Construction worker in building

Bounced payroll checks are bad enough. Distributing worthless checks is a denial of a worker’s right to their wages and can easily land an employer in hot water. But for three related New Orleans construction companies, the payroll issue uncovered a much more widespread problem of misclassifying employees as independent contractors. This, in turn, led to significant liability for minimum wage and overtime violations.

The Lore Law Firm assists workers with a number of wage and labor law matters. Let us review your case today.

One Problem Leads to Another

Initially, GM GS Restoration Technology LLC, a construction business in Louisiana, was found to have missed payroll by giving bad checks to its workers. This is a violation of the minimum wage requirements of the Fair Labor Standards Act. Further investigation, however, revealed that the company misclassified nearly 150 construction workers as independent contractors. These misclassified workers were paid straight time (instead of time and a half) for overtime hours worked.

The investigation was then expanded and found that the owner of GM GS Restoration Technology LLC, along with his brother, operated two other construction companies. Both of these businesses shared responsibilities, payroll, and workers, and had a common business purpose. The three businesses were therefore treated as related.

These related companies were found to have systemic overtime law violations, stemming from the employer’s decision to misclassify its employees as independent contractors. Over 650 additional construction workers were paid straight time for hours over 40 during a work week, rather than time and a half as required by overtime laws.

All told, 809 workers were harmed by these three construction businesses. The result was $229,665 in minimum and overtime wages being recovered for those workers.

Misclassification Is a Serious Problem

Employers who improperly label their employees as “independent contractors” do so to evade the law’s requirement of minimum and overtime wages (plus other benefits). This is a major issue for a number of industries, especially construction. In 2021, the DOL recovered more than $36 million in back wages for over 21,000 construction workers.

The issue of employee versus independent contractor isn’t new. And every case of alleged misclassification must be evaluated on its individual facts. When a court considers whether an employer has misclassified an employee, it will generally take a look at such factors as:

  • Whether (and to what degree) the employer controls the work that is done
  • Whether (and to what degree) certain aspects of the worker’s job, such as the provision of tools and supplies, are controlled by the employer
  • The relationship between the employer and the worker, as evidenced by any contract, benefits, etc.

The Department of Labor works to enforce minimum wage and overtime laws, but the government cannot police every violation. This is where having your own private experienced legal counsel (working on a contingent fee basis) can benefit workers who have been wronged by their employers.

The Lore Law Firm Is Here To Serve You

It can be frustrating and stressful to not get paid the minimum wage and overtime you deserve. By the same token, you may feel uncertain or reluctant to speak up.  At The Lore Law Firm, we want you to understand your rights and to help you take the steps necessary to protect them. Our team is here to review your situation today. Fill out our free and confidential client intake form to get started.

Michael Lore is the founder of The Lore Law Firm. For over 25 years, his law practice and experience extend from representing individuals in all aspects of labor & employment law, with a concentration in class and collective actions seeking to recover unpaid back overtime wages, to matters involving executive severance negotiations, non-compete provisions and serious personal injury (work and non-work related). He has handled matters both in the state and federal courts nationwide as well as via related administrative agencies. If you have any questions about this article, you can contact Michael by using our chat functionality.