EEOC Sues Crothall Services Group to Enforce Federal Record-Keeping Requirements

Nationwide Facilities Services Provider Fails to Maintain Records That Disclose Impact of Its Employee Selection Procedures, Federal Agency Charges

 

Crothall Services Group, Inc., a nationwide provider of janitorial and facilities management services based in Wayne, Pa., is in violation of federal law requiring it to maintain records or other information that will disclose the impact its employee selection procedures have on equal employment opportunities, U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit filed.

According to EEOC's complaint, Crothall conducts criminal background checks and criminal history assessments. Crothall uses its assessments of an applicant's criminal history to make hiring decisions. The company fails to make and keep required records, however, that will disclose the impact that its criminal history assessments have on persons identifiable by race, sex or ethnic group, the agency charged.

Crothall's failure to make and keep such records violates Title VII of the Civil Rights Act of 1964. Title VII protects individuals from discrimination in employment because of race, sex, national origin, color, or religion, including certain employment practices that have a disparate impact on employees in protected groups. Title VII, together with record-keeping requirements found in 29 CFR part 1607 of the Code of Federal Regulations, require employers to maintain records disclosing the impact their selection procedures have upon employment opportunities of persons identifiable by race, sex, or ethnic group. EEOC filed suit in U.S. District Court for the Eastern District of Pennsylvania (Equal Employment Opportunity Commission v. Crothall Services Group, Inc., Civil Action No. 2:15-cv-03812-AB). The agency is seeking injunctive relief requiring the company to comply with the federal record-keeping requirements.

"Federal record-keeping requirements ensure that certain employers make and keep records that disclose the impact of their selection procedures," said Regional Attorney Debra Lawrence of EEOC's Philadelphia District Office. "EEOC's enforcement of the record-keeping requirements is important to the agency's commitment to eliminating discriminatory barriers in the workplace."

Source: EEOC

This information is intended to be educational and should not be considered legal advice on any specific matter.

BabyVision Inc. willfully violates federal wage and hour law, obstructs investigators and threatens employees

Poughkeepsie, New York, employer must pay more than $121K to 49 workers

A Poughkeepsie-based maker and distributor of baby apparel and accessories denied 49 workers overtime pay and then attempted to thwart federal investigators by hiding workers and threatening them if they spoke to U.S. Department of Labor Wage and Hour Division agents.

A yearlong federal probe found that BabyVision Inc. and the company's owners, Shreenivas Shah and Malti Shah, paid employees — including some not on the company payroll — straight time in cash and denied them the required overtime rate of one and one-half times their regular hourly wage when they worked more than 40 hours in a workweek. The owners also improperly classified some employees as exempt from overtime. Additionally, the Shahs failed to maintain proper payroll records.

The Shah's actions violated the federal Fair Labor Standards Act. As a result, the agency determined that the workers are due $121,349 in overtime back wages and liquidated damages.

Early in the investigation, the Shahs told employees they were to hide from investigators or provide false information. Workers were threatened with termination if they cooperated with investigators. The department responded by obtaining a temporary restraining order to protect the workers and their rights, allowing the review of the company's employment practices to continue.

A consent judgment was also secured by the department that ordered the Shahs to pay the back wages and damages, take extensive corrective action to prevent future violations and pay $13,744.50 in civil money penalties, given the willful nature of their violations.

"Deliberately denying employees their earned income is illegal, and it makes it harder for workers to care for themselves and their families," said Sonia C. Rybak, the Wage and Hour Division's assistant district director in the White Plains Area Office. "We will use every enforcement tool at our disposal to ensure a fair and level playing field for employers and fair pay for employee work."

"This case shows our commitment to take all necessary legal steps, including using restraining orders, to protect workers and their rights," said Jeffrey S. Rogoff, the department's regional solicitor of labor in New York. "The judgment here does more than secure back wages. It commits BabyVision and the Shahs to a comprehensive compliance plan that includes corrective action and worker education to keep these violations from happening again."

The compliance plan requires the defendants to use a time clock or another automated timekeeping device to record all hours worked by their employees accurately; prohibits employees from working off-the-clock; record employees' work hours and break time correctly; prominently post an employees' rights notice and poster in Spanish and English; and provide all current workers and new hires with a copy of the consent judgment in Spanish and English.

BabyVision designs and distributes baby apparel and accessories to retail stores and on the Internet under brands such as Luvable Friends, Hudson Baby, Yoga Sprout and Nurtria. It operates a warehouse and offices at 30 Firemens Way in Poughkeepsie. The underpaid employees prepared customer orders, loaded and stocked items in the warehouse and maintained the company's website.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

Danica Group LLC underpaid workers, misclassified some as independent contractors

The U.S. Department of Labor has obtained a settlement by consent judgment that provides for the recovery of $1.42 million in back wages and liquidated damages for more than 300 current and former employees of four Long Island City plumbing and heating contractors. The related businesses are Danica Group LLC; Copper Plumbing & Heating LLC; Copper II Plumbing & Heating LLC; Copper III Plumbing & Heating LLC, and the owners are Thomas Andreadakis, Leonidas Andreadakis and Helen Andreadakis.

Investigations by the department's Wage and Hour Division found that the contractors violated the overtime and recordkeeping requirements of the Fair Labor Standards Act. Specifically, they paid employees straight time wages rather than time and one-half when employees worked beyond 40 hours in a workweek, and issued separate paychecks for the overtime hours from a petty cash account.

Additionally, they misclassified at least 25 employees as independent contractors, paying them a weekly salary that did not compensate the employees at time and one-half when employees worked beyond 40 hours in a workweek. The defendants also frequently paid many employees late, sometimes requiring workers to wait several weeks to be paid. Finally, they maintained incomplete and inaccurate payroll records.

"Hundreds of workers were denied their lawful pay when they were not paid promptly and correctly or were misclassified as independent contractors," said Dr. David Weil, administrator for the Wage and Hour Division. "The misclassification of employees as independent contractors deprives workers of wages and benefits they are entitled to under the law, thereby hurting our economy. It also leads to unfair competition because businesses that play by the rules operate at a disadvantage to those that don't."

Under the terms of a consent judgment entered with the U.S. District Court for the Eastern District of New York, the defendants will pay the workers $710,000 in back wages covering the time period between September 2010 and April 2014, and an equal amount in liquidated damages. The judgment also includes enhanced compliance provisions that will commit the defendants to taking effective steps to improve their payroll recordkeeping, ensure that employees are paid on time each week, reclassify as employees those who were previously misclassified as independent contractors and properly pay them.

"Underpaying and misclassifying employees as independent contractors are illegal and unacceptable actions. The Labor Department will pursue all available legal measures to ensure that workers are properly classified and compensated for their work," said Jeffrey Rogoff, regional Solicitor of Labor in New York. "If the defendants fail to adhere to the terms of the judgment, they could be subject to contempt sanctions by the Court."

The case was investigated by the Wage and Hour Division's New York City District Office and litigated by the Department's regional Office of the Solicitor in New York City.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

Oregon developer makes retaliatory threats against employees

A federal court has ordered local developer David Emami and three of his affiliated companies to pay 33 Portland-area employees $512,290 in unpaid wages and liquidated damages. The U.S. District Court for the District of Oregon agreed with a U.S. Department of Labor investigation that found that Emami and companies Oak Grove Cinemas Inc., Barrington Management LLC and Barrington Venture LLC willfully violated the overtime and record-keeping provisions of the Fair Labor Standards Act. The court also held that Emami violated the anti-retaliation protections of the FLSA by threatening employees who cooperated with the department’s investigation.

“Those who flagrantly disregard basic wage obligations and then try to cover up those actions should think twice before threatening workers when they simply exercise their right to be paid fairly, as the law requires,” said Janet Herold, the department’s regional solicitor in San Francisco. “This judgment makes clear that we will not allow employers to violate the law and then try to bully their way out of trouble.”

The department concluded that those Emami employed as general maintenance, landscaping and construction workers at commercial properties he owned or maintained had two time cards for most pay periods. On one time card, an employee recorded their morning start time and a midafternoon end time. The employees immediately clocked in on a second time card to record the remainder of a day’s work hours. The workers’ duties and rates of pay remained the same each day at each work location.

Workers typically received two paychecks each time they were paid—one from Emami’s Oak Grove Cinemas and another from Barrington Management or Barrington Venture. The employer claimed that the employees were independent contractors during the hours they spent working for the Barrington companies. The combined paychecks covered all of the employees’ hours, including those over 40 per week, paid at straight time. The department found, and the court agreed, that Emami’s “scheme” was deliberately concocted to avoid paying his employees overtime.

“This employer found out the hard way how serious we are about stopping an employer’s attempts to profit by willfully violating the wage laws and employment rights that protect the most vulnerable members of the workforce and level the playing field for other law-abiding employers,” said Ruben Rosalez, the Wage and Hour Division’s regional administrator in the West.

The court also found that Emami violated the anti-retaliation provision of the FLSA by threatening to retaliate against employees for cooperating with the department’s investigation or becoming a witness for the government. Threats of retaliation included intimidation and threats of physical force against cooperating employees.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

Data mining giant Westat to pay $1.5M to settle discrimination case

More than 3,600 African American, Asian American, Hispanic and female applicants to benefit

Federal contractor Westat Inc. has agreed to settle allegations that it failed to provide equal employment opportunities to 3,651 African American, Asian American, Hispanic and female job applicants at its Rockville headquarters and at field sites in California, Connecticut, Michigan, Mississippi, New York, North Carolina and Tennessee. The conciliation agreement entered into by Westat and the department's Office of Federal Contract Compliance Programs resolves these and numerous other violations, including a failure to maintain and internally audit its own records.

"For more than 50 years, Westat has effectively harnessed the power of data to produce ground-breaking research," said U.S. Secretary of Labor Thomas E. Perez. "That commitment to data integrity should also be applied to its employment practices so that every worker has a fair shot at getting a good job and company leadership understands exactly who is getting hired and why."

During a scheduled compliance review, OFCCP investigators discovered that Westat used a selection process that systematically discriminated against 2,153 African American, 825 Asian American and 35 Hispanic job applicants for research analyst, programmer analyst, telephone data collector and field data collector positions, as well as 638 female applicants for survey process staff positions, between Oct. 1, 2008, and Sept. 30, 2009. 
 
Under the terms of the settlement, Westat will pay a total of $1,500,000 in back wages and interest to 3,651 affected applicants and make 113 job offers to the original class members as positions become available. The company has also agreed to preserve and maintain all employment records, correct record-keeping violations, conduct internal audits, and perform outreach and positive recruitment activities. These efforts are integral to compliance with Executive Order 11246, which prohibits federal contractors from discriminating in employment on the basis of race, color, religion, sex or national origin.

Westat is one of the leading research and statistical survey organizations in the United States. Over the past six years, the company has held more than $2.8 billion in federal contracts with agencies including the U.S. Departments of Agriculture, Commerce, Defense, Education, Energy, Labor, Health and Human Services, Transportation, Treasury and Veterans Affairs.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

Ongoing Initiative Reveals Evasive Pay Practices in the Temporary Staffing Industry

B & D Contracting Inc., a labor recruiting and staffing agency that caters to oil field services and maritime fabrication facilities along the Gulf Coast, has agreed to pay $1,660,438 in back wages to 1,543 current and former employees. An investigation by the U.S. Department of Labor found that the company engaged in improper pay and record-keeping practices that resulted in employees being denied overtime compensation in violation of the Fair Labor Standards Act. The employees were assigned to client work sites throughout Louisiana, Mississippi and Alabama to work as welders, pipe fitters and shipfitters.

Investigators from the Wage and Hour Division's New Orleans District Office found the company mischaracterized certain wages as per diem payments and impermissibly excluded these wages when calculating overtime premiums, denying employees earned overtime compensation.

"Temporary staffing agencies serve valuable and legitimate business needs in today's economy," said Dr. David Weil, administrator for the Wage and Hour Division, "But employers may not manipulate these arrangements and use evasive pay practices to avoid paying workers their rightful wages."

"The labor violations we found in this case are not unique to B & D Contracting Inc.," said Cynthia Watson, regional administrator for the division in the Southwest. "We are increasingly finding the use of per diem schemes as a means of decreasing overtime pay and tax obligations in the staffing and support services industry in this region. The resolution of this case demonstrates our continued focus on combating such labor violations in order to improve compliance in this industry."

Following the investigation, B & D Contracting agreed to pay back wages owed to employees. The company also signed a settlement agreement with the department, committing itself to implement specific measures to prevent future FLSA violations. These measures include: setting standards to accurately identify and compensate workers who qualify for bona fide per diem payments; paying accurate overtime and ensuring per diem payments are not automatically excluded from overtime calculations; informing employees about their pay and employment conditions; and obtaining written acknowledgment from employees that they understand the criteria for receipt of per diem payments.

Additionally, B & D Contracting agreed to maintain accurate records demonstrating that employees received bona fide per diem payments and that such payments are based either on applicable Internal Revenue Service guidelines or upon a reasonable approximation of the expenses incurred.

Pursuant to the department's partnerships with the IRS and the Louisiana Workforce Commission, this case has also been referred to those agencies for review under their respective laws.

This investigation was conducted under the Wage and Hour Division's ongoing initiative focused on strengthening labor compliance among temporary labor providers, such as staffing and support services companies in the Gulf Coast region. The division's enforcement and compliance assistance efforts are focused on identifying and remedying labor violations involving temporary employment arrangements, and the agency is also working with stakeholders and state agencies to ensure compliance with all applicable laws. Between fiscal years 2011 and 2013, the division's New Orleans District Office conducted 24 investigations in the temporary help industry securing more than $2.5 million in back wages for more than 3,000 workers.

An employee's regular pay rate, upon which overtime must be computed, includes all wages for employment, except certain payments excluded by the FLSA, such as reimbursements for work-related expenses. Payments reasonably approximating travel or other expenses incurred on the employer's behalf may be excluded from the employee's regular rate of pay when computing overtime. However, where an employee receives such payments but actually incurs no such additional expenses, such payments do not constitute bona fide reimbursements and must be included in the employee's regular rate of pay for purposes of computing an overtime premium.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

Justiss Oil Co. Inc. pays nearly $620,000 in overtime back wages

Company failed to pay employees for mandatory meetings
   
Justiss Oil Co. Inc. has paid 270 current and former employees $619,830 in back wages after an investigation by the U.S. Department of Labor’s Wage and Hour Division found violations of the Fair Labor Standards Act’s overtime and record-keeping provisions. The investigation found that the company violated the FLSA when it did not pay its workers for the time spent at mandatory staff meetings and failed to record the time spent at these meetings.


The investigation, conducted by the division’s New Orleans District Office, revealed that Justiss Oil failed to pay workers for time spent attending mandatory safety and orientation meetings that occurred on drilling rigs and platforms at the beginning of each shift. The employer required the rig workers, who typically have a seven-day tour of duty, to come to the meetings 30 minutes before the start of their 12-hour shift. Because the employer failed to consider time spent at mandatory safety meetings as compensable, employees were not paid for all hours worked and did not receive all of the overtime pay to which they were entitled.


“Employers are responsible for ensuring their employees are paid for every compensable work hour,” said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. “We are pleased that, in this case, the employer has agreed to pay all employees and to abide by the law in the future.”


Justiss, established in 1946, is an oil field services company with about 408 employees. It is mainly a land-based drilling, exploration, production and well-servicing company. The company has paid all back wages in full and agreed to comply with all applicable FLSA provisions in the future.


The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 per hour. Workers who are not employed in agriculture and not otherwise exempt from overtime compensation are entitled to time and one-half their regular rates of pay for every hour they work beyond 40 per week. The law also requires employers to maintain accurate records of employees’ wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law.


Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

NY restaurants to pay more than $1.6 million in back wages and damages

Employers will pay $114,737 in penalties and interest for wage and record-keeping violations

The U.S. Department of Labor has obtained a series of consent judgments in the U.S. District Court for the Eastern District of New York ordering seven Long Island restaurants to pay a total of $1,693,507.22 to 363 low-wage workers, chiefly servers and kitchen employees. The restaurants will also pay $114,737.96 in civil money penalties and interest to the department for willful violations of the Fair Labor Standards Act.

“These wage recoveries, damages and fines serve as notice that the underpayment of employees is unacceptable. We will use all available tools to identify and root out such labor violations and make whole the affected workers,” said Irv Miljoner, director of the division’s Long Island office. “The violations found during these investigations are, unfortunately, all too common in this industry. We plan to continue our enforcement effort in the Asian restaurant sector and other types of restaurants where underpayment cheats both employers and workers who follow the law.”

Investigations by the Long Island District Office of the department’s Wage and Hour Division found widespread violations by the restaurants of the FLSA’s minimum wage, overtime and record-keeping requirements. Specifically, the employers engaged in unlawful activities, such as paying below the federal minimum wage; paying cash off-the-books; not paying overtime; illegal tip pools; failing to pay wages to certain employees; and not keeping records of hours worked and wages paid to employees.

The restaurants are Good Taste Buffet, Commack; Kumo Sushi & Steakhouse, Stony Brook; Crystal Garden, Ronkonkoma; Nishiki, Selden; Hotoke, Smithtown; Crystal Garden Buffet, Riverhead; and Kashi Sushi & Steakhouse, Rockville Centre. A chart listing each restaurant and its back wages, liquidated damages and civil money penalties follows this news release.

The investigations were conducted under the Wage and Hour Division’s multiyear enforcement initiative, focused on strengthening labor compliance in Long Island’s restaurant industry. In addition to identifying wage violations and recovering money for underpaid workers, the initiative’s goal is to change industry behavior permanently to ensure proper compensation for all workers and a level playing field for all employers. In fiscal year 2013, initiative cases conducted by the division’s Long Island office resulted in $6.4 million in back wages for more than 1,300 workers and reflected 71 consent judgments.

The cases were litigated by the department’s Regional Office of the Solicitor in New York City.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

DOL investigating wage violations at McAllen TX produce distributor

The U.S. Department of Labor has filed an action in the U.S. District Court in McAllen seeking a temporary restraining order and preliminary injunction to protect workers from retaliation and threats of retaliation from some ISPE Produce Inc. officials.
 
The department’s Wage and Hour Division is currently investigating ISPE Produce under the minimum wage, overtime, record-keeping and anti-retaliation provisions of the Fair Labor Standards Act.

“Employee intimidation and coercion will not be tolerated. Employers are prohibited from retaliating against any employee who files a complaint or cooperates in a Wage and Hour investigation,” said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. “We will leverage any resources necessary to ensure that a fair investigation is conducted and workers are protected.”

During the investigation, the employer required workers to leave the job site when Wage and Hour investigators arrived to conduct interviews. Company officials threatened workers with termination of employment and deportation for cooperating with the department. The temporary restraining order asks the court to enjoin the owner and two company officials from continuing threatening and retaliatory conduct aimed at employees who cooperate in the Wage and Hour investigation.

The department also seeks an order requiring the owner or a department employee to read aloud a statement to all employees informing them of their right to speak with Wage and Hour investigators without fear of retaliation; to post a copy of the statement at all ISPE Produce work sites; and to prohibit the owner and named officials from speaking directly to employees about the Wage and Hour investigation.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

 

Massachusetts cleaning contractor ordered to pay unpaid wages and damages to low-wage workers

Ward’s Cleaning Service Inc. and owner will also pay $163,900 in penalties

The U.S. Department of Labor has obtained a consent judgment in the U.S. District Court for the District of Massachusetts that orders Ward’s Cleaning Service Inc. and David Ward, owner/president, to pay $1,033,877 in unpaid wages and liquidated damages to 149 low-wage employees of the Peabody contract labor provider. The defendants, who provide night cleaning crews, housekeepers and dishwashers to about 85 hotels and restaurants in the Boston area, will also pay $163,900 in civil money penalties and make changes to their payroll system.

“Employers who willfully underpay their employees and falsify records harm not only the employees and their families, but the business community as well. The Wage and Hour Division is working to level the playing field for all law-abiding employers and will ferret out those employers who not only cheat their employees, but harm legitimate competitors by their illegal employment practices,” said Carlos Matos, director of the division’s Boston District Office. Investigators from the department’s Wage and Hour Division Boston District Office found that, from July 2009 through December 2012, the defendants violated the overtime and record-keeping requirements of the Fair Labor Standards Act. Specifically, they failed to pay overtime to the employees who worked more than 40 hours in a workweek, and they concealed nonpayment of overtime through practices, such as directing employees to use multiple timecards with different names, altering timecards, paying employees with checks made out to false names and paying employees in cash.

“These vulnerable employees were denied their rightfully earned wages through the use of sophisticated schemes to reduce or eliminate the company’s overtime obligations. This was not the first time; a 1993 Wage and Hour Division investigation of this company found similar violations, which led to workers receiving $172,000 in back wages then,” said Michael Felsen, the department’s Regional Solicitor of Labor for New England. “To prevent this from happening again, the judgment calls for payment to employees of back wages and an equal amount in liquidated damages, as well as significant penalties. It also requires Ward’s to develop and use a payroll system that complies with federal wage law, and that will be closely scrutinized.”

Under the terms of the judgment, the defendants will hire a qualified independent consultant with specific knowledge of the FLSA to create a payroll system that will ensure that their payroll and record-keeping practices comply with the law. They will submit quarterly reports to the Wage and Hour Division addressing all pay and record-keeping problems found and the actions taken to correct those problems. In addition, the judgment prohibits the defendants from committing future FLSA violations and forbids them from soliciting repayment of the wages and damages from any of the affected employees.

Legal support, including the filing of the complaint and consent judgment, was provided by attorney Susan Salzberg of the department’s New England Regional Office of the Solicitor.

Source: DOL
 

This information is intended to be educational and should not be considered legal advice on any specific matter.

US Labor Department files lawsuit against St. James Tearoom Inc. of Albuquerque, NM

Suit seeks to recover more than $300,000 in unpaid wages and damages for 42 employees

The U.S. Department of Labor has filed a lawsuit against St. James Tearoom Inc. and its owners, Mary Alice and Daniel Higbie, after an investigation by the Wage and Hour Division found that the defendants violated the Fair Labor Standards Act. The lawsuit seeks to recover unpaid minimum wages, overtime pay and liquidated damages totaling $304,000, as well as an injunction to permanently prohibit the defendants from committing future FLSA violations. The complaint was filed in the U.S. District Court, District of New Mexico.

“When employers fail to pay the required minimum and overtime wages, it negatively impacts not just the workers and their families, but also other businesses and the community. Underpaying workers gives this business an unfair competitive edge against employers who abide by the law,” said Cynthia Watson, regional administrator for the division in the Southwest. “This lawsuit demonstrates that the department is fully committed to using all enforcement tools at its disposal to ensure that workers are paid all wages due under the laws we enforce.”

Investigators from the division’s Albuquerque District Office found that St. James Tearoom required that its dishwashers and serving staff join a tip pool, resulting in minimum wage violations. The mandatory tip pool included salaried managers, shift leaders, dishwashers and other employees who are not eligible for tip pools, making the defendants’ entire tip pool arrangement invalid. Defendants also failed to pay the serving staff correct overtime wages, resulting in overtime violations. The defendants also failed to keep accurate records of hours worked by the employees, resulting in record-keeping violations.
 
Under the FLSA, the employer may consider tips as part of wages, but the employer must pay at least $2.13 per hour in direct wages. The employer who elects to use the tip credit provision must inform the employee in advance and must show that the employee receives at least the applicable minimum wage of $7.25 when direct wages and tip credit are combined. If an employee’s tips, combined with the employer’s direct wages of at least $2.13 an hour do not equal the minimum hourly wage, the employer must make up the difference. Employees must retain all their tips, except to the extent that they participate in a valid tip pool or sharing arrangement.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.