A Louisville, Ky., employment service must pay $538,076 in back wages and damages for violating overtime and record-keeping requirements of the Fair Labor Standards Act, the Department of Labor (DOL) announced April 4.
TechFlye LLC, a staffing agency contracted by VT Mobile Aerospace to provide aviation maintenance and repair workers to airlines nationwide, illegally reduced the overtime rates it paid and identified part of the wages as per diems to conceal the actual pay rates, the DOL reports in the announcement.
“This practice negatively impacts workers and makes it hard to retain specialized technicians doing vital work for our nation,” Kenneth Stripling, Wage and Hour Division (WHD) District Director in Birmingham said in the report. “In particular, in the event of workplace injury and lay-offs, per diem workers may not be protected. Retirement, health insurance, paid leave for illness or vacation may not be available for them either.”
WHD's investigation into TechFlyte resulted in fines of $269,038 for back wages and another $269,038 in liquidated damages, giving a total of $538,076 for the 129 workers who were not paid their legally earned wages, the DOL reports. TechFlyte was also fined $63,196 in civil penalties for the "willful nature" of the offenses, according to the report.
DOL reports this incident wasn't the first time the agency found TechFlyte guilty of the same violations of paying per diem wages in the company's office in Kansas City, Mo. A June 2020 WHD investigation resulted in 22 workers receiving $18,755 in back wages, according to the DOL.
“Using per diem pay practices to avoid or reduce overtime owed to employees is illegal,” , said in the report. “When per diem payments are applied to pay as a screen, it’s a scheme that defrauds workers and taxpayers, and hurts law-abiding companies."
