DOL is Watching: Are You properly Classifying Employees?

Posted by National Alliance for Fair Contracting on

posted on: Wednesday, September 16, 2015

 

Recently, the United States Department of Labor (DOL) issued an Administrator’s Interpretation regarding the classification of independent contractors under the Fair Labor Standards Act (FLSA or Act). Much has been written about this “interpretation.” In review, the interpretation is best understood as an aspirational view based on an administrative belief that all workers should be employees. While DOL’s interpretation is supported by case law, in many cases, the supporting law constitutes minority or aberrational positions. Whether DOL’s position is ultimately sustained by the courts or not, it is important to understand DOL’s enforcement position.

The DOL takes the position that “most workers are employees under the FLSA’s broad definitions.” This pronouncement strongly signals that the DOL will continue to aggressively pursue misclassification claims. The DOL has entered into memoranda of understanding with at least 25 state enforcement agencies, as well as the IRS, in order to bring enforcement actions regarding alleged misclassifications.

Drywall contractor owes ‘tapers’ more than $98K in back wages

Posted by National Alliance for Fair Contracting on

PR Drywall of Hillsboro, Oregon, underpays 7 workers in wages and overtime

U.S. Department of Labor              Wage and Hour Division

Release Number: 15-136-SAN       Date: March 3, 2015

PORTLAND, Ore. — Seven “tapers” working for PR Drywall LLC of Hillsboro will receive more than $98,000 in back wages after a U.S. Department of Labor investigation found their employer failed to pay prevailing wages and overtime payments as they worked constructing the Tualatin Marquis Assisted Living Center. Built with federal financing assistance from the U.S. Department of Housing and Urban Development, the project and its contractors were subject to the Davis-Bacon and Related Acts and the Fair Labor Standards Act.

The department’s Wage and Hour Division investigated PR Drywall, a subcontractor on the Tualatin project. The agency determined that the tapers, also called drywall finishers, who prepare and press wet compound into joints, nail or screw holes in the drywall and then cover the wet material with tape, were paid below the prevailing wage rates required by the DBRA. The employees also worked beyond 40 hours in a workweek without being paid time and one-half, as required by law.

PR Drywall was found liable for $89,525 under the DBRA for prevailing wage violations, and $8,557 under the FLSA for overtime violations.

Honolulu subcontractor pays more than $305K in back wages, damages to 65 workers after US Labor Department investigation

Posted by National Alliance for Fair Contracting on

U.S. Department of Labor          February 9, 2015

Wage and Hour Division            Release Number: 14-2339-SAN (SF-9)

HONOLULU — M.H. Electric has paid $290,588 in back wages to 65 workers after the U.S. Department of Labor determined that the Honolulu-based subcontractor violated federal wage and hour laws at 10 federally funded construction projects awarded in Hawaii between 2012 and 2014 by the Hawaii Air National Guard and the U.S. Departments of the Navy, Army and Veterans Affairs. In resolving the department’s allegations, the company also paid an additional $14,507 in back wages and damages for overtime violations under the Fair Labor Standards Act.

The department’s Wage and Hour Division found M.H. Electric violated the Davis-Bacon and Related Acts and Contract Work Hours and Safety Standards Act. The company failed to pay its employees for their overtime hours in a timely manner. Instead, the employer systematically “banked” those overtime hours at straight-time wage rates for future use as vacation or sick time, or to be used when employees worked less than 40 hours. That violated the overtime standards of both the CWHSSA and the FLSA, which require that an employer pay time and one-half for hours worked beyond 40 in a workweek.

“Federal contractors owe it to taxpayers to comply with all applicable laws, including paying their workers fairly and fully,” said Terence Trotter, district director for the Wage and Hour Division in Honolulu. “In this case, we appreciate the cooperation shown by M.H. Electric to help resolve the matter expeditiously and to commit to future compliance with applicable labor standards.”

(Read More)

Owners of construction companies pay more than $108K in overtime back wages following US Labor Department investigation

Posted by National Alliance for Fair Contracting on

Some employees misclassified as independent contractors

Date:  January 29, 2015

U.S. Department of Labor

Wage and Hour Division

Release Number: 14-2338-DAL

NEDERLAND, Texas — Specialty Painting & Wall Covering Inc. and M & S Enterprise have paid 22 painters and sheetrock installers $108,783 in overtime back wages after an investigation by the U.S. Department of Labor’s Wage and Hour Division. The investigation revealed violations of the Fair Labor Standards Act’s overtime and record-keeping provisions and found that workers at M & S Enterprise were misclassified as independent contractors.

The division’s Houston District Office investigated both construction companies that are jointly owned and operated and employ workers who perform painting, sheetrock installation and finishing projects. Workers of Specialty Painting & Wall Covering were paid for up to 40 hours per week with a check from that company. When workers at Specialty worked more than 40 hours in a week, they were paid for the overtime hours with a separate check from M & S Enterprise at their straight-time rate with no taxes withheld. Workers of M & S Enterprise were misclassified as independent contractors and were paid straight time for all hours worked, including overtime hours.

(Read More)

3d_money_construction_dreamstime_xxl_21903206

Watco Terminal & Port Services to pay 261 North Dakota workers more than $300K in back wages following US Labor Department investigation

Posted by National Alliance for Fair Contracting on

U.S. Department of Labor
Wage and Hour Division
Release Number: 14-2069-CHI
Date: December 2, 2014

MINOT, N.D. — An investigation by the U.S. Department of Labor’s Wage and Hour Division found that load operators at three Watco Terminal & Port Services’ locations in Belfield, Stanley and Tioga were not paid for pre-shift work, as required by the federal Fair Labor Standards Act. Watco will pay 261 workers a total of $304,094 in overtime back wages.

“People must be compensated for all time on the job, including before and after a shift,” said Charles Frasier, district director for the Wage and Hour Division in Denver. “We hope other local employers take note of this case and ensure they are paying their workers properly.”

The investigation found that employees were not compensated for required attendance at pre-shift safety and turnover meetings. Another overtime violation occurred when Watco failed to compute overtime properly. The company also failed to maintain accurate records of all hours worked.

(Read More)

DOL Wage and Hour Division announces upcoming Prevailing Wage Seminars

Posted by National Alliance for Fair Contracting on

The Wage and Hour Division is pleased to announce the following Prevailing Wage Seminars for 2014:
Manchester, NH March 4-6, 2014
Phoenix, AZ March 18-20, 2014
Chicago, IL April 1-3, 2014
San Diego, CA April 22-24, 2014
Houston, TX May 7-9, 2014
Atlanta, GA June 3-5, 2014

If you wish to attend one of these seminars, please send an email to WHDPWS@dol.gov Your email should include your name, title, organization, mailing address, email address, and location of the seminar that you wish to attend. There is no fee for attending any of these seminars, however, space is limited. Upon receipt of this information, we will advise you whether your request can be accommodated.

(Read More)

Summit Drywall Inc. ordered to pay $550,000 in unpaid wages and damages to 384 workers to settle US Department of Labor lawsuit

Posted by National Alliance for Fair Contracting on

SEATTLE – The U.S. Department of Labor has obtained a consent judgment in the U.S. District Court for the Western District of Washington ordering Issaquah-based drywall installer Summit Drywall Inc., and its owner Thomas Kauzlarich, to pay $550,000 in overtime back wages and liquidated damages to 384 current and former employees. The judgment resolves an investigation and subsequent lawsuit by the department that found the company violated the Fair Labor Standards Act’s overtime and record-keeping provisions from Oct. 15, 2009, through April 15, 2013.

(Read More)  

3d_money_construction_dreamstime_xxl_21903206

Tempe floor contractor forced to pay $100k in back wages

Posted by National Alliance for Fair Contracting on

Tempe-based Flooring Demolition Specialists LLC has paid $103,554 in back wages and liquidated damages to 24 employees.

An investigation by the U.S. Department of Labor’s Wage and Hour Division found that the Tempe floor removal contractor willfully violated the overtime and record-keeping provisions of the Fair Labor Standards Act.

The investigation by the division’s Phoenix District Office disclosed that a certain group of employees was paid straight time for all hours worked and did not receive an overtime premium for hours worked beyond 40 per week, as required by FLSA. The Tempe company also failed to pay employees for hours worked while loading company trucks and for travel time to job sites.

What Records Must Be Provided to the Department of Labor?

Posted by National Alliance for Fair Contracting on

From restaurants in New York to childcare providers in Arkansas to the garment industry in Southern California, Department of Labor investigators continue to uncover FLSA violations by conducting unannounced workplace inspections.

Section 11(a) of the FLSA specifically authorizes representatives of the Department of Labor to investigate and gather data concerning wages, hours, and other employment practices:

The inspector may review documents showing the employer’s annual dollar volume of business transactions, involvement in interstate commerce, and/or work on government contracts.  Those documents are inspected to determine if the employer is a covered enterprise under the FLSA, or if the employees are protected by the FLSA because their work involves them in interstate commerce.

(Read More)