[US] Department of Labor recovers $166k back wages for misclassified workers

[US] Department of Labor recovers $166k back wages for misclassified workers
13 Jul 2022

In the US, a federal investigation has recovered $166,435 in back wages for 106 workers of a Houston company that misclassified them as independent contractors, depriving the workers of their full benefits and wages, including overtime, U.S. Department of Labor reports.

Investigators from the U.S. Department of Labor’s Wage and Hour Division found Majestic Dealership Services Inc. - whose workers reportedly detail, valet and wash cars at area dealerships - misclassified their workers as independent contractors, and paid them straight time for all hours worked. By doing so, the employer failed to pay overtime for hours over 40 in a workweek. Investigators also determined that the employer did not maintain accurate records as the Fair Labor Standards Act requires.

“Misclassification of workers as independent contractors is an all-too-common violation among employers in Houston and around the nation,” Houston Wage and Hour District Director Robin Mallett said. 

“Employers who misclassify workers deny them their full wages, benefits and legal rights; avoid payments of payroll taxes which cheats all taxpayers; and gain an unfair and illegal competitive advantage over employers whose pay practices abide by the law.”

Further information about the Wage and Hour Division is available, including a search tool for those who think they may be owed back wages collected by the division. The division protects workers regardless of immigration status and can communicate with workers in more than 200 languages.


Source: Department of Labor

(Links and quotes via original reporting)

In the US, a federal investigation has recovered $166,435 in back wages for 106 workers of a Houston company that misclassified them as independent contractors, depriving the workers of their full benefits and wages, including overtime, U.S. Department of Labor reports.

Investigators from the U.S. Department of Labor’s Wage and Hour Division found Majestic Dealership Services Inc. - whose workers reportedly detail, valet and wash cars at area dealerships - misclassified their workers as independent contractors, and paid them straight time for all hours worked. By doing so, the employer failed to pay overtime for hours over 40 in a workweek. Investigators also determined that the employer did not maintain accurate records as the Fair Labor Standards Act requires.

“Misclassification of workers as independent contractors is an all-too-common violation among employers in Houston and around the nation,” Houston Wage and Hour District Director Robin Mallett said. 

“Employers who misclassify workers deny them their full wages, benefits and legal rights; avoid payments of payroll taxes which cheats all taxpayers; and gain an unfair and illegal competitive advantage over employers whose pay practices abide by the law.”

Further information about the Wage and Hour Division is available, including a search tool for those who think they may be owed back wages collected by the division. The division protects workers regardless of immigration status and can communicate with workers in more than 200 languages.


Source: Department of Labor

(Links and quotes via original reporting)