Wage & Hour Legal Update

Wage and Hour Review – December 14

WageandHourLegalUpdate

Wage and Hour Division (WHD) Cases

WHD-e1353093742800This week shows how successful the Wage & Hour Division enforcement initiatives can be. Two of these initiatives, one targeting the California restaurant industry, the other focusing on the Los Angeles Fashion District, recovered almost $1 million in a very short period of time. If the DOL came knocking to review payroll records, go over employment practices, and interview employees, how confident are you that everything is in total compliance (and has been for the past three years)?

Another noteworthy case came against a painting company that changed the status of employees working on weekends to independent contractors. This weekend work happened to be the same work these employees performed for the company on weekdays. The employer used this classification to sharply cut down overtime costs and employment taxes. Might be a cunning fiscal move if this willful misclassification was not completely illegal.
Violators
San Francisco and Los Angeles Restaurants (part of ongoing enforcement initiatives on the California restaurant industry)

Violations

  • Failed to pay workers for pre-shift and post-shift work
  • Paid employees cash wages “off the books”
  • Paid fixed salaries for all hours worked without regard to minimum wage and overtime requirements
  • Missed payroll or failed to pay employees on scheduled pay days
  • Failed to maintain accurate records of employees’ wages and work hours

Recovery
$672,333 in unpaid minimum wage and overtime compensation for 273 employees working as cooks, bussers, servers and other restaurant staff.

Violators
Ten Garment Contractors in the Los Angeles Fashion District

Violations

  • Paid employees a piece rate (paid for each piece they sewed or cut) without regard to minimum wage or overtime pay requirements
  • Failed to pay workers minimum wage of $7.25 per hour and the California minimum wage of $8 per hour
  • Failed to pay overtime premium for hours worked over 40 in a week
  • Significant record-keeping violations, including falsified time cards, under-reported actual hours worked and inaccurate time records

Settlement
$326,000 in back wages for 185 employees

Violator
Clark Cooper Painting LLC (Jacksonville, FL)

Violations

  • Paid painters a piece-rate basis for work performed on weekends, without regard to the number of hours worked or to overtime obligations
  • Improperly changed status of employees as “independent contractors” on the weekends for the same work they performed as employees Monday through Friday
  • Failed to maintain accurate records of regular and overtime hours worked and regular and overtime pay

Settlement
$45,983 in back wages to 26 painters

Violator
Third Generation Electric (Tulsa, OK)

Violations

  • Failed to pay employees the required wages and fringe benefits applicable to the classifications of work they performed while working as a subcontractor on an American Recovery and Reinvestment Act-funded contract (violations of the Davis-Bacon and Related Acts)

Settlement
$26,770 in back wages to 19 current and former electricians and equipment operators


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