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Feb
2014
20

Illinois Contractor to Pay $400,000 in Back Wages Following Misclassification, Overtime Violations

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Following an investigation by the Department of Labor Wage and Hour Division, an Illinois contractor has been ordered to pay nearly $400,000 in back wages and liquidated damages to 96 workers.  Norwood Commercial Contractors Inc. of Bensenville misclassified 16 workers as independent contractors while failing to properly compensate 80 others in accordance with the Fair Labor Standards Act’s overtime and record keeping provisions.  

The investigation found that 80 of the employees were not properly paid premiums of time and a half for overtime hours.  Norwood Commercial Contractors also failed to pay for travel time to assignments.  The investigation found that in order to avoid paying overtime, the company pushed hours into future work weeks while simultaneously taking illegal deductions.  

Norwood Commercial Contractors and it’s President, Douglas Hudson, have signed a consent judgement to resolve the lawsuit in the U.S. District Court for the Northern District of Illinois. According to the DOL WHD, the agreement includes the following terms:

Under terms of the consent judgment, in addition to paying the back wages and damages found due, the company has also agreed to a variety of enhanced compliance provisions. The employer has agreed to designate a compliance officer to act as a liaison with the Wage and Hour Division, and to provide employees with specific Wage and Hour compliance information, including contact information for the division. The employer has also agreed to maintain accurate payroll records; to provide full access to payroll records during visits by the Wage and Hour Division; to give a minimum of two presentations on compliance with the FLSA to contractor’s associations; and to create online informational tools, including information on FLSA compliance, on the company’s website. The company will also create a compliance-related question-and-answer forum on its Facebook page.

DOL WHD has been fighting misclassification across the country as they hope to get workers off the hook for medical expenses and payroll taxes that are many employers’ responsibility.  Thomas Gauza, the division’s district director in Chicago, said in the statement:

“The misclassification of employees as independent contractors denies workers of wages and benefits they are entitled to under the law. It also leads to unfair competition because businesses that play by the rules operate at a disadvantage when compared with those that don’t.  We often find misclassification in the construction industry. This investigation should send a clear message to other employers to evaluate their pay practices and to ensure that they are in compliance with federal labor laws.”

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