A national auto parts distributor and an Arizona logistics company that improperly categorized 1,398 drivers as independent contractors must pay them $5.6 million in back wages and liquidated penalties under a consent judgment in federal court.
The U.S. District Court for the District of Arizona ordered joint employers Parts Authority Arizona LLC and Arizona Logistics Inc. to pay impacted employees $2.8 million in back wages and an equivalent amount in liquidated damages, according to a news release issued Jan. 12.
“Employers cannot avoid their obligations to pay the minimum wage and overtime through contracting with another entity to obtain employees,” Solicitor of Labor Seema Nanda said, according to the release.
Diligent Delivery Systems, Parts Authority and its owner Larry Browne were forced to pay civil fines totaling $150,000, the release reported.
Nanda said the Labor Department will pursue employers who deprive employees of their rights under the Fair Labor Standards Act to combat misclassification schemes and wage theft, according to the release.
“We will continue to identify and address misclassification that not only hurts the workers who are deprived of their wages but also puts responsible employers at a competitive disadvantage,” Principal Deputy Wage and Hour Administrator Jessica Looman said, the release reported.
