Professional Service Agreement

DOL Recovers $908K for 482 Workers After Finding FLSA and Government Contract Worker Violations

August 11, 2022

The U.S. Department of Labor (DOL) Wage and Hour Division (WHD) has separately recovered $908,779 in back wages, benefits, and damages for 482 workers due to reported violations of the Fair Labor Standards Act (FLSA), McNamara-O’Hara Service Contract Act, and Contract Work Hours and Safety Standards Act. The violations related to misclassification of construction workers as independent contractors, not paying overtime, not paying the required minimum wage for government contractors, and child labor violations.

Joint employers misclassified construction workers.The WHDrecovered$246,570 in overtime back wages for 306 employees after investigators found that St. Rose, Louisiana-based PL Construction Services violated the FLSA when it misclassified its workers as independent contractors, many of whom worked on projects involving Baton Rouge-based Lanehart Commercial Painting, dba Lanehart. PL Construction paid the misclassified workers straight-time rates for all hours worked, including those over 40 in a workweek in violation of overtime regulations, and failed to maintain complete and accurate records of hours that employees worked. Lanehart paid $199,342 to 243 employees for which the division found them jointly liable. PL Construction Services paid the remaining balance of $47,228 to 76 employees.

The WHD determined that during the investigation period, a joint employment relationship existed between PL Construction and Lanehart for workers employed on Lanehart projects. Among other relevant factors: PL Construction employees worked almost exclusively for Lanehart; at work sites, Lanehart supervised PL Construction workers, determined the number of workers needed and when, and kept records of hours PL Construction employees worked; and PL workers’ labor was essential to Lanehart’s operations and occurred on Lanehart’s projects.

FLSA overtime and child labor violations.Tom Willumson LLC, dba Concept Construction, has paid$374,493 in wages and liquidated damages to 62 construction workers for FLSA violations that reportedly occurred when the Cleveland contractor failed to provide one worker their final paycheck, resulting in a minimum wage violation; misclassified some workers as independent contractors and paid them straight-time for all hours worked, resulting in overtime violations when they worked more than 40 hours in workweek; and paid some workers the federal minimum wage and then provided them bonuses to make up the difference between the minimum wage and a previously agreed-upon rate of pay, which led to the employer’s failure to pay the required overtime rate.

The WHD also assessed a $14,944 civil money penalty after investigators found that Concept Construction employed an 11-year-old as a groundskeeper, who was allowed to operate a farm-style tractor and weed-eating equipment, as well as work more than eight hours in a day, all in violation of FLSA child labor provisions.

Government contract pay rate and OT violations.The WHD recovered $156,837 in back wages from Tunista Services LLC, after investigators determined that the Honolulu contractor paid 46 workers lower wages than the law allows for the type of work they performed under federal contracts awarded by U.S. Marine Corps, Navy, Army, and Coast Guard in Hawaii. The employer violated that McNamara-O’Hara Service Contract Act when it paid truck drivers, material handling laborers, warehouse specialists, forklift operators, service order dispatchers, janitors, and other workers lower than the hourly rates required for their occupations and failed to provide the required health benefits, sick leave pay, holiday pay, and vacation pay.

Investigators also found that Tunista Services violated the overtime provisions of the Contract Work Hours and Safety Standards Act when it based its overtime calculations on the lower, incorrect wage rate and failed to pay the full overtime due.

The $156,837 recovery includes $84,995 for paying incorrect occupational wages, $56,596 for underpayment of fringe benefits, $14,791 reimbursement for unpaid sick leave, and $455 in overtime pay for the affected workers.

Managers not paid OT.Kellwell Food Management Inc. has paid $130,879 in back wages and liquidated damages for 68 workers after a WHD investigation found that the Beattyville-based food services contractor violated the FLSA when it failed to pay full wages by incorrectly applying overtime rules for managers. Investigators determined that the employer failed to pay managers the minimum salary required, $684 per week, to waive overtime pay requirements. Kellwell Food Management provides food, laundry services and commissary services at correctional facilities in Alabama, Georgia, Illinois, Indiana, Kentucky, Mississippi, South Carolina. and Tennessee.

Child labor violations.The WHD has assessed$12,478 in civil penalties for FLSA child labor violations against Brito Enterprises of Tampa, dba Chick-Fil-A Tampa Stadium, after investigators found that the employer permitted 17 workers, ages 14- and 15-years-old, to work past 7 p.m. or more than three hours during a school day between Labor Day and June 1.