A contractor located in Georgia, was found guilty of paying affected workers at straight-time rates for all hours worked and employing various illegal payment arrangements to evade paying overtime wages for hours exceeding 40 in a workweek. These workers were employed by seven subcontractors and were involved in renovation projects at two resorts.
Contractor Fails to Compensate 110 Workers for Overtime Hours
The Wage and Hour Division of the DOL confirmed that the contractor violated the Fair Labor Standards Act (FLSA) by failing to compensate workers for overtime hours. The contractor employed multiple pay schemes with subcontractors, resulting in artificially lower wage rates for the workers. Consequently, the DOL not only recovered $346,550 in back wages but also imposed $40,000 in civil money penalties on the contractor for its repeated and willful FLSA violations.
The recovered wages and damages ranged from $1,207 to $28,177 per worker. This incident serves as a grim reminder of the employer’s obligation to comply with legal standards for wage payments, especially regarding overtime pay for hours worked over 40 in a workweek.
Terence Trotter, Wage and Hour Division District Director in Honolulu stated, “Our investigation found a blatant and prolonged effort by the contractor and their subcontractors to deprive 110 construction workers of their hard-earned overtime wages.”
“Construction cost savings on resort renovation projects can’t be taken out of the workers’ pockets,” Trotter emphasized. “Overtime earned should be overtime paid.”
The Aftermath
The investigation also scrutinized the pay practices of six Georgia subcontractors and one contractor from Texas. The contractor specializes in hotel and resort renovation projects across multiple states.
In fiscal year 2022, the Wage and Hour Division made significant strides, recovering over $32.9 million in back wages for 17,127 construction industry workers. This investigation highlights the importance of adhering to employment laws, ensuring fair compensation for workers, and fostering a culture of compliance within the construction industry.
Conclusion
The case of the contractor serves as a stark reminder of the stringent penalties and legal repercussions businesses may face for violating employment laws, particularly in the construction industry. Employers must prioritize adherence to wage regulations and the fair treatment of their employees.
As a business owner, it’s essential to educate yourself and your team on labor laws, maintain accurate records, and promptly rectify any violations to protect your business and the rights of your workforce. A thorough understanding of employment laws not only avoids legal penalties but also promotes a just and respectful work environment.