Parts Authority Arizona LLC, a Lake Success, New York-based national auto parts dealer, and Houston-based Arizona Logistics Inc. (operating as Diligent Delivery Systems) will pay $5.6 million in back wages and liquidated damages to 1,398 drivers after misclassifying them as independent contractors, the US Department of Labor reported Jan. 12.
The US District Court in Arizona ordered the joint employers to pay $2.8 million in back wages and an equal amount in liquidated damages to affected employees.
In addition, the consent judgment imposed $150,000 in civil money penalties on Parts Authority, Diligent Delivery Systems and its owner, Larry Browne.
The judgment, obtained on Nov. 17, also requires Parts Authority to treat their delivery drivers as employees.
“Parts Authority, Diligent Delivery Systems and Larry Browne misclassified nearly 1,400 delivery drivers as independent contractors, denying them of their rights to minimum wage, overtime pay and other benefits and protections,” Principal Deputy Wage and Hour Administrator Jessica Looman said. “We will continue to identify and address misclassification that not only hurts the workers who are deprived of their wages but also puts responsible employers at a competitive disadvantage.”