SALT LAKE CITY – A federal judge has upheld an assessment by the U.S. Department of Labor of $1,964,450 in civil money penalties against Paragon Contractors Corp. and its owner Brian Jessop.

The ruling by the department’s Office of Administrative Law Judges is the latest action in long-standing litigation by the department’s Office of the Solicitor against the employers, prompted by their lengthy history of child labor violations. The judge also held Paragon’s successor in interest, Par 2 Contractors LLC, liable for the penalty amount.

In 2012, investigators with the department’s Wage and Hour Division found Paragon, Jessop, the Fundamentalist Church of Jesus Christ of Latter Day Saints, and others had employed more than 200 children – including more than 100 under the age of 12 – to harvest pecans on a ranch in Utah during school hours, in violation of child labor provisions in the Fair Labor Standard Act. In past litigation, the department has successfully obtained contempt orders and back wages and other relief totaling more than $1 million.

“Working with the Wage Hour Division, the U.S. Department of Labor has sought to hold these employers accountable for their willingness to defy federal child labor laws,” said Solicitor of Labor Seema Nanda. “The department’s investigation found the employers removed minors from school, forced them to perform hard work in pecan orchards, and deprive them of their education. We will address exploitative child labor practices like these with the department’s full enforcement resources.” 

“Those who employ young workers must ensure the nature of their work, and the times at which they are employed, do not interfere with their education or put their safety in jeopardy,” said Acting Wage and Hour Administrator Jessica Looman. “Child labor laws exist to help young workers gain valuable and safe workplace experience. Our investigators work tirelessly to root out abuses by unscrupulous employers.”

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.

SAN DIEGO – Official merchandise for artists including the Rolling Stones, Britney Spears, Lady Gaga, Willie Nelson or Ariana Grande may have been made by workers at a San Diego silk-screening contractor who denied them the wages they earned for their work.

An investigation by the U.S. Department of Labor’s Wage and Hour Division has concluded that King Graphics in San Diego, a contractor for numerous entertainment merchandise manufacturers, shortchanged workers of wages by failing to pay overtime at time and one-half the required rate of pay for all hours worked over 40 in a workweek, a violation of the Fair Labor Standards Act. 

On Sept. 15, 2021, Wage and Hour investigators visited King Graphics and requested that the employer refrain from shipping “hot goods” made in violation of the FLSA. The employer agreed to withhold shipment of a truckload of Britney Spears’ T-shirts headed to Target stores and other items for sale at retailers such as Aeropostale, Footlocker, Hot Topic, Kohl’s, PacSun, Target and Urban Outfitters.

Under the FLSA’s “hot goods” provision, the department can seek a court order to prevent the interstate shipment of goods that were produced in violation of the minimum wage, overtime, or child labor provisions of the FLSA. The order can apply not only to the employer who produced the goods but to anyone in possession of the goods. King Graphics agreed to pay $10,473 to lift the hot goods hold.

After the division’s investigation was concluded, the U.S. District Court for the Southern District of California entered a consent judgment in April 2022 under which King Graphics agreed to pay $134,957 in overtime pay and an equal amount in liquidated damages, a total of $269,914 to the affected 76 workers. King Graphics will make this payment through a related class action lawsuit brought by the employees. King Graphics will also pay $10,473 in civil money penalties for these willful violations. The court also ordered the employer to hire an independent third-party to monitor future FLSA compliance.

“Celebrities, retailers and manufacturers profit from T-shirts sold for $40 or more, while the low-wage workers who produce the merchandise work overtime to meet consumer demand and become victims of wage theft,” said Acting Administrator of the Wage and Hour Division Jessica Looman. “The Wage and Hour Division will continue to hold employers accountable and use every available tool to ensure that workers are paid in compliance with the law.”

As a result of the King Graphics’ investigation, the division also investigated manufacturers who violated the FLSA by receiving and distributing the hot goods. These manufacturers include Solento Inc. in Encinitas, Bravado International Group in Hollywood, Civile Apparel LLC in San Diego and Artists Merchants and Lasso Gear in Los Angeles, California; Sony Music Entertainment in New York City and The Loyalist in Brooklyn, New York; Local Motion Inc. in Honolulu, Hawaii; and Captain Fin in Wilmington, North Carolina.

The manufacturers cooperated with investigators, submitted the requested records and provided assurances to the department that they will comply with FLSA, and perform due diligence to avoid future violations.

“A manufacturer or retailer must ensure their supply chain is free of ‘hot goods’ – products produced by workers whose legal rights have been violated – or risk legal liability,” added Looman. “All parties, from the entertainers to the distributers and wholesalers, should ensure their profits aren’t supported by workers in sweatshops, many of whom are immigrant women supporting families.”

For more than 20 years, King Graphics has operated a silk-screening and embroidery shop, finishing all types of garments and promotional items. The company claims to print about 30,000 items per day.

Counsel for Wage and Hour Boris Orlov of the department’s Office of the Solicitor in Los Angeles negotiated the joint resolution of this case and a private class action during mediation with King Graphics.

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.

CHARLESTON, SC – A Charleston restaurant shortchanged 92 workers by forcing them to participate in an illegal tip pool that included management and other typically non-tipped employees, which led to federal minimum wage and overtime violations, a U.S. Department of Labor investigation has revealed.

Investigators with the department’s Wage and Hour Division found that 167 Raw King Street LLC – operating as 167 Raw – required tipped employees to share tips illegally, which invalidated the employer’s claim to a tip credit. As a result, 167 Raw failed to pay tipped employees the difference between their direct wages and the federal minimum wage. In addition, the invalid tip pool resulted in the employer paying overtime rates to the tipped employees at less than the federal requirement when they exceeded 40 hours in a workweek.

The division recovered $624,017 in back wages for the affected workers.

In December 2021, the Bureau of Labor Statistics reported that 958,000 accommodation and food services workers left their positions. The need for restaurant food servers is expected to grow by 20 percent from 2020-2030 to about 2.4 million jobs, the bureau reports.

“Restaurant industry employers must know and comply with federal requirements to claim the tip credit. 167 Raw King Street LLC’s violations are common in the restaurant industry, and they can quickly add up to costly consequences,” said Wage and Hour Division District Director Jamie Benefiel in Columbia, South Carolina. “As food service industry employers struggle to find people to fill the jobs needed to remain competitive, they must take into account that retaining and recruiting workers is more difficult when employers fail to respect workers’ rights and pay them their full wages.”

Wage and Hour Division investigators recovered more than $34.7 million for more than 29,000 workers in the food service industry in fiscal year 2021.

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 – regardless of their immigration status – and the department can speak with callers in more than 200 languages.

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Employer: Angels on Earth PPEC Inc.

Investigation sites:  

12200 Menta St., Orlando 32837

110 Patterson Road, Haines City 33844

335 Pineda Court, Melbourne 32940

7405 U.S. Highway 98 North, Lakeland 33809

Investigation findings: U.S. Department of Labor Wage and Hour Division investigators found the employer failed to pay hourly, non-exempt workers time-and-one-half of their regular rate of pay for hours over 40 in a workweek, as required by law. The employer also failed to maintain a record of the employees’ total hours worked each workweek, both Fair Labor Standards Act violations.

Back Wages Recovered: The employer will pay $303,367 in back wages for 160 workers.                                               

Quote: “When employers fail to pay overtime in the care industry – a common violation – that creates a burden on these essential workers who have a special ability to care for children in need,” said Wage and Hour Division District Director Wildalí De Jesús in Orlando, Florida. “Workplaces in demanding career fields may struggle to find workers they need to succeed, particularly when employers deny full wages. Employees or employers who are unsure of their legal rights and responsibilities should contact the Wage Hour Division for guidance.”

Background: Angels on Earth PPEC Inc. offers prescribed pediatric extended care services for children with special needs. 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.

Learn more about Wage and Hour Division.

PROVIDENCE, RI – Four Ocean State medical facilities in Providence and West Greenwich, and their owner and operator, will pay $175,000 in back wages and liquidated damages to 103 employees to resolve violations of federal overtime requirements, after an investigation and litigation by the U.S. Department of Labor. The employer will also pay $50,000 in civil money penalties.

The resolution comes as a result of a lawsuit filed by the department in January 2019 against North Providence Primary Care Associates Inc., North Providence Urgent Care Inc., Center of New England Primary Care Inc., Center of New England Urgent Care Inc., Dr. Anthony Farina Jr. and Brenda DelSignore in the U.S. District Court for the District of Rhode Island.

The consent judgment incorporates the court’s May 6, 2021, decision and order granting in part and denying in part the secretary’s motion for partial summary judgment. In that decision and order on summary judgment the court concluded that the defendants violated the Fair Labor Standards Act by failing to properly compensate employees for overtime hours worked and not maintaining accurate records of the hours employees worked, including defendants automatically deducting 30 minutes per day for lunch even when employees had already punched out for lunch.

In addition to payment of the wages, damages and civil money penalties, the consent judgment and order permanently enjoins and restrains the practices and their owner and operator from future FLSA violations. View the consent judgment and order.

“Sadly, failing to pay overtime accurately is a common violation of the Fair Labor Standards Act. Health care workers that provide essential services to the public deserve to be paid the wages they have earned,” said Wage and Hour Division District Director Donald J. Epifano in Providence, Rhode Island. “The pandemic has led many essential workers – including people working in healthcare – to find employment that better suits their needs. Business owners and managers must understand that failures like these can hurt their organization’s ability to recruit and retain the workers they need.”

“The outcome of this litigation should serve as a reminder to workers and employers alike that the U.S. Department of Labor will take appropriate action, including litigation, on behalf of workers when their employers deny them the wages that the Fair Labor Standards Act requires,” said Regional Solicitor of Labor Maia Fisher in Boston.

In December 2021, the Bureau of Labor Statistics reported that 679,000 healthcare and social services workers left their positions. As the aging U.S. population grows and demand for health care services increases, employment in a variety of healthcare sectors is projected to grow 16 percent from 2020 to 2030. That’s faster than the average for all occupations, adding about 2.6 million new jobs. These trends indicate that industry employers will find it more difficult to recruit and retain without being highly competitive.

The division’s Providence Area Office conducted the initial investigation. The Boston Regional Office of the Solicitor litigated the case for the department.

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.

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.

CHICAGO – The U.S. Department of Labor has filed a complaint and has asked a federal court to issue a temporary restraining order against a Huntley restaurant and its owners for retaliating and intimidating workers illegally during an investigation by the department’s Wage and Hour Division.

Division investigators found that the employer – Papa G’s restaurant and owners Steve and Rick Tsakalios – told workers they did not have to speak with the investigators, questioned those who had about their discussions with investigators and created a chilling effect on worker cooperation.

Filed in U.S. District Court for the Northern District of Illinois, the action asks the court to prevent the restaurant and the owners from interfering with a federal investigation into the employers’ pay practices. The department is also seeking to have Papa G’s pay $59,904 in back wages, and an equal amount of liquidated damages to employees.

“Threatening or intimidating employees to prevent their cooperation with U.S. Department of Labor investigators is illegal,” stated Regional Solicitor of Labor Christine Heri in Chicago. “Doing so discourages workers from asserting their rights and interferes with effective enforcement of the Fair Labor Standards Act.”

“Our request for a temporary restraining order in this matter shows the department will do everything in its power to protect workers’ rights,” Heri added.

In addition to the intimidation and interference, investigators allege Papa G’s willfully violated the FLSA’s overtime and recordkeeping provisions by producing falsified records showing employees rarely worked more than 40 hours per week. Investigators later obtained a second set of records showing employees worked far more than 40 hours per week and that the employer paid the workers in cash at a straight-time rate for their overtime hours. A warrant served on the employer’s accountant – Alphameric Accounting of Lincolnwood – recovered additional records that confirmed this practice.

“As more workers choose to leave the food service industry, employers whose pay practices comply with the law have the advantage when it comes to attracting and retaining workers. Those employers who shortchange workers will likely find themselves without the people they need to operate their businesses,” said Wage and Hour Division District Director Thomas Gauza in Chicago.

The Bureau of Labor Statistics projects that 958,000 food and accommodation services workers left their positions in December 2021. BLS also projects about 41,400 openings for food service managers each year, on average, from 2020 to 2030.

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

Civil Action No. 3:22-cv-50141 Martin J. Walsh v. T.S.T.A., Inc., d/b/a Papa G’s and Rick and Tsakalios, and Steve Tsakalios

PHOENIX – Following a U.S. Department of Labor investigation that found a Phoenix-area landscaping company and its owner used illegal pay practices, lied to investigators and intimidated workers, a consent judgment has been entered in federal court to recover back wages and damages for employees and hold the employer accountable.

On April 28, 2022, the U.S. District Court for the District of Arizona ordered Artificial Grass Masters LLC of Peoria – operating as Artificial Grass Masters and Sun Screens for Less – and owner Joshua Apodoca to pay $92,500 in back wages and $92,500 in liquidated damages to 66 employees. The judgment also requires the landscaping company and Apodaca to pay $15,000 in penalties for the willful nature of their violations.

The action follows a February 2021 investigation by the Wage and Hour Division’s Phoenix District Office. The Regional Solicitor’s Office in San Francisco handled the matter on behalf of the Department.

“The Wage and Hour Division will not tolerate retaliatory action and intimidation against workers. Employees have a legal right to be paid their wages in full, to seek the wages they have earned and to assist investigators without fear of harm, threats or harassment,” said Wage and Hour Division District Director Eric Murray in Phoenix. “Retaliation is a priority for the division, and we will use every tool available to enforce the law, prevent wage theft and address employer intimidation.”

Investigators determined the employer paid workers in cash and off-the-books, denied overtime pay, lied to investigators, and intimidated workers. In addition to the back wages and damages, the consent judgment specifically prohibits Artificial Grass Masters LLC and Apodaca from doing any of the following because of employee’s assertion of their rights under the Fair Labor Standards Act:

• Discharging or threatening discharge, laying off, not providing work.
• Cutting employees’ work hours or wages.
• Intimidating, including intimidating by brandishing firearms or other weapons.
• Providing negative employment references or taking any steps to interfere with an employees’ application to work for another employer.

“Intimidating employees because they exercise their rights strikes at the heart of government enforcement efforts,” said Regional Solicitor of Labor Marc Pilotin in San Francisco. “The U.S. Department of Labor stands ready to protect employees from intimidation and retaliation, and it will hold employers accountable for attempting to silence their employees.”

Employers and workers can call the division confidentially with questions regardless of their immigration status. The department can speak with callers in more than 200 languages through the agency’s toll-free helpline at 866-4US-WAGE (487-9243).

Visit the agency’s website to 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.

Employer name:                    United Cerebral Palsy of Greater New Orleans Inc.

Investigation site:                  New Orleans, Louisiana

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found United Cerebral Palsy of Greater New Orleans Inc. failed to pay overtime to direct service workers, wrongly claimed that its workforce qualified for the FLSA’s companionship exemption, and that its payment structure included overtime premiums, in violation of the Fair Labor Standards Act. The investigation determined the employer owed the non-exempt employees an additional one-half their regular hourly rate of pay for overtime hours.

Back wages recovered:         $143,404 in owed overtime to 90 workers

Quote: “Home healthcare workers work long hours for low pay, and they deserve every dollar they earn,” said Wage and Hour District Director Troy Mouton in New Orleans. “This investigation of United Cerebral Palsy of Greater New Orleans Inc.’s pay practices highlights problems that remain too common in the home healthcare industry. The employer could have avoided this investigation with one phone call to the Wage and Hour Division. Instead, essential workers went without the wages they earned for far too long.”

Employer name:                    3Pointe Restaurant Group Holdings LLC

Investigation sites:               4507 W Walnut St., Rogers, AR 72756

                                                        1049 N Salem Road, Fayetteville, AR 72704

                                                        6800 W Sunset Ave., Springdale, AR 72762

                                                        3511 Highway 412 East, Siloam Springs, AR 72761

                                                        1185 Branson Hills Parkway, Branson, MO 65616

                                                        1915 W Marler Lane, Ozark, MO 65721

                                                        3757 S. Glenstone Ave., Springfield, MO 65804

                                                        2305 N Glenstone Ave., Springfield, MO 65803

                                                        615 W El Camino Alto St., Springfield, MO 65810

Findings: The U.S. Department of Labor’s Wage and Hour Division found 3Pointe Restaurant Group Holdings LLC – doing business as Freddy's Frozen Custard & Steakburgers – failed to pay non-exempt restaurant workers for all hours worked. The employer provided workers with a 15-minute break for every 6 hours of work and required employees to clock out for the breaks but did not pay for the break time. Under the Fair Labor Standards Act, rest periods of short duration, running from 5 minutes to about 20 minutes, are common in industry and must be counted as hours worked.

Back wages recovered:         $38,495 in owed overtime and $38,495 in liquidated damages to 213 workers

Quote: “Food service workers are some of the nation’s lowest paid workers. They depend upon every dollar earned to make ends meet and the law protects their rights to be paid for all the hours worked,” said Wage and Hour District Director Hanz Grünauer in Little Rock, Arkansas. “As businesses struggle to find the people they need to be successful, those who fail in their legal obligations to their workers may find it more difficult to retain and recruit workers in the future.”

CHICAGO ─ The U.S. Department of Labor is holding a series of listening sessions with employees and their stakeholders on possible revisions to the regulations that enforce the Fair Labor Standards Act’s minimum wage and overtime exemptions for executive, administrative and professional employees.

Since 1938, federal overtime regulations have been a cornerstone of the laws the department’s Wage and Hour Division enforces. These regulations protect workers and benefit workers and their families, their employers and the community at-large. The FLSA requires employers to pay most U.S. employees at least the federal minimum wage for all hours worked, and overtime pay at not less than time and one-half the regular rate of pay for hours worked over 40 in a workweek. 

 The law, however, provides an exemption from minimum wage and overtime pay for workers employed as “bona fide” executive, administrative or professional employees. In general, to be exempt, employees must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684 per week.

“Our goal is to use these sessions to listen, engage workers and hear their perspectives on the possible impact of changes to the regulations,” explained Acting Wage and Hour Division Administrator Jessica Looman. “As we consider the needs of today’s workforce and industry demands, we need public input to ensure that revisions to the overtime regulations fulfill the original intent and promise of the law.”

The division will hold a listening session for workers, employee stakeholders and union representatives in the Midwest as follows:

WHO:                         Employees, employee advocates and union representatives

WHEN:                      Wednesday, May 11, 2022, 6-7 p.m. CDT

WHERE:                    Register for the Midwest Workers Overtime Listening Session Registration