DOL crackdown not so easy in the Big EasyNews added by Benefits Pro on March 25, 2014

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By Dan Cook

A New Orleans cleaning company that tried to run employees through a third party as contractors has been brought to heel by the U.S. Department of Labor.

Empire Janitorial Sales and Services Inc. paid out $277,565 to 233 workers after the DOL's Wage and Hour Division found that the employees were indeed employees of Empire and not independent contractors. The assessment was for overtime hours not paid to the workers.

Empire's scheme involved “contracting” with a payroll firm for the employees. But, said the DOL, the payroll firm didn't keep proper records and never established a seven-day workweek for its “employees.” In fact, DOL ruled, because of the nature of the arrangement Empire had with its workers, they were Empire employees and should have been paid overtime rather than straight hourly rates for all hours worked.

Both companies signed a consent agreement with the DOL promising to comply with all Fair Labor Standards Act regulations. Empire paid the entire assessment.

“Misclassified workers are often denied access to basic benefits and protections under the FLSA, such as the Family and Medical Leave Act, overtime, minimum wage and unemployment insurance, to which they are entitled,” said Cynthia Watson, the Wage and Hour Division’s regional administrator for the Southwest.

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