MASSACHUSETTS COMPANIES TO PAY $2.4M IN OVERTIME, DAMAGES TO 478 WORKERS, MOST INTENTIONALLY MISCLASSIFIED AS INDEPENDENT CONTRACTORS

BOSTON – A Lunenburg construction company and a Framingham company it used to avoid its legal responsibilities as an employer have been ordered to pay a total of $2,359,685 in back wages and liquidated damages to 478 employees and take other corrective actions to prevent future violations of federal labor law. Under a consent judgment they will also pay $262,900 in civil money penalties due to the willful nature of their violations.

An investigation by the department’s Wage and Hour Division found that Force Corp., AB Construction Group Inc. and employers Juliano Fernandes and Anderson Dos Santos misclassified the bulk of their employees as independent contractors to avoid paying them overtime wages and other benefits to which they were entitled under the Fair Labor Standards Act. In addition, the defendants used a combination of payroll checks and cash/check payments to pay their employees straight time when overtime pay was required, and kept inadequate and inaccurate time and payroll records.

“American workers go to their jobs each and every day and work hard to help their employers turn a profit,” said U.S. Secretary of Labor Thomas E. Perez. “To be cheated out of wages and denied other workplace protections by an employer who deliberately flouts the rules compounds the struggles too many middle class Americans already face. Workers who play by the rules deserve nothing less than to be paid what they are owed.”

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Viking Village pool workers to get back pay

By Fatima Hussein | July 25, 2016

More than 20 pipefitters and bricklayers constructing the Viking Village Shared Facility Pool in Sharonville will recover a total of $147,000 in back wages and benefits following an investigation by the U.S. Department of Labor’s Wage and Hour Division.

Federal investigators found Kitchener, Ontario-based Gall Construction of America LTD, operating as Acapulco Pools, underpaid 21 workers up to $17 per hour in salary and benefits.

The company violated provisions of the Davis-Bacon and Related Acts, which cover areas of prevailing wage laws and the Contract Work Hours and Safety Standards Act, which govern wage rates for projects receiving federal funds, the labor department said.

In a news release, the department said it determined the company had classified the bricklayers and other workers as general laborers and failed to pay them prevailing wages, fringe benefits and overtime at the rate due for their job titles.

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Independent Contractor Misclassification: A Rising Tide

Joeseph E. Vaughan & Thomas R. Bond, The Legal Intelligencer
July 21, 2016

Editor’s note: This is the first in a two-part series.

The U.S. Department of Labor has recognized the misclassification of employees as independent contractors as one of the most serious problems facing affected workers, employers and the entire economy. This agency points out on their website that the employment relationship between workers and the businesses receiving the benefit of their labor has fissured apart as companies have contracted out, or otherwise shared activities to be performed by other businesses. This is accomplished according to this agency through the use of subcontractors, temporary agencies, labor brokers, and franchising, licensing, and third-party management. This sharing may lead to the misclassification of employees as independent contractors in a variety of ways, such as employers simply mislabeling certain employees as independent contractors to reduce payroll course.

The Department for Professional Employees, a part of the AFL-CIO, maintains that employer misclassification of employees as an independent contractor is a widespread phenomenon in the United States. They note that the Internal Revenue Service (IRS) estimates that employers have misclassified millions of workers nationally as independent contractors.

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