Industrial services company and its president sued for failure to compensate employee donning and travel activities

The DOL on July 31 announced that it has filed a federal lawsuit against MPW Industrial Services Inc. and its president after an investigation by the DOL’s Wage and Hour Division (WHD) disclosed evidence of FLSA minimum wage, overtime and recordkeeping violations. MPW Industrial Services provides industrial support services, including cleaning services, to area steel mills. The DOL’s suit seeks to recover unpaid minimum wage and overtime compensation for 63 current and former employees, and also requests that the defendants be permanently enjoined from committing future FLSA violations.

The WHD’s investigation of the company’s Lorain establishment found that employees reported to the facility at the beginning of their shift to perform necessary tasks, such as loading trucks with personal protective gear and industrial cleaning equipment to use at steel mills. The employees then traveled in company vehicles to job sites throughout Ohio. However, the WHD found that the defendants failed to record and compensate employees for time spent traveling between the company’s office and job sites; nor did they compensate employees for shop time and wait time at the company and job sites. The defendants’ failure to pay the employees for all hours worked resulted in minimum wage and overtime violations.

Investigators also found evidence that the company altered timekeeping records to show fewer work hours than actually performed by employees and omitted other required employee information, in violation of FLSA recordkeeping requirements.

The company has refused to pay the back wages owed to the affected employees, according to the WHD, which prompted the agency to file suit. The WHD also noted that a 2009 investigation at the company’s Canton location found similar violations.

“MPW Industrial has been found in violation of the FLSA previously for failing to compensate employees for all hours worked, such as travel time and shop time,” said WHD District Director George Victory. “Since its previous investigation, the company has still not taken steps to ensure employees are paid proper minimum wage and overtime compensation in compliance with the FLSA.”

Significant child labor violations were found in grocery stores operating under the names of Fareway Stores Inc. and Hy-Vee, two of the largest grocery store chains in the area. These violations included allowing minors to perform prohibited hazardous occupations, such as loading and/or operating power-driving paper balers, meat slicers, and bakery machines, and operating a motor vehicle.

Fareway Stores Inc. has signed a settlement agreement with the department, committing to ensure future compliance with the FLSA at all of its present and future establishments. The agreement includes training managers about prohibited hazardous occupations for minors, posting FLSA information for employee awareness, establishing an email contact for reporting potential violations, and implementing a new policy to ensure its employment of minors is in compliance with the child labor provisions of the law.

Big Fireworks. American Eagle Superstore Inc., and its subsidiary Big Primo LLC, both doing business as Big Fireworks, agreed to pay 119 employees $55,891 after an investigation by WHD found overtime and minimum wage violations under the FLSA for employees working in Michigan, South Carolina, and Indiana. American Eagle also paid a civil money penalty for violations of the child labor provisions of the Act.

Lansing-based American Eagle Superstore and its subsidiary operate five fireworks outlets and 20 seasonal firework tents as Big Fireworks in Michigan and Indiana. The company also operates two additional warehouses located in Lansing and Fort Mill, S.C. Two additional subsidiaries, Rt 83 Investments LLC, which operates as Odyssey Fireworks, were also included in the investigation.

The investigation found that the company violated hazardous orders regulating child labor when it allowed minors to operate forklifts and work in warehouses where fireworks were stored. The company and its subsidiary also failed to pay warehouse, retail store, and tent employees at time and one-half their hourly rates of pay for hours worked beyond 40 per week, instead paying straight time or a salary for all hours worked. The fireworks retailer improperly classified some employees as exempt from overtime and paid them fixed salaries without regard to the number of hours they worked. American Eagle also failed to record and pay for all hours of work.

American Eagle Superstore has agreed to pay back wages found due for employees in Michigan, South Caroline, and Indiana.

Hawker Beechcraft Inc. signed a compliance agreement with the DOL as a result of an investigation by the WHD found the Wichita company interfered with employees’ rights under the FMLA.

A 20-year employee terminated in violation of the Act will be reinstated and receive a total of $45,000 in back wages and 15 months of accrued vacation and sick leave hours. The company offered to write a letter of explanation to the employee’s creditors, who had threatened foreclosure on his home. Two other employees, who also were wrongfully terminated, will receive a total of $3,800 in back wages.

The investigation found that Hawker Beechcraft required employees to submit complete medical records to the company physician prior to scheduling an appointment for a second opinion. The company allegedly terminated those employees who failed to provide these private medical records in a timely manner, a practice that discouraged employees from applying for FMLA leave. Under the FMLA, an employer only has the right to request medical certification containing sufficient medical facts to establish that a serious health condition exists.

The company also failed to provide employees the required notification of their eligibility, rights and responsibilities under the Act.

Hawker Beechcraft has agreed to provide FMLA information to its 6,000-member workforce, to provide proper notification of eligibility, rights and responsibilities to employees within the time frames required by the Act, to revise its administrative procedures for requesting FMLA leave, and to provide additional FMLA training to its human resources staff.

Flooring Demolition Specialists LLC has paid $103,554 in back wages and liquidated damages to 24 employees after an investigation by the WHD found that the Tempe floor removal contractor willfully violated the FLSA’s overtime and recordkeeping provisions.

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. Flooring Demolition Specialists also failed to pay employees for hours worked while loading company trucks and for travel time to job sites. Investigators found that other employees of the firm who performed the same type of work did receive proper overtime pay.

The company has paid $51,777 in overtime back wages and an equal amount in liquidated damages to the affected workers. It has also paid $6,000 in civil money penalties because of the willful nature of the violations found. A settlement agreement with the department requires the employer to post notices of FLSA’s rights in prominent locations accessible to all workers, in English and Spanish, along with the WHD’s contact information. Every employee will be given a copy of the notice. The employer has also agreed to make and provide, upon request, periodic audits of its payroll to ensure proper payment of wages to all employees.

The DOL’s Wage and Hour Division (WHD) announced on August 5 that two El Jimador Mexican Restaurants, located in Clemson and Westminster, South Carolina, have agreed to pay $74,619 in back wages to 13 employees following an agency investigation. The establishments, owned and operated by several members of the same family, were in violation of FLSA overtime, minimum wage and recordkeeping provisions at both locations, according to the WHD.

The FLSA violations found at both restaurants resulted from the employers’ failure to compensate employees properly for all work hours. By reviewing payroll records and conducting employee interviews, investigators determined that tipped employees, such as servers, were made to rely primarily on tips for pay, the WHD said. Their wages amounted to less than the federal minimum wage of $7.25 per hour. Additional minimum wage violations occurred when the employers purportedly made illegal deductions from workers’ pay for the cost of their uniforms. The employer also allegedly failed to pay workers overtime compensation as required by the FLSA, and failed to maintain records of employees’ work hours and wages, in violation of statutory recordkeeping requirements.

“We found several low-wage, at-risk employees working off the books at both El Jimador Mexican Restaurants,” said Michelle Garvey, director of the division’s Columbia office. “Many of them worked long hours, often averaging 60 hours a week, but earned far below the minimum wage and no overtime compensation.”

In addition to paying the back wages owed, the restaurants have also agreed to maintain future compliance with the FLSA by signing a Stipulation of Compliance with the DOL.

The WHD’s investigations were conducted under a multiyear enforcement initiative focused on the restaurant industry in South Carolina, where widespread noncompliance with the FLSA’s minimum wage, overtime and recordkeeping provisions has been found. Since fiscal year 2012, the WHD’s Columbia District Office has concluded more than 130 restaurant investigations, resulting in the recovery of more than $1,580,000 in back wages for more than 1,630 workers, the agency said.

Presbyterian Healthcare Services in Albuquerque, one of the largest health care providers in New Mexico, has agreed to make corrections to its Family and Medical Leave Act policies and practices following an investigation by the DOL’s Wage and Hour Division (WHD) that found several FMLA violations affecting more than 9,600 employees. The violations included wrongful denial of leave to nearly a dozen eligible employees and improperly requesting more information than permitted under law, according to a WHD statement.

The terms of the settlement agreement resolving the alleged violations include requirements that Presbyterian make corrections to the wrongful denials and provide FMLA leave benefits to future eligible employees; supply FMLA training to managers; update its policy regarding normal call-in procedures when employees need FMLA leave; give proper advance notice of fitness-for-duty medical certification requests for employees to return to work; and eliminate the annual automatic renewal of medical certification without a leave request from the employee.

“The FMLA gives eligible employees the ability to help balance the demands from work and family that we all face without the worry of being fired or disciplined for taking FMLA leave,” said Cynthia Watson, WHD regional administrator in the Southwest. “This agreement will impact thousands of families in New Mexico by ensuring employers will comply with the protections and benefits afforded to them under the FMLA.”

T.G.I. Fridays, a subsidiary of Minnesota-based Carlson, has agreed to change its leave policy in order to achieve FMLA compliance, according to an announcement on August 7 by the DOL’s Wage and Hour Division (WHD). The move affects employees at 272 company-owned locations. Fridays will also correct FMLA violations found during an investigation of one of its restaurants in Shreveport, Louisiana, and pay an employee $1,455 in back wages.

A WHD investigation found the company had violated the FMLA by failing to reinstate the employee to the same or an equivalent position, including pay, benefits and other terms of employment, and that the worker was not allowed to return to work immediately following FMLA-covered leave. The employee lost three weeks’ pay due to the delay.

The company’s FMLA policy and worker rights notification practices were also inconsistent with federal law, according to the WHD. The policy did not include information on the FMLA’s military family leave provisions, information on the right to take FMLA-covered leave on an intermittent or reduced-schedule basis, and it misstated the 12-month employment requirement for FMLA eligibility as being 12 continuous months, the agency said.

“Workers should not have to choose between their job and the family members who need their care,” said Laura Fortman, principal deputy administrator for the WHD. “Ensuring a work-life balance is the cornerstone of the Family and Medical Leave Act, which has been the law of the land for 20 years. It gives America’s workers the right to take unpaid, job-protected leave to care for themselves or a loved one. As we move into its third decade, we are more dedicated than ever to enforcing the law when necessary to protect workers, yet continue to offer assistance to those employers who need help to come into compliance.”

$124,239 in back wages paid to workers for FLSA overtime violations at military and protective gear manufacturer

The DOL’s Wage and Hour Division (WHD) has recovered $124,239 in back wages for 79 current and former workers at Tyr Tactical LLC, a military and protective gear manufacturer, after an agency investigation found the company in violation of FLSA overtime provisions.

Investigators from the WHD’s Phoenix District Office found that the employer paid hourly workers straight time wages for all hours worked without any overtime premium for hours worked beyond 40 per week, as required by the FLSA, according to an agency release on August 8.

The company has agreed to comply with all provisions of the FLSA and has paid the back wages to the workers.

“These low-wage employees often worked an average of 60 hours per week, and this violation made a significant dent in their paychecks,” said Eric Murray, director of the WHD’s Phoenix District Office. “Protecting and securing employees’ basic workplace rights under the FLSA are central to what we do at the department. It is always a good outcome when an employer takes immediate action to come into compliance and pay back wages.”

The violation in this case could have been avoided had the employer had done its homework, according to Murray. He recommended that employers either check with the WHD website or call its local office when they are contemplating major wage and hour policy decisions.

By Pamela Wolf, J.D.

Secretary of Labor Thomas Perez has moved to implement the Supreme Court’s ruling in United States v. Windsor that struck down as unconstitutional Section 3 of the Defense of Marriage Act, which had denied federal benefits to legally married, same-sex couples. As a result of that ruling, federal laws will now apply equally to legally married, same-sex couples in addition to opposite-sex couples.

However, a DOL spokesperson clarified to Employment Law Daily that at this point no regulatory guidance has been issued; rather, internal direction has been given to DOL staff regarding the impact of the Windsor decision. The DOL’s Wage and Hour Division has also updated the language of some of its sub-regulatory guidance interpreting the Family and Medical Leave Act’s application to covered private-sector employers.

On Friday, August 9, Perez sent an email to DOL staff outlining action being taken “to implement this ruling as swiftly and smoothly as possible.” The Secretary wrote, “I have directed Agency Heads within the Department to look for every opportunity to ensure that we are implementing this decision in a way that provides the maximum protection for workers and their families.”

Perez also noted that the DOL has updated several guidance documents to remove references to DOMA and “to affirm the availability of spousal leave based on same-sex marriages under the Family and Medical Leave Act (FMLA).”

The Wage and Hour Division’s FMLA regulations define “spouse” as a husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides. Indeed, this definition is now reflected in a fact sheet issued by the DOL this month, Qualifying Reasons for Leave under the Family and Medical Leave Act (#28F).

Perez also pointed out that the Office of Personnel Management has announced the extension of benefits to federal employees and annuitants who have legally married a spouse of the same sex. “By extending unemployment compensation, health insurance and other important benefits to federal employees and their families, regardless of whether they are in same-sex or opposite-sex marriages, the Obama Administration is making real the promise of this important decision,” Perez wrote.

Beaverton, Michigan, heavy equipment company William J. Lang Land Clearing has been found liable for $106,897 in back wages to 23 employees as the result of a DOL Wage and Hour Division (WHD) investigation. The company performed work on six federally funded road projects in Michigan. A DOL administrative law judge issued a decision and ordered the company to pay the back wages that a federal district court and the Sixth Circuit Court of Appeals had previously determined were owed to employees, according to an August 13 Wage and Hour statement.

The WHD’s investigation found that William J. Lang Land Clearing misclassified power-equipment operators so that they were paid less than the required prevailing wages and fringe benefits for work on a federally funded project for the Michigan Department of Transportation (MDOT) — a violation of the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act (CWHSSA). Because the company failed to pay the correct prevailing wage rate, overtime compensation was also calculated inaccurately in violation of the CWHSSA.

The WHD said the company also improperly took credit toward its fringe benefits requirement by averaging its employee health insurance costs on an annual basis. The DOL filed an order of reference against the company after the case failed to settle administratively.

The MDOT, the contracting agency, has released $84,095 for payment of back wages due that it withheld from payments to the employer during the course of the litigation, according to the WHD. William J. Lang Land Clearing has paid the additional wages owed of $22,802.

Under the Davis-Bacon Act, all contractors and subcontractors performing work on federal and certain federally funded projects must pay their laborers and mechanics the proper prevailing wage rates and fringe benefits as determined by the Secretary of Labor. On a Davis-Bacon Act covered project, the prime contractor is responsible for the compliance of all subcontractors.

The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts of more than $100,000. It requires contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rate of pay for all hours worked over 40 in a workweek.

Company pays back wages to agricultural workers, civil money penalties after WHD finds H-2A program violations

The DOL’s Wage and Hour Division (WHD) announced on August 14 that Adams Land and Cattle Co., a major cattle research and development facility and feeding operation, has paid $127,615 for back wages owed to 68 agricultural workers employed at the company’s Broken Bow cattle feed lot after an investigation disclosed violations of H-2A temporary agricultural program standards. The company has also paid $101,600 in civil money penalties for violations.

Adams Land and Cattle employed Mexican nationals under the H-2A program. The investigation found multiple program violations, including unlawful rejection of U.S. applicant workers, preferential treatment of H-2A workers, failing to reimburse transportation costs, and not paying the required wage rate. The company also did not properly record hours worked, took illegal deductions from wages, and failed to provide all workers a copy of their work contracts, according to the WHD. Nor did the company notify the DOL in writing of employment separation of H-2A workers as required.

At this time, the company has ceased using H-2A workers at its facilities, the agency said. As a result of the investigation, 29 U.S. workers were paid H-2A back wages of $31,758.17 after it was determined they were paid less than the H-2A workers for corresponding job assignments.

“Employers who choose to participate in the voluntary H-2A program must realize they are required to follow all of the labor standards of the program,” said Michael Staebell, district director of the Wage and Hour Division in Des Moines. “When that same employer certifies that he cannot find enough U.S. workers to work in his business, he must also assume the responsibility of learning the specifics of this program.”

Agency files suit against company it claims is repeat offender for FLSA violations

The DOL announced earlier this week that it filed a lawsuit in the Northern District of Texas against NB Wholesale Inc., dba Silver Star Imports, and five individuals, in an effort to recover unpaid minimum wages and overtime pay, liquidated damages and civil money penalties for FLSA violations. The DOL is also seeking injunctive relief.

The lawsuit was filed after a Wage and Hour Division (WHD) investigation found that the company failed to pay current and former cashiers, stockers, and delivery workers in compliance with the FLSA. The majority of grocery staff and delivery drivers, who worked up to six days a week and averaged more than 53 hours a week, were paid a fixed salary for all hours worked, according to investigators. These employees were not paid time and one-half their regular rate, as required by the FLSA, for hours over 40 in a workweek. In some cases, employees’ earnings purportedly fell below the minimum wage rate of $7.25 per hour.

The WHD said that investigations conducted 2012 and 2013 found that the company paid workers on a weekly salary that was often insufficient to cover the minimum wage for all their hours of work. The company did not pay overtime for hours worked over 40 in a workweek and did not maintain records of employees’ hours and pay, according to those investigations.

“Silver Star Imports has been investigated before, and the employers have continued to deliberately disregard the most basic requirements of the FLSA,” said Cynthia Watson, the WHD’s regional administrator in the Southwest. “Despite the company’s agreement in 2012 to pay back wages and comply with the overtime, minimum wage and recordkeeping requirements, no payments have been made to employees. We have seen no changes in its unlawful pay practices.”