$2,622,585 in Wages, Liquidated Damages and Penalties to be Paid by Construction Company for Misclassifying Employees

 
Thursday, August 4, 2016
 

A Lunenburg construction company and a Framingham company it used to avoid its legal responsibilities as an employer have been ordered to pay a total of $2,359,685 in back wages and liquidated damages to 478 employees and take other corrective actions to prevent future violations of federal labor law. Under a consent judgment they will also pay $262,900 in civil money penalties due to the willful nature of their violations.

An investigation by the department’s Wage and Hour Division found that Force Corp., AB Construction Group Inc. and employers Juliano Fernandes and Anderson Dos Santos misclassified the bulk of their employees as independent contractors to avoid paying them overtime wages and other benefits to which they were entitled under the Fair Labor Standards Act. In addition, the defendants used a combination of payroll checks and cash/check payments to pay their employees straight time when overtime pay was required, and kept inadequate and inaccurate time and payroll records. 

Force Corp. is a year-round construction company operating in Massachusetts, Connecticut and Maine. The division’s investigation determined that the defendants created AB Construction to provide Force Corp. with much of its labor, and that Force Corp. prepared and controlled the payroll and payment procedures for both companies.

The department has now obtained a consent judgment in the U.S. District Court for the District of Massachusetts that orders the defendants to:

  • Pay a total of $2,359,685 – $1,179,842 in back wages and an equal amount in liquidated damages – to 478 employees.
  • Refrain from evading their responsibilities under the FLSA by misclassifying their employees as independent contractors
  • Make, keep and preserve accurate records of employees’ wages, work hours and working conditions, as required by the FLSA.
  • Engage one or more qualified independent consultants to create a payroll system or systems that will ensure that the defendants’ payroll and recordkeeping practices comply with the FLSA. The consultants will also review those practices quarterly and submit reports to the division detailing any problems and corrective actions.

The FLSA requires that covered, nonexempt workers be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus one and one-half times their regular wages for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records.

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