Wage and Hour Division (WHD)
Archived News Release — Caution: Information may be out of date.
Date: May 3, 2012
Contact: Scott Allen or Rhonda Burke
Phone: (312) 353-6976
U.S. Department of Labor
Wage and Hour Division
Release Number: 12-800-CHI
US Labor Department obtains judgment against Illinois-based Skokie Maid; more than $500,000 in unpaid wages, damages to be paid to 75 misclassified workers
Company also assessed more than $70,000 in civil money penalties for FLSA violations
CHICAGO -- Judge James F. Holderman of the U.S. District Court for the Northern District of Illinois has issued a default judgment against Skokie Maid and Cleaning Services Ltd. in Skokie, for failing to answer a complaint filed by the U.S. Department of Labor seeking a total of $501,893.44 in back wages and liquidated damages for 75 workers. The lawsuit, which resulted from investigations conducted by the department's Wage and Hour Division, alleged violations of the Fair Labor Standards Act's minimum wage, overtime and record-keeping provisions.
"It is unacceptable for any employer not to pay workers their rightfully earned wages or to classify workers as independent contractors to circumvent wage laws," said Karen Chaikin, acting regional administrator for the Wage and Hour Division in the Midwest. "The Labor Department is committed to seeing that these workers are compensated in accordance with the law."
The suit alleged that the company, which operates as Skokie Maid misclassified 75 current and former cleaning employees as independent contractors and willfully failed to pay them for all hours worked. The employees also were not compensated with overtime pay for hours worked in excess of 40 per week, as required. Finally, the defendant failed to keep proper payroll records.
The judgment requires the defendant to pay $250,946.72 in back minimum wage and overtime compensation plus an equal amount in liquidated damages for the period of Nov. 16, 2008, to July 31, 2011. It also enjoins the company from future violations of the FLSA's record-keeping requirements.
The case was litigated by the department's regional solicitor in Chicago. Due to the willful nature of the minimum wage and overtime violations, the Wage and Hour Division has assessed civil money penalties of $70,125.
The misclassification of employees as independent contractors is an alarming trend, particularly in industries that often employ low-wage, vulnerable workers and in which the Wage and Hour Division historically has found significant wage violations. The practice is a serious threat both to employees entitled to good and safe jobs, as well as to employers that obey the law. Too often employees are deprived of overtime and minimum wages, and forced to pay taxes that their employers are legally obligated to pay. Honest employers have a difficult time competing against scofflaws. The Labor Department is committed to ensuring that employees receive the pay and benefits to which they are legally entitled, and to level the playing field for employers that play by the rules.
The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular hourly rates for hours worked beyond 40 per week. Additionally, the law requires employers to maintain accurate time and payroll records, and prohibits retaliation against employees who exercise their rights under the law.
For more information about the FLSA and other federal wage laws, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd.
U.S. Department of Labor releases are accessible on the Internet at www.dol.gov. The information in this news release will be made available in alternate format (large print, Braille, audio tape or disc) from the COAST office upon request. Please specify which news release when placing your request at (202) 693-7828 or TTY (202) 693-7755. The Labor Department is committed to providing America’s employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit www.dol.gov/compliance.