A Durham, North Carolina-based construction services contractor paid more than $1.6 million in back wages and liquidated damages to 188 workers after misclassifying them as independent contractors, the US Department of Labor announced Aug. 9.

An investigation by the department’s Wage and Hour Division found R&R Construction Maintenance failed to pay the workers their wages for overtime hours worked in accordance with the Fair Labor Standards Act. The company also misapplied the motor carrier overtime exemption for two employees and did not pay another employee for their last working day.

R&R Construction Maintenance provides garbage and debris removal services for construction sites.

“Misclassifying employees as independent contractors deprives workers of their full wages, benefits and employment protections and allows their employers to gain an unfair advantage over law-abiding competitors,” said Wage and Hour Division Regional Administrator Juan Coria in a press release. “The outcome of this case and the costly consequences that R&R Construction Maintenance suffered should serve as an example to other employers to make certain their employment practices comply with federal law.”

The recovery follows a default judgment against R&R Construction Maintenance that the department’s Office of the Solicitor obtained in the US District Court for the Eastern District of North Carolina in October 2022. The judgment required the company to pay $838,007 in back wages and an equal amount in liquidated damages to the affected employees.