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Drywall Workers to Get $550K Back Pay

Tuesday, February 25, 2014

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A Washington State drywall installer has agreed to pay $550,000 to resolve federal allegations of cheating nearly 400 employees out of wages over three and a half years.

The U.S. Department of Labor says Summit Drywall Inc., of Issaquah, and owner Thomas Kauzlarich violated the Fair Labor Standards Act’s overtime and record-keeping provisions from Oct. 15, 2009, to April 15, 2013.

drywall hangers
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.

The consent judgment announced Thursday (Feb. 20) resolves an investigation launched last summer. Some workers will recieve up to $4,000 in back wages. A copy of the judgment was not immediately available for review Monday.

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. The wage and hour laws are very complex," he said Monday.

The company, which started in 1997, said it has since 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.

A ‘Victory’

"This is a victory," Janet Herold, the department’s regional solicitor in San Francisco said in a statement.

"In this region, long hours and low wages are prevalent in the drywall industry. 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."

Investigation Details

During its investigation, the Seattle District Office of the department’s Wage and Hour Division found that Summit Drywall specifically failed to pay 384 current and former employees overtime at time and one-half their regular rates of pay for all hours worked beyond 40 in a workweek, as required by the FLSA, 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 FLSA's overtime requirements.

Janet Herold
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.

Judgment 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 specific action 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.

Further, the employer must maintain accurate records of hours worked and must provide its employees the documentation of 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 requirements of the FLSA.

Summit Drywall has also agreed to take steps to promote awareness in the drywall industry of employers’ obligations under the FLSA.

The company has agreed to write and submit an article to appear in an industry publication that addresses the obligations and code of conduct of drywall employers, the department said.

About the FLSA

The FLSA 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 their regular rates for every hour they work beyond 40 per week.

The law also requires employers to maintain accurate records of employees' wages, hours and other conditions of employment. The FLSA also prohibits employers from retaliating against employees who exercise their rights under the law.

The FLSA provides that employers who violate the law are generally liable to employees for their back wages and an equal amount in liquidated damages, which are paid directly to the affected employees.

More information:


Tagged categories: Business matters; Contractors; Drywall; Ethics; Good Technical Practice; Government; Labor

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