$1,660,438 in Back Wages for FLSA Violations Against Temporary Workers

 
Friday, July 11, 2014
 

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.

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.

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.

The FLSA requires that covered employees be paid at least the national minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records.

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