Continuing its focus on independent contractor misclassification, the US Department of Labor’s Wage and Hour Division announced this week and last several companies that are being required to pay hundreds of thousands in back pay for IC misclassification and overtime violations.
The US District Court in Nevada ordered Las Vegas-based telemarketing company Intelliconnect to pay $280,000 in minimum wage and overtime back wages and an equal amount in liquidated damages to 398 employees for misclassifying its telemarketers as independent contractors from January 2010 through December 2012, which denied them minimum wage and overtime wages. Investigators found the employer paid the telemarketers based on a percentage of individual sales, resulting in many of them working for days and weeks for little or no pay, according to the department.
A Portland, Ore., businessman, David Emami, and three of his affiliated companies were ordered to pay 33 Portland-area employees $512,290 in unpaid wages and liquidated damages. Maintenance, landscaping and construction workers employed by Emami had two time cards. One time card recorded a morning start time and a midafternoon end time; employees would clock in later in the afternoon using the second time card, resulting in overtime hours being paid at a straight time rate. The time cards were issued by different companies, one from Emami’s Oak Grove Cinemas and another from Barrington Management or Barrington Ventures. Emami claimed employees were independent contractors during the hours they spent working for the Barrington companies. All hours were paid at straight time. The Wage and Hour Division also reported Emami violated anti-retaliation provision of the FLSA by threatening to retaliate against employees for cooperating with the department’s investigation.
Jointly owned, Texas-based firms Specialty Painting & Wall Covering Inc. and M&S Enterprise paid 22 painters and sheetrock installers $108,783 in overtime back wages, the Wage and Hour Division announced Thursday. An investigation found violations of the FLSA overtime and record-keeping provisions and that M&S misclassified workers as independent contractors.
The government’s focus on misclassification are set to continue, with the US DOL’s Wage and Hour division highlighting the issue in its budget justification report sent to Congress. In the 32-page report, the WHD notes the employment relationship between workers and businesses “has fissured apart as companies have contracted out or otherwise shed activities to be performed by other businesses,” and states it “will continue refining and strengthening its strategies in priority industries with an emphasis on detecting the various forms of misclassification found among those fissured business models.”