A Washington State contractor will spend $550,000 to make good on wages allegedly shorted from hundreds of workers over several years.
Summit Drywall Inc., of Issaquah, and owner Thomas Kauzlarich violated federal overtime and record-keeping provisions involving 384 workers from Oct. 15, 2009, to April 15, 2013, the U.S. Department of Labor announced.
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2014-15 Edition
Summit Drywall and Kauzlarich will pay $275,000 in back wages and an equal amount in liquidated damages, according to authorities.
A consent judgment announced Feb. 20 resolves the violations found on an investigation launched last summer. Some workers will receive up to $4,000 in back wages and damages.
Employer: Not Intentional
In a statement, Kauzlarich said the company never "intentionally violated any employment laws."
"It is easy for a small business like ours to make mistakes and have not enough detailed records to satisfy a government auditor," he said. "The wage and hour laws are very complex."
The company, which started in 1997, said it has made changes to its timekeeping system based on the Labor Department's requests and went beyond in some regards.
"We are committed, as we have been, to complying with all legal requirements and treating all of our employees fairly," Kauzlarich added.
'Long Hours and Low Wages'
Janet Herold, DOL's regional solicitor in San Francisco, called the settlement a victory.
"In this region, long hours and low wages are prevalent in the drywall industry," Herold said.
"This consent decree sends the unambiguous message that the department will not permit the underpayment of workers' wages in piece-rate schemes, such as those at issue here."
Investigators in the Seattle District Office of DOL’s Wage and Hour Division found that Summit Drywall had failed to pay 384 current and former employees overtime at time and one-half their regular rates for all hours worked beyond 40 in a workweek, as required by the Fair Labor Standards Act, officials said.
Investigators also found that employees working as drywall hangers and tapers were paid on a piece-rate basis and were not compensated for all hours worked, including time spent traveling and transporting equipment to the job site. This resulted in additional violations of the law.
U.S. Department of Labor
Long hours and low wages are prevalent in the drywall industry, says Janet Herold, regional solicitor for the Wage and Hour Division's Western Region.
Last, the employer failed to keep accurate and complete records of hours worked, as required, officials said.
Penalties and Requirements
The judgment requires Summit Drywall and Kauzlarich to pay $275,000 in back wages and an equal amount in liquidated damages, according to authorities. Individual payouts will range from $150 to $4,000 per worker, officials said.
The consent judgment also requires several actions on the part of the employer.
If Summit Drywall chooses to use a piece-rate compensation system, the employer must calculate the piece earnings on an individual basis. Pay systems of this nature are based on a worker’s productivity.
Summit must also keep accurate records of hours worked and must document for employees their hours worked with each paycheck and the regular rate on which their weekly wage is calculated.
The employer must also provide training to all employees on the wage law's requirements.
Summit Drywall has also agreed to help promote awareness in the drywall industry of employers’ obligations under federal wage laws.
The company will writean article to appear in an industry publication that addresses drywall employers' obligations and code of conduct, the department said.
About the FLSA
The Fair Labor Standards Act requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour, as well as time-and-one-half for every hour over 40 they work in one week.
Employers must maintain accurate records of employees' wages, hours and other conditions of employment; and employers may not retaliate against employees who exercise their rights under the law.
Employers who violate the law are generally liable for back wages and an equal amount in liquidated damages, which are paid directly to the affected employees.