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May
2015
21

DOL Hits Puerto Rican Government Contractor With $650K in Misclassification, Overtime Penalties

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A Puerto Rican firm that supplies security guards to businesses and government agencies violated the Fair Labor Standards Act (FLSA) when they failed to pay their workers overtime and misclassified them as independent contractors, according to the U.S. Department of Labor (DOL).  A U.S. District Court slapped Alpha Guards Management Inc. with a consent judgement which, among other penalties, could subject the company to further legal damages if violated.  The consent judgement orders the company to do the following:

• Pay 653 employees $173,847.86 in back wages, plus an equal amount in liquidated damages.
• Not threaten or act adversely against employees for accepting the back wages and damages.
• Not require the employees to pay or kickback any of the wages and damages to Alpha Guards.
• Post FLSA posters in the workplace where employees can see them and notify employees, in a language they understand, of the judgment, its terms and their rights under the FLSA. This must be done within 30 days of the judgment’s entry.

In a statement announcing the judgement, José R. Vazquez,  Division District Director for Puerto Rico and the U.S. Virgin Islands, said of the situation:

“This case shows employers and workers that the Wage and Hour Division will use all available tools to enforce the law, especially in an industry where violations are too frequent and common  The practice of misclassifying employees as independent contractors and avoiding payment of required overtime — common in this industry — must cease. This unlawful practice not only harms these workers and their families, but puts businesses who obey the law at a competitive disadvantage.”

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