Labor & Employment Law Daily Wrap Up, DOL NEWS—WHD nets $8.2M in back wages, damages resulting from reported FLSA violations, (Jan 29, 2025)

By Jonathan Anderson

The infractions resulted from practices such as paying straight time for all hours, misclassifying employees as independent contractors, and failing to pay the minimum overtime rate.

The DOL’s Wage and Hour Division separately announced, in the waning days of the previous Administration, its recovery of a total of $8,279,003 in back wages and damages for more than 1,549 employees working for drywall and painting companies, home care providers, a landscaping firm, and a Subway franchisee, for violations of the FLSA. Two employers also collectively paid $129,626 in civil money penalties.

Straight-time rates for all hours. Two commonly owned Arizona drywall and painting companies have been ordered to pay a total of $7,450,000 in back wages and liquidated damages to more than 1,400 employees to resolve violations of FLSA overtime regulations.

Phoenix-based Apodaca Wall Systems Inc. and Empire Wall Systems Inc. attempted to evade payment of overtime wages by paying hourly employees with multiple checks at straight-time rates for all hours worked, according to the WHD. The employers also used labor brokers to hire hourly workers who were paid in cash at straight time even when they worked more than 40 hours in a workweek.

Investigators further determined that the companies paid a piece rate, based on square feet completed, to workers outside the company’s payroll without regard to the number of hours worked. Crew leads received and then redistributed the piece-rate pay to these workers, denying them overtime pay required by law.

In addition to requiring the back wages and liquidated damages, the consent judgment permanently forbids and restrains the employers from future FLSA violations and orders them to pay $125,000 in civil money penalties.

The DOL filed its lawsuit in the District of Arizona; the case is No. CV-24-03560-PHX-DJH.

Independent contractor misclassification. Two northwest Louisiana home care companies collectively paid $446,334 in back wages and liquidated damages to 88 workers for FLSA overtime violations.

Inner Quality Services LLC of Stonewall and Sincere Client Care Services LLC of Shreveport misclassified the employees as independent contractors and paid straight-time rates for all hours worked, including for hours over 40 in a workweek, the WHD said.

The division recovered $70,106 in back wages and an equal amount in liquidated damages from Inner Quality Services for 24 employees, and $153,061 in back wages and an equal amount in liquidated damages for 64 employees at Sincere Client Care Services.

OT rate not paid. Pfefferle Lawns LLC has paid $319,065 in back wages to 49 workers for failing to comply with FLSA overtime regulations.

Investigators determined that the landscaping company in New Orleans, Louisiana, failed to pay overtime at time and one-half an employee’s rate of pay for hours over 40 in a workweek. The employer also did not keep accurate records.

Multiple OT infractions. The owner and operator of six Subway franchise locations in Massachusetts has been ordered to pay $63,604 in back wages and liquidated damages to 12 employees for violating FLSA overtime provisions.

The employer paid certain employees set weekly amounts for varying overtime hours worked, according to the WHD. Further, the employer deprived certain employees of the required overtime rate by paying them the same hourly amount for all hours worked, including hours over 40 in a workweek. The WHD also alleged that the employer failed to keep accurate or complete records of some employees’ work hours and wage payments.

As part of the consent judgement, the employer was ordered to pay civil money penalties of $4,626 because of the willful nature of the FLSA violations. The court also issued a permanent injunction forbidding the employer from future FLSA violations.

The investigation involved the following restaurants: Om Soham Inc. in Framingham; Om Soham Om Inc. in Sudbury; Shri Krsna Inc. in Oxford; Shri Ram Inc. in Framingham; Shri Vedmata Gayatri Inc. in Sturbridge; and Shri Vishnu Inc. in Leicester.

The DOL filed its lawsuit in the District of Massachusetts; the case is No. 4:23-cv-40119-MRG.

Companies: Apodaca Wall Systems Inc.; Empire Wall Systems Inc.; Inner Quality Services LLC; Sincere Client Care Services LLC; Pfefferle Lawns LLC; Om Soham Inc.; Om Soham Om Inc.; Shri Krsna Inc.; Shri Ram Inc.; Shri Vedmata Gayatri Inc.; Shri Vishnu Inc.

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