Professional Service Agreement

DOL Recovers $796K in Back Wages and Benefits for Federal Wage and Hour Law Violations

January 13, 2021

The Wage and Hour Division (WHD) of the U.S. Department of Labor has announced several settlements with employers that reportedly violated the Fair Labor Standards Act (FLSA), the Service Contract Act (SCA), the Contract Work Hours and Safety Standards Act (CWHSSA), and the Davis-Bacon and Related Acts (DBRA), recovering $796,422 in back wages and benefits for 336 employees. One employer was assessed $27,150 in civil money penalties for FLSA child labor violations; another was fined civil penalties of $18,291 due to the repeat nature of the violations.

City failed to pay OT to firefighters.The City of Tipton, Indiana,paid$91,924 in back wages to 15 firefighters to resolve FLSA violations found when it failed to pay overtime to firefighters who worked more than 106 hours in their two-week pay period. An exemption permits employers to pay fire protection or law enforcement employees overtime on a "work period" basis, instead of a standard seven-day workweek, with a work period ranging from seven to 28 consecutive days. Fire protection personnel are due overtime after 106 hours worked during a 14-day work period. Here, the city failed to pay overtime when firefighters worked more than 106 hours.

Straight time plus only $1 for OT.Chelsea Health Care LLCpaid$81,399 in back wages to 45 employees for violating FLSA overtime requirements at its Columbus, Ohio, nursing home facility when it paid licensed practical nurses and health aides straight time plus an additional $1 for each hour they worked beyond 40 in a workweek, instead of the required time-and-one-half the normal rate of pay for overtime. The employer’s payroll company purportedly advised them to implement this unlawful pay method as a cost-saving measure.

Unpaid minimum wage and OT for servers, no OT for kitchen workers.Los Tequila Inc., operating Los Tres Caminos restaurant in Evansville, Indiana,has agreed to pay$317,108 in minimum wage and overtime back wages to 21 employees for FLSA violations that occurred when it paid servers for only up to 40 hours per week, failing to pay them any wages at all for any hours they worked beyond that point. Servers typically worked more than 40 hours per week every workweek. More violations occurred when the employer paid kitchen workers flat weekly salaries no matter the number of hours they worked, which resulted in violations when these employees worked more than 40 hours in a workweek but the employer failed to pay them overtime.

In addition to the back wages, the employer paid $18,291 in civil money penalties due to the repeat nature of the violations. A 2008 investigation of the Los Tres Caminos Inc., operating as Los Tres Caminos Mexican Restaurant in Peru, Indiana, found violations identical to those in the current case. The owner of Los Tres Caminos in Evansville is the owner of the Peru restaurant and has ownership interest in eight additional Mexican-cuisine restaurants in Indiana and Illinois.

Misapplied OT exemption, only flat rates for production workers.Travel Lite Inc.will pay$103,318 in overtime back wages to 168 employees for FLSA overtime violations found at its two recreational vehicle production facilities in Syracuse and New Paris, Indiana, when the company misapplied an overtime exemption to 25 salaried workers. By erroneously claiming the exemption, the employer failed to pay overtime when those employees worked more than 40 hours in a workweek. Other violations occurred when Travel Lite paid production workers flat rates per day, regardless of the number of hours they worked, failing to pay overtime when they worked more than 40 hours in a workweek.

Child labor violations.A Chipotle Mexican Grill restaurant in Commerce, California,has paid$27,150 in civil money penalties for violating FLSA child labor requirements by assigning five minor employees to repeatedly load and operate a trash compactor and a cardboard compactor. Three times a day, the employer assigned two-employee teams, regardless of age, to collect trash and boxes and crush them in compactors, which resulted in violations when workers less than 18 years old loaded or operated the compactors, which the law prohibits by minor employees. The employer also provided all staff members, regardless of age, with the code needed to open the gate to access the compactors.

Workers erroneously categorized, paid lower wages.Technica LLCwill pay$130,619 in back wages and fringe benefits to 43 employees after investigators found the federal contractor violated the SCA and CWHSSA when it failed to pay required prevailing wages to warehouse employees on their contract for work at the Barstow Marines Corps Logistics Base in Barstow, California. The employer erroneously categorized employees performing work in several positions and paid them rates applicable to incorrect job categories. For example, Technica classified Material Identifiers and Examiners as Customer Service Representatives, and paid them $15.12 per hour, rather than the required rate of more than $20 per hour. The employer also paid workers below the required hourly rate for health and welfare benefits under the contract. Paying incorrect hourly base rates resulted in additional violations when Technica computed and paid overtime based on rates below those required by law.

Failed to pay prevailing wages and fringe benefits.F&P Constructionpaid$49,553 in back wages and fringe benefits to 35 employees working on the Reno Renewable Diesel Plant to resolve DBRA violations when it failed to pay prevailing wages and fringe benefits on a covered government contract and neglected to maintain certified payroll records and submit them on a weekly basis to the prime contractor, as required. The employer failed to pay some laborers, operators, and oilers working on a portion of the job site the prevailing wages and benefits required by the contract. The U.S. Department of Agriculture is funding the work at the Reno Renewable Diesel Plant.

DBRA-required hourly fringe benefits not paid.Linx Electrichas paid$22,501 in back wages to nine employees for violating DBRA when it performed work as a subcontractor for the U.S. General Services Administration on a federal contract for construction at the federal courthouse in Baton Rouge, Louisiana. The company paid workers the prevailing hourly wages but failed to pay the hourly fringe benefits also required by the DBRA. The company also failed to maintain some timekeeping records required by the FLSA.