A concrete contractor based in Virginia has been ordered to pay $1.2 million in fines pertaining to back pay. This comes after the U.S. Department of Labor discovered that the company had incorrectly classified 29 employees as independent contractors, thereby avoiding the obligation to pay them overtime wages.
According to a news release from the Department of Labor (DOL), an investigation by the department's Wage and Hour Division revealed that Village Concrete Inc., located in Manassas, had misclassified its affected employees as independent contractors. This finding was supported by a consent judgment in the U.S. District Court for the Eastern District of Virginia in Alexandria. The misclassification allowed Village Concrete, which also serves residential and commercial customers in Maryland and the District of Columbia, to avoid paying required overtime rates for hourly, day-rate, and salaried workers.
Wage and Hour Administrator Jessica Looman elucidated on the implications of such misclassifications, stating, "Misclassification denies employees access to critical benefits and protections, such as overtime, minimum wage, family and medical leave and — in some cases — safe workplaces." She added that "The Wage and Hour Division will continue to make combatting misclassification a priority to protect some of the nation’s most vulnerable workers and their families from the harm it causes."
As per the news release, Village Concrete is now obligated to pay $563,938 in back wages along with an equal amount in liquidated damages to 81 employees. The consent judgment also prohibits Village Concrete from committing future violations of the Fair Labor Standards Act (FLSA) and imposes civil money penalties amounting to $67,473 that were assessed by the department for deliberate abuse of payment by the employer towards its employees. It was also found that Village Concrete allegedly falsified records to create an impression that they had paid workers overtime. They wrongfully categorized salaried employees as exempt from overtime and denied employee compensation for work-related travel distances.
Solicitor of Labor Seema Nanda addressed the issue, stating, "The solicitor’s office uses all available tools to address the serious workplace problem of misclassification." She added that "In this case, Village Concrete even tried to conceal its violations by falsifying records. We will use all legal tools available to us to hold employers accountable for deliberate and inexcusable attempts to obfuscate the facts, including civil monetary penalties."
