A Glendale, Arizona plastering business has been ordered to pay more than $700,000 in back wages and damages to 470 employees. The order stems from a U.S. Department of Labor (DOL) investigation into the company’s piece-rate pay practices. It’s a case that demonstrates the lengths that many employers will go to in their efforts to deny their employees the pay they have rightfully earned. If your employer is refusing to pay you for your overtime work, our national network of attorneys is here to help.
What the Investigation Revealed
A review of the payroll records of Palo Verde Plastering revealed that instead of paying time and a half for hours worked over 40 during a week, which is required by federal law, it was paying straight time (the regular hourly pay rate). In addition, the plastering business was failing to keep accurate pay records as required by law.
The company evaded overtime laws by paying its employees a piece rate. Piece-rate pay is an alternative to hourly pay in which employees are compensated for each task performed. In this case, the employer paid its employees by the yard. Not only did the company refuse to pay its workers overtime, it repeatedly told them they were not entitled to overtime at all.
This behavior was bad enough. But Palo Verde persisted in its efforts to cheat workers. The Wage and Hour Division contends that while the company agreed to pay overtime in November 2021, it then continued to violate the law until at least March 2022. Even worse, it falsified its employment records by assigning wages earned to “phantom” employees. This was deliberately done to avoid paying workers overtime.
The Court Enters Its Judgment
On Jan. 19, 2023, the U.S. District Court for the District of Arizona entered a consent judgment in the matter. The court order requires Palo Verde to pay overtime back wages and liquidated damages totaling over $700,000 to 470 affected employees. The court also upheld $23,787 in civil money penalties assessed due to the company’s willful violations of the Fair Labor Standards Act (FLSA), the primary federal law concerning employee pay practices, overtime, and related matters.
The court order also requires the company to take the following actions:
- Change its payroll practices so they comply with federal recordkeeping rules
- Update its timekeeping system
- Hire a third party to train its supervisors, managers, and anyone else in the company with payroll duties so they understand federal requirements
- Immediately comply with the FLSA, amend its corporate handbook, and provide FLSA information to all employees
The Takeaway for Workers
Piece-rate and hourly workers need to understand that they are almost always not exempt from overtime laws – meaning their employers must pay them time and a half for all hours worked over 40 during the week. This is a basic requirement of the FLSA.
Unfortunately, employees in the construction industry are often taken advantage of and paid in ways that deny them overtime. Some other examples include:
- Averaging hours across more than one week, instead of paying overtime for 40 hours worked in a single week as required
- Intentionally misclassifying employees as “independent contractors”
- Not paying for so-called “off the clock” work, even though workers perform job duties during this time
- Automatic meal break deductions, even though employees work during their breaks
- Not paying for travel time between job sites
- Comp time pay, which means giving employees time off instead of overtime
- Paying a day rate, or daily rate, regardless of the number of hours worked
How Our Firm Can Help
If you work over 40 hours a week but are not being paid overtime, it’s in your best interests to reach out to The Lore Law Firm. In the case of Palo Verde, the amount of unpaid wages and damages that each affected employee will receive ranges from $42 to more than $7,000. Let us review your situation by completing our free, confidential client intake form today.
