USPack Logistics LLC, a last-mile delivery service based in Orlando, Florida, will pay $575,000 in back wages and liquidated damages for allegedly misclassifying 62 drivers at its Shrewsbury, Massachusetts, location as independent contractors under a consent judgment obtained by the US Department of Labor.

The consent judgment follows a lawsuit filed by the department in January 2020 against USPack Logistics and its chief operating officer, Frank Powell, after an investigation by the department’s Wage and Hour Division of pay practices at the Shrewsbury location.

The department alleged that the company and Powell paid courier drivers per delivery rather than an hourly wage, required drivers to pay for gasoline and vehicle upkeep and deducted various fees and insurance costs from drivers’ pay. These practices allegedly resulted in the company and Powell paying drivers less than the federal minimum wage of $7.25 per hour.

USPack Logistics and Powell also allegedly violated the FLSA’s overtime requirements when they failed to compensate drivers at one and one-half times their regular pay rates for hours over 40 in a workweek. The department also alleged the employers did not maintain accurate records of the hours worked by the affected employees.

In the consent judgment, entered by the US District Court for the District of Massachusetts, the company and Powell agree that they understand the FLSA’s requirements and will continue to make reasonable, good faith efforts to comply with its applicable provisions at all USPack locations. These efforts include ongoing reviews of the FLSA and the company’s practices to ensure that courier drivers are properly classified under the FLSA.

“Misclassifying employees as independent contractors can deprive them of the rights and protections guaranteed them in the Fair Labor Standards Act,” said New England Regional Solicitor of Labor Maia Fisher, also in Boston. “The US Department of Labor takes very seriously the issue of misclassification because it can function to exclude employees from the scope of the law’s protections.”