, Texas. “Workers and their families depend on their rightfully earned wages and benefits. If you take from them, you take from their families. The Wage and Hour Division is committed to safeguarding the rights of all essential food service workers.”

Black’s Barbecue Inc. and Kent Black’s Lockhart Barbecue Inc. has operated for three generations in Texas. In addition to Lockhart, the employer has locations in Austin, New Braunfels and San Marcos.

In fiscal year 2021, the division identified nearly $35 million in back wages owed to more than 29,000 food service industry workers. In its food service investigations, the division commonly finds violations related to employers retaining tips, failing to pay overtime when required and not paying for pre- and post-shift work.

The Bureau of Labor Statistics projects employment in food preparation and service occupations will grow 20 percent from 2020 to 2030, much faster than the average for all occupations, and gain about 2.3 million jobs. These occupations are among the nation’s lowest paid groups. Employers who ensure their workers are paid their rightful wages and benefits will be best positioned to retain and recruit skilled workers.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages. Workers can call the Wage and Hour Division regardless of immigration status, it is free, confidential and the department can speak with callers in more than 200 languages.

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

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LANSDOWNE, PA – A federal court has ordered a Lansdowne, Pennsylvania, diner, and its owner and a manager to pay more than $1.35 million in back wages and liquidated damages to 107 servers and kitchen workers after a five-day trial confirmed the business operators used an illegal tip pool.

On Aug. 18, 2022, Judge Eduardo C. Robreno in the U.S. District Court for the Eastern District of Pennsylvania found Musluoglu Inc., which operates as Empire Diner; owner Ihsan Gunaydin; and manager Engin Gunaydin liable for $675,626.67 in back wages and an equal amount in damages owed to the affected current and former employees.

The action follows an investigation by the U.S. Department of Labor’s Wage and Hour Division in Philadelphia that determined the employer failed to comply with the tip credit requirements, specifically using servers’ tips to pay bussers’ wages. The division also found the employer violated minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act.

The department’s Office of the Solicitor in Philadelphia then filed a lawsuit in the U.S. District Court for the Eastern District of Pennsylvania against the restaurant and the Gunaydins to recover the back wages and liquidated damages owed. In its ruling, the court found the employer willfully violated the FLSA when it failed to comply with the tip credit requirements and misused the servers’ tips to pay wages. Before that ruling, the court had granted, in part, the Office of the Solicitor’s 2021 motion for summary judgment, and found the employer had violated federal wage and recordkeeping provisions. Specifically, the court agreed the restaurant and the Gunaydins were not entitled to claim employee tips as a credit towards their minimum wage obligation. 

“Tipped workers in the food services industry rely on their hard-earned tips to make ends meet. By diverting a portion of these tips, restaurant employers violate federal labor laws and harm workers and their families,” said Principal Deputy Wage and Hour Administrator Jessica Looman. “This significant and successful litigation demonstrates the Department of Labor’s commitment to protect the nation’s essential workers.”

The latest ruling comes after months of litigation and a bench trial, during which the department’s attorneys established that the employer violated federal law when they did the following:

• Required servers to turn over 10 to 15 percent of their total tips received on any given shift to pay the bussers’ wages.
• Interfered with the investigation by telling employees to lie about the business’ unlawful pay practices.
• Paid straight time to certain kitchen employees for all hours worked, including hours over 40 in a work week.
• Used an improper practice of paying servers time and one-half of their cash wage of $2.83 per hour for hours over 40 in a work week.

In addition to the back wages and liquidated damages, the employer was assessed a $47,620 civil money penalty due to the willful nature of the violations.

“This legal action recovers the workers’ hard-earned wages and sends a strong message to other restaurant employers that violations come at a high cost,​” said Solicitor of Labor Seema Nanda. “The U.S. Department of Labor is prepared to use every tool available, including litigation, to prevent employers from depriving workers of their wages.”

The Bureau of Labor Statistics projects that 918,000 food and accommodation services workers left their positions in June 2022. BLS also projects about 41,400 openings for food service managers each year, on average, from 2020 to 2030.

“Retaining and recruiting workers becomes much more difficult in today’s changing job market where workers have choices about where and for whom they work,” Looman explained. “Employers who take advantage of workers by violating their legal rights will find it increasingly difficult to recruit and retain the people they need to fill jobs and stay in business.” 

For more information about the FLSA and other laws enforced by the division, contact the agency’s 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 can communicate with workers in more than 200 languages. Download the agency’s new Timesheet App, now available for android devices, to ensure hours and pay are accurate.