Julie Su Acting United States Secretary of Labor | Official Website
The U.S. Department of Labor has recovered $594,274 in back wages and damages from Teracom Inc., a Saline, Michigan-based employer, following an investigation by the Wage and Hour Division. The investigation revealed that Teracom Inc. misclassified 63 employees as independent contractors, paid them a day-rate regardless of overtime hours worked, failed to pay overtime, and denied two employees their final paychecks. Additionally, the company did not maintain complete and accurate timekeeping records as required by law.
These actions were found to be in violation of the Fair Labor Standards Act (FLSA). The division also noted that Teracom Inc. had committed similar violations in 2018, resulting in $44,496 in civil money penalties for repeated and willful FLSA violations.
The recovered amount includes $297,137 in back wages and an equal amount in liquidated damages for the affected employees.
"Employers who misclassify workers as independent contractors deny them their rights as employees to important overtime, benefits and protections," said Wage and Hour District Director Timolin Mitchell in Detroit. "Very specific conditions must be met for a worker to be classified as an independent contractor and if you fail to meet those tests, you are not an independent contractor. The wage recovery and damages right a wrong this employer knew they were committing as they did in 2018."
Teracom Inc., headquartered in Saline, is a construction company specializing in installing underground fiber optics for telephone and internet providers.
For more information on the definition of an independent contractor or details about the Wage and Hour Division's services—including tools to check if you may be owed back wages or how to file an online complaint—employees and employers can call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). The agency also offers a Timesheet App for iOS and Android devices to help ensure accurate tracking of hours worked.
