labor lawAdivision of labor law center

A Las Vegas construction company was forced to pay back wages amounting to nearly $1.2 million to workers following an investigation by the Wage and Hour Division of the U.S. Department of Labor.

Investigators revealed the fact that lathers, finishers, plasterers and estimators who worked up to 58 hours per week were not paid overtime by the company. Under the federal Fair Labor Standards Act, employees who work more than 40 hours per week must be paid 1.5 times their usual hourly rate.

Desert Plastering, owned by two Las Vegas brothers, was ordered to pay 1,060 construction workers a total of $1,147,921 in unpaid overtime wages for work between April 2005 and March 2007.

The company was founded in 1998, and the two owners tout their “more than 35 years” of combined experience in installing and repairing lathe and stucco. The company website extols the high-quality work delivered by “a wonderful group of team players and highly qualified personnel.” Apparently Desert Plastering defined being a team player  as “being willing to work overtime without pay,” at least for a thousand of its employees.   

According to sources in Las Vegas, the company worked with a number of developers on the construction of new homes in several subdivisions.

The violations of federal and state overtime law were severe enough that Secretary of Labor Elaine Chao weighed in on the issue. In a news conference, Chao said, “Employers have a fundamental obligation to pay workers all the wages they have earned and they can count on hearing from this department when they fail to do so.”

Secretary of Labor Chao added,” In this case, we are recovering nearly $1.2 million dollars for more than 1,000 workers and the employer is on notice to properly compensate workers in the future.”

In addition, the investigation revealed that Desert Plastering failed to keep accurate records of the time employees actually worked. This, too, is a violation of the Fair Labor Standards Act.

There are speculations that in this case, the company tried to pay some employees a flat salary, rather than paying them for overtime. Under federal law, salaried employees may qualify for overtime, depending upon their job duties. In general, an employee must have significant administrative duties, authority to make business decisions, or must supervise 3 or more employees, to qualify as “salary-exempt.” That designation means the employee is not entitled to overtime pay, regardless of the number of hours worked. These employees were found to be “salaried non-exempt” meaning although they were paid a weekly salary, they were still entitled to overtime compensation.

In other cases, employers including those in the construction industry have attempted to miss-classify workers as “independent contractors” to avoid paying overtime. Because the company controlled how, when or where work was performed, the “independent contractor” designation doesn’t apply.

This action is part of the U.S. Department of Labor’s continuing battle against employers who violate federal minimum wage and overtime laws. Just days ago, the Department of Labor forced a Connecticut healthcare firm, Stonington Behavioral Health, Inc. and its parent corporations to pay more than $1 million in overtime to 143 employees of the Stonington Institute, a residential rehab clinic.

Earlier in the month, 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.

Earlier this year, under a voluntary agreement to prevent a federal suit, Wal-Mart, Inc. agreed to pay $33 million in unpaid overtime wages to 86,680 employees throughout the nation. An internal audit revealed that the company had incorrectly classified some employees as “salary-exempt” when in fact they were entitled to overtime pay. In other cases, the company admitted that it had based overtime pay on the employee’s base hourly rate, not including incentives and bonuses in the employee’s average rate as required by law.