ELMWOOD PARK, ILLINOIS, MASONRY COMPANY ORDERED TO PAY MORE THAN $104K IN BACK WAGES, DAMAGES TO 20 WORKERS MISCLASSIFIED AS INDEPENDENT CONTRACTORS

WHD News Release: 05/19/2016
Release Number: 16-0876-CHI

Type of Action: Fair Labor Standards Act consent judgment

Defendant(s): Expertize Masonry Inc., Pawel Walaszek

Investigation Findings: An investigation conducted by the department’s Wage and Hour Division found that Elmwood Park, Illinois-based Expertize Masonry Inc., and Walaszek violated the Fair Labor Standards Act’s minimum wage, overtime and recordkeeping provisions when they misclassified employees working as laborers, masonry workers, crew leaders and foreman on masonry jobs in the Chicago area as independent contractors.

Investigators found the misclassification resulted in workers receiving less than the legally required federal minimum wage, and led to the employer’s failure to pay the workers overtime when they worked more than 40 hours in a workweek. Additionally, the employer failed to maintain accurate time records as required by the FLSA.

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Enforcement Matters: Wage Violations, Workers and the Economy

by Secretary Tom Perez on December 4, 2014

If you work hard and play by the rules, then you should be able to earn enough to take care of yourself and your family – that’s a core American value. But for too many people, their hard work isn’t reflected in their paychecks. In many cases, workers aren’t being fully and properly paid for all the hours they put in on the job. The Labor Department recently commissioned a research study on minimum wage violations in two states that demonstrates exactly that. But we are committed to using our enforcement tools to ensure workers get the wages that are rightfully theirs.

Using U.S. Census and earnings data from New York and California, this new study shows that many workers are earning a de facto minimum wage below the legal floor. Unscrupulous employers push their workers into poverty when they fail to pay what the law requires.

In those states, roughly 3 to 6 percent of all workers covered by the Fair Labor Standards Act experience minimum wage violations – translating into a total of between $20 and $29 million in lost weekly income. That represents 40 percent or more of their total pay. Imagine if 40 cents out of every dollar you earned didn’t show up in your paycheck but in your employer’s pocket. For every hour of tough, on-your-feet work looking after children, cleaning homes, making hotel beds, preparing food in a restaurant or picking crops in a field, it’s possible you could be working 24 minutes for free. That’s just wrong.

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(USDOL Study)

Sacramento, California, Landscaper to Pay More than $185,000 in Back Wages and Damages to Employees

SACRAMENTO, Calif. — Sacramento-based Frank Carson Landscape & Maintenance Inc., doing business as Carson Landscape Industries, The Grove and TurfPro, has agreed to pay $185,270 in back wages and liquidated damages to 164 of their employees because of Fair Labor Standards Act overtime and record-keeping requirement violations. The agreement followed an investigation by the U.S. Department of Labor’s Wage and Hour Division.

Investigators from the division’s Sacramento District Office found that the company failed to pay time and one- half for hours worked beyond 40 hours in a workweek, as required by law. The company failed to maintain accurate records of hours employees worked before and after their scheduled shifts, and paid only for scheduled hours rather than actual hours worked.

“This investigation puts money back into the hands of workers denied their rightfully earned wages. This practice hurts not only workers and their families, but it gives companies that violate the law an unfair competitive advantage,” said Richard Newton, the division’s district director in Sacramento.

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US Labor Department investigations result in more than $415,000 in back wages for workers on Detroit Palmer Park Square HUD project

DETROIT — U.S. Department of Labor investigations have resulted in over $415,000 in back wages for more than 90 employees performing construction work on the federally funded Palmer Park Square affordable housing in Detroit. The investigations, conducted by the department’s Wage and Hour Division, were part of a multiyear strategic enforcement initiative aimed at combating widespread labor violations on federally funded construction projects in the Detroit area, such as affordable housing construction projects funded by the U.S. Department of Housing and Urban Development.

The investigations found that Malino Construction and several project subcontractors violated provisions of the Davis-Bacon and Related Acts, the Contract Work Hours and Safety Standards Act and the Fair Labor Standards Act. The companies failed to pay prevailing wages, fringe benefits and overtime to construction workers on the project, failed to keep accurate time and payroll records for employees, and provided falsified, certified payroll records to the government.

Due to the extent and willful nature of the violations, Detroit-based Malino Construction, the prime contractor on the project, has been debarred from bidding on federal contracts for up to three years

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More than $1.6M in Unpaid Overtime for 1,543 Workers in the Gulf Coast Recovered by US Labor Department

HOUMA, La. – B & D Contracting Inc., a labor recruiting and staffing agency that caters to oil field services and maritime fabrication facilities along the Gulf Coast, has agreed to pay $1,660,438 in back wages to 1,543 current and former employees. An investigation by the U.S. Department of Labor found that the company engaged in improper pay and record-keeping practices that resulted in employees being denied overtime compensation in violation of the Fair Labor Standards Act. The employees were assigned to client work sites throughout Louisiana, Mississippi and Alabama to work as welders, pipe fitters and shipfitters.

Investigators from the Wage and Hour Division’s New Orleans District Office found the company mischaracterized certain wages as per diem payments and impermissibly excluded these wages when calculating overtime premiums, denying employees earned overtime compensation.

“Temporary staffing agencies serve valuable and legitimate business needs in today’s economy,” said Dr. David Weil, administrator for the Wage and Hour Division, “But employers may not manipulate these arrangements and use evasive pay practices to avoid paying workers their rightful wages.”

“The labor violations we found in this case are not unique to B & D Contracting Inc.,” said Cynthia Watson, regional administrator for the division in the Southwest. “We are increasingly finding the use of per diem schemes as a means of decreasing overtime pay and tax obligations in the staffing and support services industry in this region. The resolution of this case demonstrates our continued focus on combating such labor violations in order to improve compliance in this industry.”

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California Truckers Will Be Paid $2.2 Million in Misclassification Case

Pacer Cartage, a California logistics company, is being ordered to pay more than $2.2 million in back pay to short-haul truck drivers it illegally misclassified as independent contractors, Think Progress reports. The California Labor Commissioner’s Division of Labor Standards Enforcement says that the company knew or should have known that the drivers were employees and not contractors and Pacer is required to pay restitution, attorney’s fees and interest.

Misclassification is a tactic corporations engage in to try to exempt themselves from having to comply with the Fair Labor Standards Act, minimum wage laws and other laws protecting workers. If employees are classified as private contractors instead of employees, they are excluded from coverage under many labor laws and can be paid less. The truckers, for instance, were not paid by Pacer for time spent doing things like waiting at a port to pick up a load or for reimbursement of job-related expenses.

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US Labor Department Recovers More Than $277,000 in Back Wages for 233 Janitorial Service Employees at New Orleans Convention Center

NEW ORLEANS — Empire Janitorial Sales and Services Inc. has paid $277,565 in overtime back wages to 233 current and former janitorial service workers employed by Acadian Payroll Services LLC after an investigation by the U.S. Department of Labor’s Wage and Hour Division found violations of the Fair Labor Standards Act’s overtime and record-keeping provisions.

The investigation, conducted by the division’s New Orleans District Office, found that employees were wrongfully classified as independent contractors and paid an hourly wage with no overtime wages of time and one-half their regular rate of pay for hours worked over 40 in a workweek. Additionally, Acadian Payroll Services did not establish a seven-day workweek and failed to maintain proper records of weekly hours worked by its employees.

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Presidential Memorandum — Updating and Modernizing Overtime Regulations

March 13, 2014

MEMORANDUM FOR THE SECRETARY OF LABOR

SUBJECT: Updating and Modernizing Overtime Regulations

The Fair Labor Standards Act (the “Act”), 29 U.S.C. 201 et seq., provides basic rights and wage protections for American workers, including Federal minimum wage and overtime requirements. Most workers covered under the Act must receive overtime pay of at least 1.5 times their regular pay rate for hours worked in excess of 40 hours per week.

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