In addition to the federal Fair Labor Standards Act (FLSA), which provides definitions of things like overtime and the federal minimum wage, each state and city has its own labor laws to govern employers within their limits. There is also the federal Service Contract Act, which defines minimum wage limits for certain types of employees working on government contracts worth $2,500 or more.
Misclassifying employees in order to avoid paying them overtime is common enough among large employers looking to save a few bucks, but one contractor has been accused of allegedly deliberately misclassifying employees in order to avoid paying them a higher hourly wage.
In summer of 2011, the U.S. Department of Homeland Security granted to New Jersey’s Essex County a five-year contract for $130 million to run an immigrant detention center at Delaney Hall Center in Newark, New Jersey. The county subcontracted parts of the job to Education and Health Centers of America Inc., which also subcontracted portions of the job to Community Education Centers Inc. (CEC).
The Wage and Hour Division of the Department of Labor investigated the employment practices at the detention facility and determined that both CEC and Essex County had allegedly illegally misclassified 122 operations counselors who allegedly should have been classified as detention officers. The minimum wage for detention officers is $30.97 per hour, while the minimum for operations counselors is only $11.29 per hour. To make matters worse, the lower minimum wage the workers were paid was allegedly due to a collective bargaining agreement that had been invalidated by the National Labor Relations Board at the end of 2013.
The Labor Department further alleged the employees were shorted approximately $4 per hour in fringe benefits.
As a direct result of the findings of their investigation, the Department of Labor sued both CEC and Essex County for illegal employment practices. The parties have agreed to settle the dispute for $4.8 million, with $4.06 million going to cover the fringe benefits and back pay the employees were allegedly denied, and $740,000 going to cover overtime payments that were allegedly denied to 116 employees.
CEC and Essex County were not required to admit to having done anything wrong as part of the settlement. CEC insists it had no intention of misclassifying its workers, and that they are glad to have settled with the Department of Labor so they can all move past this legal dispute.
Meanwhile, the Department of Labor is likewise satisfied that it was able to continue doing its job in protecting workers whose employers might try to take advantage of them, either intentionally or unintentionally. Low-level workers in the lower and middle classes are the most at risk because they have the least amount of bargaining power with their employers. Worse than that, many workers aren’t aware of all the relevant federal and local laws protecting them, which means that, more often than not, they are totally unaware they are being cheated out of their hard-earned wages. All the more reason for the Department of Labor to investigate suspicious businesses and right wrongs as needed.
The Chicago class action and employment law attorneys at the Chicago Overtime Law Center have three decades of experience fighting to help employees who are victims of wage, overtime and tip theft by their employers. We have a team of Chicago unpaid overtime lawyers who concentrate on prosecuting state and nationwide class action lawsuits. Our attorneys work out of Chicago and Oak Brook offices and pursue claims for workers all over the Chicago area including Hoffman Estates and Schaumburg We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, Kendall, Lake, McHenry, Kane and Cook Counties.
Our Schaumburg and Elmhurst overtime and employment lawyers are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers mis-classify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.
The Chicago Overtime Law Center is based in Chicago and Oak Brook, and represents clients throughout the country who have unpaid overtime and other employment right claims.