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US DOL Targets Gas Stations in New York, New Jersey

May 2nd, 2008 Posted by Amelia

The Northeast region of the U S Department of Labor is cracking down on gas station owners who don’t follow the federal minimum wage and overtime laws.

The Department of Labor Wage and Hour Division, Northeastern region includes Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia. Perhaps ironically, Puerto Rico and the Virgin Island are also part of the region.

In the most recent case, a New Jersey gas station owner was ordered to pay $29,458 in back wages to 6 employees, or just under $5,000 each.

Singh Brothers Petroleum failed to pay employees time-and-one-half when they worked over 40 hours in one week, according to the US Wage and Hour Division investigation. Instead, employees were paid straight time for all hours worked between January 2006 and January 2008.

The company also failed to maintain proper payroll records as required by law.

Singh Brothers Petroleum owns and operates a chain of 4 gas stations in Highland Lakes, New Jersey, as well as one station each in Vernon and Hewitt.

“We are working diligently to make sure that workers, especially those making low wages, receive the proper pay for all of the hours they work,” says Joe Petrecca, district director of the Wage and Hour Division’s Northern New Jersey District Office. “It’s important that employers know and understand the law so that they can be in compliance.”

After the Wage and Hour Division explained the law’s requirements, the company agreed to pay the affected employees and comply with the law in the future. This action was part of a 2008 enforcement initiative involving independent gas stations in Northern New Jersey, which in 2007 resulted in a total of $279,493 being found due to 195 employees.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $5.85 for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week. The minimum wage will increase to $6.55 per hour effective July 24, 2008, and to $7.25 per hour effective July 24, 2009. Under the law, employers must also maintain accurate time and payroll records.

In December 2007, the Labor Department’s Wage and Hour Division settled a suit with a chain of Long Island, New York gas stations. The owners agreed to pay more than $85,000 in back wages, plus a $10,000 penalty.

The Wage and Hour office in Westbury uncovered alleged violations of the FLSA, the federal Fair Labor Standards Act, which sets minimum wage and overtime laws across the nation.

The chain of 25 gas stations based in Bay Shore, New York agreed to pay 182 employees a total of $85,551 in back wages.

The feds maintain that low-paid employees were required to work more than 40 hours per week in many cases, without being properly compensated for overtime. In addition, the employer failed to keep accurate records of hours worked, as required by the FLSA.

The FLSA requires that covered employees be paid at least the federal minimum wage as well as one and one-half times their regular rates of pay for hours worked over 40 per week. The law also requires that accurate records of employees’ wages, hours and other conditions of employment be maintained, and prohibits employers from retaliating against employees who exercise their rights under the law.

The department’s suit was filed by the Labor Department’s Regional Solicitor’s Office in Manhattan in the U.S. District Court for the Eastern District of New York in Central Islip.

Steven Keshtgar, Frank Keshtgar and their 25 corporations and limited liability companies operating retail gas stations throughout Long Island were named as defendants.

A consent judgment has resulted in which the defendants neither admit nor deny violations of the FLSA, although they agreed to pay the $10,000 penalty. Nevertheless, they are prohibited from future violations of the law’s minimum wage, overtime and recordkeeping provisions. The court order, signed by Judge Leonard D. Wexler, also prohibits the defendants from taking retaliatory action against any employees who exercise their rights under the law.

The defendants are ordered to pay the $85,551 in back wages, which cover the period between May 12, 2005, and May 12, 2007. If the defendants fail to pay the back wages, the court will appoint a receiver with power to seize and liquidate the defendants’ assets to satisfy the payment order.

The case is officially known as Chao v. Bayside Development LLC et al; Civil Action Number: 07-CV-04470-LDW-AKT.

In addition, the defendants were ordered to pay to the Labor Department a civil money penalty of $10,000 after they have paid the back wages to employees. The defendants also are ordered to advise employees, in Spanish and English, of their rights, including engaging in protected activities without fear of retaliation.

Official posters must be placed where all employees may view them. Perhaps if the employers had displayed the posters – and followed them – they wouldn’t be facing these suits now.