Wage and Hour Division (WHD)
Archived News Release — Caution: Information may be out of date.
Date: April 21, 2015
Contact: Ted Fitzgerald or Andre J. Bowser
Phone: 617-565-2075 617-565-2074
U.S. Department of Labor
Wage and Hour Division
Release Number: 15-0470-NEW
US Labor Department recovers more than $1.4M in back wages, damages for 300 employees of Long Island City plumbing and heating contractors
Danica Group LLC underpaid workers, misclassified some as independent contractors
NEW YORK -- The U.S. Department of Labor has obtained a settlement by consent judgment that provides for the recovery of $1.42 million in back wages and liquidated damages for more than 300 current and former employees of four Long Island City plumbing and heating contractors. The related businesses are Danica Group LLC; Copper Plumbing & Heating LLC; Copper II Plumbing & Heating LLC; Copper III Plumbing & Heating LLC, and the owners are Thomas Andreadakis, Leonidas Andreadakis and Helen Andreadakis.
Investigations by the department's Wage and Hour Division found that the contractors violated the overtime and recordkeeping requirements of the Fair Labor Standards Act. Specifically, they paid employees straight time wages rather than time and one-half when employees worked beyond 40 hours in a workweek, and issued separate paychecks for the overtime hours from a petty cash account.
Additionally, they misclassified at least 25 employees as independent contractors, paying them a weekly salary that did not compensate the employees at time and one-half when employees worked beyond 40 hours in a workweek. The defendants also frequently paid many employees late, sometimes requiring workers to wait several weeks to be paid. Finally, they maintained incomplete and inaccurate payroll records.
"Hundreds of workers were denied their lawful pay when they were not paid promptly and correctly or were misclassified as independent contractors," said Dr. David Weil, administrator for the Wage and Hour Division. "The misclassification of employees as independent contractors deprives workers of wages and benefits they are entitled to under the law, thereby hurting our economy. It also leads to unfair competition because businesses that play by the rules operate at a disadvantage to those that don't."
Under the terms of a consent judgment entered with the U.S. District Court for the Eastern District of New York, the defendants will pay the workers $710,000 in back wages covering the time period between September 2010 and April 2014, and an equal amount in liquidated damages. The judgment also includes enhanced compliance provisions that will commit the defendants to taking effective steps to improve their payroll recordkeeping, ensure that employees are paid on time each week, reclassify as employees those who were previously misclassified as independent contractors and properly pay them.
"Underpaying and misclassifying employees as independent contractors are illegal and unacceptable actions. The Labor Department will pursue all available legal measures to ensure that workers are properly classified and compensated for their work," said Jeffrey Rogoff, regional Solicitor of Labor in New York. "If the defendants fail to adhere to the terms of the judgment, they could be subject to contempt sanctions by the Court."
The case was investigated by the Wage and Hour Division's New York City District Office and litigated by the Department's regional Office of the Solicitor in New York City.
Under the FLSA, employers misclassify workers by failing to distinguish employees from bona fide independent contractors. An employee — as distinguished from a person who is engaged in a business of his or her own — is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business that he or she serves. For more information, visit http://www.dol.gov/whd/regs/compliance/whdfs13.htm.
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 rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records. The FLSA provides that employers who violate the law are liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees.
The case was investigated by the Wage and Hour Division's New York City District Office and litigated by attorneys Daniel Hennefeld, Lindsey Rothfeder and Orly Shoham of the department's Regional Office of the Solicitor in New York City.
For more information about the FLSA, call the Wage and Hour Division's New York City District Office in Manhattan at 212-264-8185 or its toll-free helpline at 866-4US-WAGE (487-9243). Information is also 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.