labor lawAdivision of labor law center

Most Louisiana employers were affected on July 24, 2009 when the federal minimum wage increased from $6.55 to $7.25 per hour.

There is no Louisiana minimum wage. Louisiana is one of 5 US states that have no minimum wage. The others are Alabama, Mississippi, South Carolina and Tennessee. In these states, an employer who is not covered by the federal minimum wage law can legally pay just $1.00 per hour – if they can find an employee willing to work for that amount.

The federal minimum wage law is the FLSA or Fair Labor Standards Act, passed in 1938. The FLSA applies to businesses with annual revenue of $500,000 or more. It also applies to individual employees who are engaged in interstate commerce as a portion of their work duties. Examples of interstate commerce would be a retail clerk who accepts credit cards as payment, a secretary who uses the internet or email, or a switchboard operator who answers out-of-state phone calls.

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Two federal subcontractors must pay workers almost $1 million in back wages after a recent investigation by the U.S. Department of Labor’s Wage and Hour Division.

The two firms, with headquarters in Duncan, South Carolina and New Orleans, Louisiana, were subcontractors of CH2M Hill of Englewood, Colorado. L&R Security Inc. and HKA Enterprises Inc. have agreed to pay $941,537 in back pay to 382 current and former employees. The wages go to people employed as security guards and debris removal workers in the wake of Hurricane Katrina.

The investigation showed that both companies failed to pay overtime when employees worked more than 40 hours per week. Under the Fair Labor Standards Act or FLSA, employees must be paid 1.5 times their usual hourly rate when they work more than 40 hours in a single week.

The U.S. Department of Labor also found that the two companies violated the Davis Bacon Acts and the CWHSSA by failing to pay the prevailing wage and provide prevailing fringe benefits to workers, as required of federal contractors.

“The department has made a concerted effort to ensure that workers involved in Hurricane Katrina recovery and cleanup know their rights and are paid all the wages they are owed,” said U.S. Secretary of Labor Elaine L. Chao. “In this case, almost $1 million in back wages will be paid to nearly 400 workers.”

L&R Security, Inc. provided armed security guards at the Federal Emergency Management Agency trailer sites in New Orleans in the wake of Hurricane Katrina. The New Orleans-based company has agreed to pay $185,385 in back wages to 239 workers. In addition, the company will pay a penalty of $37,620 for repeat violations. According to sources, this is not the first time that the company has violated the federal minimum wage laws.

HKA Enterprises of Duncan, South Carolina provided staff to monitor the removal of debris in New Orleans under a FEMA contract held by CH2M Hill from early October to early December 2005. HKA Enterprises has agreed to  pay $756,152 in unpaid overtime to 143 workers.  HKA has 11 U.S. offices reaching from Michigan to Florida. The company’s website says that it provides technical, administrative, specialty craft and skilled labor resources on a contract basis.

A U.S. Department of Labor task force uncovered a number of wage abuses and violations in the wake of Hurricanes Katrina and Rita. The task force uncovered a number of violations, some from companies involving workers nationwide.

This is just the most recent in a series of minimum wage violations uncovered by the U.S. Department of Labor’s Wage and Hour Division.

In August, five jointly-operated restaurants in Long Island, New York were ordered to pay almost $1 million to 191 low-wage workers. The employees had been forced to work long hours for wages less than the minimum wage, without overtime pay.  The court ordered that if the employers did not pay up, their restaurants could be sold and the proceeds used to pay the employees.

In early July, the U.S. Department of Labor forced 107 subcontractors of KBR, Inc. of Virginia to pay some $1.5 million in back wages and benefits for up to 2,600 workers who participated in the Hurricane Katrina recovery project. The construction workers were involved in repairs to the Naval Construction Battalion Center in Gulfport Mississippi or the Naval Air Station/Joint Reserve Base in Belle Chasse, Louisiana. The U.S. Department of Labor is still searching for some of the workers involved in that case. Anyone who believes that they are owed back wages for these projects can contact the nearest U.S. Department of Labor office. The average payment per worker in that case was $616.

The U. S. Department of Labor Wage and Hour Division collected more than $171 in back wages for some 246,000 employees in 2006. Thos wages were a result of 31,987 “compliance actions” in 2006.

The U.S. Department of Labor’s Wage and Hour Division is attempting to locate a number of workers who participated in post-Katrina renovations or repairs in Louisiana and Mississippi. The workers are entitled to back pay from sub-contractors on the projects.  The projects involve work done at the Naval Construction Battalion Center in Gulfport or the Naval Air Station/Joint Reserve Base in Belle Chasse, Louisiana. Anyone who believes that they are owed back wages for these projects can contact the nearest U.S. Department of Labor office.

The U.S. Department of Labor’s Wage and Hour Division recently recovered nearly $1.6 million in back wages for workers in Mississippi and Louisiana due to violations of the Davis-Bacon Act and other federal regulations.  The funds will go directly to some 2,600 employees who were involved in the renovation and repair of U.S. naval bases at Gulfport, Mississippi and Belle Chasse, Louisiana in the wake of hurricane Katrina. The awards average about $616 per worker.

Although Mississippi and Louisiana are two of the five U.S. states with no minimum wage, most workers in these states are protected by the federal minimum wage laws.

“This administration is committed to ensuring that workers are paid all the wages they have earned,” said Secretary of Labor Elaine L. Chao. “We have recovered nearly $1.5 million for the workers who’ve been involved in the cleanup and restoration of these naval facilities in the aftermath of Hurricane Katrina damage.”

The workers were employed by 107 different subcontractors all hired by KBR Inc., a company based in Virginia. In every case, the work was performed under a federal contract. Under the terms of most federal contracts, all wages paid must conform to a number of federal standards including the Service Contract Act (SCA), the Contract Work Hours and Safety Standards Act (CWHSSA) and the Davis-Bacon Act (DBA). 

Both the SCA and the Davis-Bacon Act require that subcontractors pay the local prevailing wage rate and benefits on federal service and construction contracts. In addition, the CWHSSA sets standards for overtime pay for workers involved in federal contracts. The U.S. Department of Labor’s Wage and Hour Division found the 107 sub-contractors in violation of all these laws.

After an investigation, the Wage and Hour Division found that 107 different subcontractors involved in the projects had failed to pay required wages and fringe benefits. In some cases, the contractors also neglected to pay overtime when employees worked more than 40 hours per week. The agency determined that 2,623 workers at the Naval Construction Battalion Center in Gulfport and the Naval Air Station/Joint Reserve Base in Belle Chasse were due approximately $1,475,000 in back wages.

KBR Inc.  and many of its subcontractors cooperated with the Labor Department’s investigation to ensure that all employees who were due back wages were compensated. Of the total back wages, the subcontractors paid approximately $670,000 directly to the affected employees. The prime contractor, KBR, paid the balance of $800,000 to the U.S. Department of Labor for disbursement to the remaining workers.

Under a special taskforce created in 2006, the U.S. Department of Labor’s Wage and Hour Division has investigated and prosecuted a number of violations of federal minimum wage laws in the Gulf Coast. These violations occurred as contractors moved into the area to perform work after Hurricane Katrina and Hurricane Rita. The wide-ranging investigations have recovered wages for workers from Florida to Maine.

In one prominent case, a Houston-based tree trimming service was found to have violated federal law by not paying more than $1.8 million in overtime to 2,500 workers. The firm, which specializes in disaster clean-up near power lines, was found to have violated the law in 16 states, including Florida, Texas, Ohio, Arkansas, Maryland, Virginia, Maine, New York, New Jersey, South Carolina, North Carolina, Georgia, Arkansas, Tennessee, Mississippi and Louisiana.

That probe began after a tip from an employee led to the discovery that the firm was violating the minimum wage law in the 16 states. It was also violating the FLSA, or federal Fair Labor Standards Act. The settlement covered the period from August 2004 to August 2006.

A Department of Labor investigation recently found that a Houston company, ABC Professional Tree Services, had violated federal and Louisiana overtime laws. Due to these violations, the company now has to pay 2,501 employees overtime in the amount of $1.8 million.

The professional tree service specializes in clean-up following natural disasters. After a tip from a disgruntled employee, the Department of Labor began its investigation, which covered the time period from August, 2004 to August, 2006. During this investigation, the Department of Labor discovered that the company had violated minimum wage laws in several states, in addition to violating the federal Fair Labor Standards Act, also known as FLSA.

Elaine L. Chao, U.S. Secretary of Labor, explained, “We are pleased that we were able to help these workers get the back pay they deserve.” She added, “The department will continue our efforts to ensure that employers are paying workers properly.”

ABC Professional Tree Services cuts and trims trees and performs clean-up work near power lines for utility companies. It often does work following natural disasters, such as hurricanes. Some of the money owed to employees is for work they did following Hurricane Katrina.

Employees in the following states will receive back wages: Virginia, Louisiana, Arkansas, Louisiana, Georgia, New York, Ohio, New Jersey, North Carolina, Tennessee, Maryland, Maine, Florida, South Carolina, and Mississippi.

According to the Fair Labor Standards Act, workers cannot be paid less than $5.15 per hour, which is the minimum wage. This rate is paid for the first 40 hours of a work week. After that, employees should be paid overtime, which is time-and-one-half of their base hourly rate. In addition, employers are required by law to have accurate payroll and time records.

Along with U.S. Attorneys from several states, the U.S. Department of Labor has formed a task force that works to uncover and then prosecute employers in the Gulf Coast area of the country who violate federal labor laws. Specifically, this task force looks at areas impacted by hurricanes, including those areas hit by Hurricane Katrina and Hurricane Rita.

A settlement was recently announced between Wal-Mart and the US Department of Labor to address federal and Louisiana minimum wage law violations. This agreement will pay $33 million to almost 87,000 employees. These employees are located in Louisiana and across the nation.

This settlement addresses the main issue of how salaried interns, trainees, managers, and programmer trainees were paid by Wal-Mart. Although these employees were salaried, federal law states that they still may be entitled to overtime payments. According to the US Department of Labor, Wal-Mart employees who had to work long hours but were paid little money were actually “non-exempt salaried.” What this means is that these employees, although salaried, were still entitled to overtime compensation.

Federal and Louisiana minimum wage laws specify that not all employees who are salaried are exempt from overtime compensation. New guidelines established within the last few years specify that if an employee is paid less than $455 each week, they should be paid overtime if they work in excess of 40 hour a week. Salaried managers who earn more than this may still be entitled to overtime.  

This settlement concerned manager trainees. Many of these employees had little say in decision making but still had to work long hours. These employees were paid less than $23,600 a year, so they still were eligible for overtime.

Wal-Mart has encountered problems with their payroll system before. Private litigation isn’t impacted by this agreement, since it only addresses those violations that were outlined in the judgment.

Other companies have tried not paying overtime before. Over 20 years ago, Howard Johnson’s tried a similar approach, but was unsuccessful. In a similar situation to Wal-Mart’s, Howard Johnson’s employed “assistant managers.” These employees worked in the company’s restaurants, sometimes putting in more than 80 hours a week without much pay. Like Wal-Mart, Howard Johnson’s was found guilty.