DOL Secures Nearly $1.2M in FLSA Back Wages, Damages for 965 Employees
October 28, 2021
The U.S. Department of Labor (DOL) Wage and Hour Division (WHD) separately announced $1,197,843 in back wages and liquidated damages owed to 965 employees by employers who reportedly committed Fair Labor Standards Act (FLSA) violations. The WHD's investigations disclosed employer actions that ran afoul of the FLSA’s minimum wage and overtime provisions; misclassified employees as independent contractors; and improperly deducted from employee wages for breaktime. The WHD also assessed civil penalties for two companies totaling $73,023 for their violations.
Personal vehicles used for business purposes.Clemson Subs LLC and Anderson Subs LLC, sandwich shops operating as Jimmy John’s franchises in South Carolina, violated the FLSA by failing to provide mileage reimbursement to workers required to use personal vehicles on behalf of the business, according to WHD investigators. The employer’s failure to pay mileage expenses reduced drivers’ wages below the federal minimum wage. The investigation has now led to the recovery of $27,209 in back wages for 74 workers.
Security guards misclassified as professional services.A security services company in Puerto Rico violated the FLSA by unlawfully misclassifying its employees as independent contractors and denying them overtime pay. According to investigators, Advance Investigation Group Inc. misclassified security guards as “professional services” workers or independent contractors, paid them at their regular hourly rate instead of the overtime rate, and failed to maintain complete payroll records for former employees. The WHD’s recovery totaled $106,279 in back wages for the 136 misclassified security guards.
Unpaid OT and breaktime.In Hawaii, GU Industrial & Business Corp. failed to count and pay for all hours employees worked, including those workweeks when they worked more than 40 hours in violation of the FLSA overtime provisions, a WHD investigation has revealed. The employer, which operates six Golden Coin restaurants in the state, also set up its payroll system to deduct meal breaktime from pay routinely regardless of whether staff took the breaks or had enough time. The division’s investigation led to $97,503 in recovery of unpaid wages for 137 workers, and the agency also imposed $23,240 in penalties. The WHD also detailed rampant restaurant industry violations in the Western Region with the Honolulu District alone, finding violations in 219 out of 228 investigations, and yielding recovery exceeding $1.4 million in back wages for nearly 1,700 employees.
Working lunch break, improper rate calculations.Parks Coffee California Inc. made illegal deductions from employees’ wages and calculated their overtime wages improperly in violation of the FLSA minimum wage and overtime provisions, according to the WHD. The company deducted one-hour lunch breaks from employees’ wages even though their breaks were not free of work, and it failed to document and compute bonuses and commissions into the employees’ rates of pay when they worked more than 40 hours in a workweek. The investigation led to recovery of $53,122 in back wages plus $53,122 in liquidated damages for the 50 affected employees.
Piece rates, no OT.The WHD found that San Diego construction contractor, New Vision Drywall Inc., dba Performance Drywall, intentionally failed to pay overtime wages to 568 employees including those working as drywall installers, tapers, and hangers. The employer violated the overtime provisions of the FLSA by paying employees on a piece-rate basis irrespective of the hours worked, with some employees working up to 58 hours per week. The employer owes $860,608 in back wages and liquidated damages and an additional $49,783 in civil penalties assessed for its reckless disregard of the law. The WHD highlighted the case as an example of continued compliance failures by San Diego construction companies, citing statistics from division investigators who recovered more than $21 million in back wages for more than 15,000 workers from 2016-2020.