Posts Tagged ‘staffing agencies’

Snack Food Maker Hit With $2M Award for Minimum Wage and Overtime Violations

It’s the latest sign that the federal government is cracking down on employers and their staffing agencies for not complying with the minimum wage and overtime provisions of the Fair Labor Standards Act.

More than 600 temporary line workers at J&J Snack Foods Corp. will share more than $2.1 million in back wages and liquidated damages for the company’s minimum wage and overtime violations, the U.S. Department of Labor announced on October 27.

J&J’s products include baked goods under the Country Home Bakers, Mary B’s and SuperPretzel brand names, and frozen food products under the ICEE, Luigi’s, Slush Puppie, Minute Maid Juice Bars and WholeFruit labels. Its products are sold nationwide at stadiums and arenas; department, chain and convenience stores; discount and warehouse clubs; theme parks; movie theatres; schools and colleges; and retail supermarkets.

The department’s most recent investigation found 465 workers at J&J’s Swedesboro facility provided by staffing firm Sebastian and Sebastian LLC were paid straight time for overtime hours worked beyond 40 in a workweek, in violation of federal law. In response, J&J agreed to pay a total of $1,260,254 in back wages and liquidated damages to these workers.

Two hundred and twelve temporary workers  at the J&J facility in Chambersburg, Pennsylvania, will receive $920,000 in back wages and liquidated damages to make them whole for not being denied the federal minimum wage and overtime.

J&J and the staffing agencies were joint employers because “the economic realities show that [the workers] are economically dependent on — and thus employed by — another entity involved in the work,” the DOL said

More details on the case are available here.

Staffing Agencies to Fork Over $3.5M to Settle DOL Case Over Illegal Payment of Per Diems

Be careful if you’ve been labeling part of your employees’ wages as “per diem” expense reimbursements. The U.S. Department of Labor is on the hunt to end what it calls an “illegal and alarming trend of employers labeling part of employee wages as per diem payments, often to avoid overtime, payroll taxes and other costs.”

Yesterday the DOL announced that six staffing agencies in the Gulf Coast region had agreed to pay $3.5 million in back wages to more than 3,000 workers  it said were owed back wages. The workers were welders, electricians, pipe fitters, and other craftspeople on maritime vessels and other oil and gas industry projects.

“Companies break the law when they label part of a worker’s regular wages as per diem expense reimbursement instead of wages to lower labor costs, avoid paying overtime, and avoid making payments toward federal and state taxes, workers’ compensation, unemployment insurance and Social Security payments,” said DOL. “By attempting to reduce these obligations illegally with this scheme, these employers also gain an unfair advantage over their competitors.”

“Per diem pay is intended as a way for employers to reimburse workers for lodging, meals and other travel expenses incurred on behalf of their employer. Regular wages mislabeled as per diem cheat workers out of correct overtime wages. The payments may prevent workers from receiving full benefits in the event of a lay-off or workplace injury, and do not make full contributions toward a worker’s Social Security benefits.”

And for you employers out there, you could be liable as a joint employer with a staffing agency “if investigations find workers employed jointly by the staffing agency, and the business that contracted them, received illegal per diem payments.”

To read the DOL’s announcement, and learn the names of the six staffing agencies caught engaging in this illegal practice, click here.


DOJ: Staffing Agencies Broke Law By Requiring Naturalization Papers From Puerto Ricans

If we’re ever going to solve the problem of undocumented workers in this country, we’re all going to have to be on the page in knowing who already is a citizen or not.  According to the U.S. Justice Department, three Memphis-area staffing agencies didn’t know that Puerto Ricans are U.S. citizens. And that led to abuse of the requirements that all workers present documentation of their right to work in this country.

The DOL had alleged that Prestigious Placement; PFSWeb Inc.; and its subsidiary, Priority Fulfillment Services Inc., violated the Immigration and Nationality Act by rejecting two Puerto Rican applicant s’ valid birth certificates and instead demanding valid nationalization certificates.

But if the agency had done its homework,  it would know that Puerto Ricans are U.S. citizens by birth and don’t need naturalization papers.

As DOJ reminded,  “Under the anti-discrimination provision of the INA, employers cannot discriminate in hiring or place additional documentary burdens on workers during the employment eligibility verification process based on their citizenship or perceived citizenship.”

Wisely, the agencies decided to settle the case. Under the settlement agreement, the companies will compensate the charging parties for lost wages; pay civil penalties to the United States; undergo training on the anti-discrimination provision of the INA; revise their employment policies and training materials; and be subject to monitoring of their employment eligibility verification practices for two years.

Read moreabout the case.

And here’s more information on the immigration laws enforced by DOJ’s Office of Special Counsel.