Four Arizona contractors have been ordered to pay wages and damages totaling $3.2 million to 890 workers impacted by violations of federal overtime and minimum-wage provisions.
U.S. Department of Labor investigations determined that 4-E Painting LLC and Liberty Constructors LLC in Mesa and BCK Coatings Inc. and Geronimo Wall Systems LLC in Tempe all willfully and recklessly shortchanged their employees while violating overtime and minimum-wage provisions of the Fair Labor Standards Act.
“Our investigators have found that schemes to pay straight-time for all hours worked and avoid paying required overtime rates at time-and-one-half are pervasive among employers in Arizona’s construction industry,” said Eric Murray, Wage and Hour Division district director in Phoenix. “These unlawful practices create the false impression that piece-rate workers’ wages comply with the Fair Labor Standards Act when, in fact, these employees are being stripped of their earned wages.”
Following investigations into the four companies, the U.S. District Court for the District of Arizona ordered the contractors to pay the workers their share of the $3.2 million in back wages and liquidated damages.
In addition, the four companies were fined a combined total of $95,402 for the violations.
“More and more construction companies in Arizona are recognizing piece-rate workers’ right to overtime and are promptly resolving the department’s investigations when they are found to violate this right,” said Marc Pilotin, U.S. Department of Labor regional solicitor in San Francisco. "The Solicitor's Office will continue to obtain court judgments to recover back wages, liquidated damages, and penalties against employers who violate the FLSA. Companies can avoid these damages and penalties by paying correctly in the first place.”
Below are summary findings of the federal investigations:
- 4-E Painting LLC failed to pay overtime wages when the employer paid employees piece-rate wages for painting work or a combination of hourly wages and piece-rate wages. The company was found to own $432,633 in overtime wages and an equal amount in liquidated damages to 158 workers. A penalty of $24,732 also was assessed.
- Liberty Constructors LLC denied employees required overtime pay and attempted to conceal its violations by falsely showing a higher hourly rate or fewer hours worked on payroll records. A total of $401,049 in both unpaid wages and liquidated damages to 100 damages was recovered. In addition, Liberty Constructors was assessed $17,900 in civil penalties.
- Geronimo Wall Systems LLC reportedly denied overtime pay to 195 employees for any hours over a 40-hour work week. In addition, the company misclassified multiple employees as independent contractors. Under the Fair Labor Standards Act, employers are responsible for determining whether a worker is an employee under the law. Misclassification of workers as independent contractors results in the employees not receiving the minimum wage and overtime pay, they are entitled to. The federal court ordered Geronimo to pay $443,115 in overtime wages and damages to 195 employees. The company also was assessed a fine of $22,770.
- BCK Coatings Inc. also misclassified employees and failed to pay required overtime wages. The firm also made improper deductions of up to $20 per week from employees’ pay, required workers to cash their paychecks at a check-cashing business that charged a fee, and failed to pay one employee for eight weeks of work. BCK was found to owe $360,000 in unpaid minimum and overtime wages and an equal amount in liquidated damages to 437 employees. The department also assessed $30,000 in penalties for the company’s willful violations.
Workers who believe they may be owed wages by these construction employers are urged to call the Wage and Hour Division in Phoenix at 602-514-7100. For workers in other areas that believe the may be owned back wages, they are encouraged to reach out to their local U.S. Department of Labor office.
The Wage and Hour Division says it holds employers accountable so they do not obtain an unfair competitive advantage by denying workers their full wages. In fiscal year 2023, the division recovered more than $35 million in back wages for more than 17,000 construction industry workers nationwide.
