DOL Recovers $452K Owed to More Than 96 Employees
October 19, 2022
The U.S. Department of Labor (DOL) Employee Benefits Security Administration (EBSA) and Wage and Hour Division (WHD) have separately announced combined recovery amounts totaling $451,768 in back waged, benefits, and damages for more than 96 workers for violations of the Employee Retirement Income Security Act (ERISA), the McNamara-O’Hara Service Contract Act, the Contract Work Hours and Safety Standards Act, and the Fair Labor Standards Act (FLSA).
ERISA consent judgment.A federal district court entered a consent order and judgment against the now defunct Paramount Industrial Machining Inc., its CEO, and its president, which includes $18,578 in 401(k) plan restorations, including lost opportunity costs, arising out of ERISA violations. In September 2020, the Secretary of Labor filed suit after EBSA found that the company, its CEO, and president failed to remit employee voluntary salary deferral contributions and loan repayments to the Paramount Precision Products Inc. 401(k) Plan. EBSA also determined that the president failed to remit healthcare premiums to the Paramount Industrial Machining Inc. Welfare Benefit Health Plan.
The consent order and judgment the president to restore $7,026 to the Paramount Precision Products Inc. 401(k) Plan; $15,217 in unpaid healthcare premiums to the Paramount Industrial Machining Inc. Welfare Benefit Health Plan; and $3,562 to one individual for unpaid health claims. The president must also pay $5,161 in penalties for violations of fiduciary responsibilities. The order further requires the CEO to restore $11,553 to the Paramount Precision Products Inc. 401(k) Plan and to pay $2,310 in penalties for violations of fiduciary responsibilities. The $18,578 in restorations to the 401(k) Plan will be credited to the investment accounts of all individuals who were employees of the company during the eligible period.
Incorrect wage rates.Pacific Pest Control Inc., in Dededo, Guam, will pay $17,164 in back wages to eight workers for denying full wages and benefits owed under the McNamara-O’Hara Service Contract Act and Contract Work Hours and Safety Standards Act, the DOL said. Investigators found that the employer, a federal subcontractor providing pest control services at U.S. Air Force and Navy installations in Guam, violated the McNamara-O’Hara Service Contract Act when it paid lower hourly rates than those required for pest controllers and failed to fully provide their health benefits as required. Investigators also found the employer violated the overtime pay requirements under the Contract Work Hours and Safety Standards Act when basing overtime calculations on the lower, incorrect wage rates.
Minimum wage violations.Boston restaurants, Simco’s Roslindale and Simco’s Mattapan and their two owners must pay $195,680 in back wages and liquidated damages to 20 employees to remedy FLSA violations pursuant to a federal court order. The employers are also on the hook for $14,980 in civil money penalties. WHD investigators found that Simco’s Restaurant of Roslindale Inc., dba Simco’s Roslindale, and Simco’s Restaurant Inc., dba Simco’s Mattapan, and their owners violated the FLSA by failing to properly compensate employees at the federally required minimum wage of $7.25, failing to pay some employees overtime premiums for hours over 40 in a workweek, and failing to keep complete and accurate records required by law. The consent judgment and order also permanently enjoin the restaurants and owners from violating the FLSA, according to the DOL.
Working off-the-clock.Douglas Inc., Douglas Express Delivery, must pay $44,280 in back wages and liquidated damages to two Mississippi employees after failing to compensate them for work they did off-the-clock from their homes in violation of the FLSA, following a WHD investigation. The employer must also pay $882 in penalties for repeat violations. According to investigators, the employer allowed employees to work off-the-clock without compensation. After working their regular shifts and clocking out, the employees would continue to perform work-related tasks from home such as responding to customers’ phone calls, texts, and emails, providing directions to drivers for deliveries and finding alternate drivers when vehicles broke down. The division also cited the employer with a recordkeeping violation for failing to record the hours employees spent working from home after leaving the physical worksite.
Lost tip credit.A federal investigation recovered $157,287in back wages for 65 North Carolina workers after finding Mugen Inc., dba Jay’s Kitchen, denied the employees their full wages by keeping portions of their earned tips in violation of the FLSA. WHD investigators determined that the employer kept a percentage of employee tips, which is a minimum wage violation. By doing so, the employer lost its right to claim a tip credit and owed the workers the difference between their paid cash wage and the federal minimum wage. The employer also violated the FSLA’s child labor law provisions by allowing three 15-year-old employees to work more hours, and later hours, than permitted by law, and as a result, had to pay $1,915 in civil penalties to address the child labor violations.