US Department of Labor Recovers $348k in Back Wages, Liquidated Damages for 144 Arizona Construction Workers Willfully Denied Overtime Pay

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VW Connect assessed $48K in penalties for intentional violations

Agency: Wage and Hour Division
Date: June 9, 2022
Release Number: 22-1136-SAN

PHOENIX – A federal investigation has recovered $348,380 in back wages and liquidated damages for 144 underpaid workers of an Arizona construction employer who failed to pay their overtime wages.

The U.S. Department of Labor’s Wage and Hour Division determined that VW Dig LLC – operating as VW Connect – automatically deducted 30-minute meal break periods every day even when employees worked through these periods, a violation of the Fair Labor Standards Act. The employer also failed to pay all hours worked due to improper recordkeeping that resulted in work hours often missing from payroll.

The investigation found the employer owed workers $174,190 in overtime wages earned for hours worked over 40 in a workweek. In addition to back wages and an equal amount of damages, the department assessed VW Connect with $47,926 in penalties for the willful nature of the violations.

“Manipulating timesheets to avoid paying a worker’s full earnings illegally denies them the wages on which they depend to care for themselves and their families. It also deprives them the dignity they are due,” said Wage and Hour Division District Director Eric Murray in Phoenix. “The outcome of this investigation shows that employers who violate the law can face costly consequences in the form of damages and penalties.”

In fiscal year 2021, the Wage and Hour Division recovered more than $36 million in wages owed to more than 21,000 construction industry workers. The Bureau of Labor Statistics projects more than 220,000 industry workers quit their jobs in April 2022 – the third highest number since 2012 – and 449,000 job openings in the industry, all of which makes for a job market in which employers must compete for workers.

“Employer who don’t pay workers all of the wages they’ve earned are likely to find it increasingly difficult to retain and recruit the people they need,” Murray explained. “Companies that comply with the law by paying full wages and benefits – and treating workers with the dignity and respect they deserve – will have a competitive advantage over those who cheat workers.”

Employers and workers can call the division confidentially with questions regardless of their immigration status. The department can speak with callers in more than 200 languages through the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, and its search tool if you think you may be owed back wages collected by the division.

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We Need to Talk About Wage Theft

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Ericka Cruz Guevarra, Farida Jhabvala Romero ,Alan Montecillo, Maria Esquinca
June 8, 2022 – KQED

In California, tens of thousands of workers aren’t getting paid what they’re owed by their employers. Many of these workers are low-wage earning immigrants in industries like construction, home care, and food service.

The state actually has a system in place where people can file claims of wage theft. But the system currently has a huge backlog, leaving people waiting years before they can try and and recover their money. In some cases, workers claim their employers stole tens or even hundreds of thousands of dollars from them.

The result? Many low-wage Californians miss out on rent, food, and can even lose their homes.

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Biden issues executive orders to spur clean energy construction

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Published June 7, 2022 – Construction Dive
Julie Strupp, Editor

Dive Brief:

President Joe Biden announced on Monday three executive orders under the Defense Production Act to increase domestically manufactured clean energy technology and boost clean energy construction projects.

The orders aim to expand manufacturing of critical clean energy technologies and put the financial power of federal procurement behind clean energy. It also seeks to boost solar panel supply in order to accelerate solar projects, which are one of the priorities in the $1.2 trillion Infrastructure Investment and Jobs Act.

America’s solar industry is facing tariffs on solar panels imported from Cambodia, Malaysia, Thailand and Vietnam, which supply about 80% of U.S. panels and parts. The tariffs have delayed or canceled hundreds of utility-scale solar projects; one of Biden’s orders provides a two-year tariff exemption to support construction projects in the United States right now, according to the White House press release.

Dive Insight:

The president can invoke the 1950 DPA to order private businesses to prioritize the production of materials that have been deemed necessary for national defense. In addition to pausing tariffs amid an ongoing Commerce Department probe to shore up the solar supply chain and prioritizing federal purchase of U.S.-made solar systems, Biden authorized the Department of Energy to rapidly expand domestic manufacturing of:

  • Solar panel parts.
  • Building insulation.
  • Heat pumps for buildings.
  • Equipment to make and use clean electricity-generated fuels.
  • Critical power grid infrastructure like transformers.

The administration said the new orders will help the government meet its goal of eliminating carbon from the country’s power supply by 2035, and will protect clean energy jobs and builds.

“Together, these actions will spur domestic manufacturing, construction projects and good-paying jobs – all while cutting energy costs for families, strengthening our grid, and tackling climate change and environmental injustice,” the White House release said.

The executive actions come after the Biden administration in May launched the IIJA-funded Interconnection Innovation e-Xchange to get more sources of clean energy connected to the national power grid. The Act includes $65 billion in clean energy investments.

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Ariz. Contractor Faces Big Fines Over Alleged Worker Pay Infractions

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June 7, 2022 – Jim Parsons
ENR Southwest

A federal judge has ordered a Tempe, Ariz., plastering and stucco contractor to rectify longstanding worker recordkeeping violations or face weekly coercive fines of up to $10,000.

The May 27 order, issued by US District Court Chief Judge G. Murray Snow against Valley Wide Plastering Inc., its owners and vice president, marks the latest chapter in a long-running effort by the U.S. Dept. of Labor to force firm compliance with the federal Fair Labor Standards Act.

According to court documents, separate department investigations, conducted in 2012 and 2017 into allegations of payroll discrepancies at Valley Wide, found that owners Jesse Guerrero and Rose Guerrero, and vice president J.R. Guerrero, intentionally allowed inaccuracies in the recording of employees work hours.

Examples included filling in false hours or manually altering the number of hours employees recorded without adequate justification. Evidence also suggested that Valley Wide failed to maintain daily time and payment records, including paying wages from non-payroll accounts, and intentionally reduced regular employee rates to give the false appearance of overtime pay.

A February 25, 2021, preliminary injunction, also issued by Judge Snow, ordered Valley Wide to implement a reliable timekeeping system and maintain accurate and complete records of each employee’s gross wages, deductions and net pay. The company subsequently converted from a piece-rate to an hourly wage system, with employees documenting time using a paper-and-pencil system.

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