Local Companies Pay for Underpaying Workers

Wage, hour and overtime lawyers at Pintas & Mullins Law Firm report that two companies, Hutco in Louisiana and Colony Diner in New York, were recently ordered to pay hefty fines for underpaying their employees. The Colony Diner investigation is the first implication of the state’s new Wage Theft Prevention Act.

The owners of Colony Diner in East Meadow, New York, recently pleaded guilty for underpaying and falsifying the records of 72 employees. The two owners face up to four years in prison, and have already agreed to pay more than $500,000 in a plea. The investigation was conducted by the U.S. Labor Department’s Westbury Office, which has had to investigate the Diner three separate times since 1999.

The agency found that Colony Diner habitually violated overtime and minimum wage laws, paying most of its employees off the books. Irv Miljoner, head of the Westbury Labor office, stated that this case will send a clear message to employers that paying workers under the table is wage theft and has real consequences.

Between September 2007 and September 2010, the Colony Diner wait staff at times earned less than the $2 per hour, and kitchen staff often did not earn overtime wages despite working substantially more than 40 hours per week. Federal labor laws require employers to pay workers time and a half their standard hourly wages when working any amount of time over 40 hours per week.

The investigation also found that the Diner falsified many of its records, including payroll and time records, which are felony counts. After obtaining a search warrant, the district attorney’s office found two sets of books, one with falsified payroll and time records, the other with true pay rate and hours worked.

The Louisiana company, Hutco Inc, also recently agreed to pay a large amount of money in back wages. The Lafayette-based company, which is a major industrial services agency, agreed to pay nearly $2 million in back wages to over 2,200 Louisiana employees. In another investigation conducted by the U.S. Department of Labor’s Wage and Hour Division, it was found that Hutco utilized improper pay and record-keeping practices, which resulted in failure to compensate for overtime.

Hutco provides short and long term employees to Louisiana businesses for both skilled and unskilled labor, such as electricians, welders, painters, and forklift operators. Temporary and contracted employment situations can make legal issues difficult for workers to understand, which gives greedy companies the leg-room to exploit them. Temporary workers are too often treated as non-employees in terms of overtime and wage protections. Contingent work arrangements, however, are still required to adhere to federal laws.

In the investigation, federal officials found systemic overtime violations in at least six of Hutco’s branches. The company mischaracterized certain payments as “per diem,” – meaning allowances paid to employees for lodging, meals and incidental expenses while traveling – and excluded these wages when calculating overtime wages. This impermissibly denied those employees overtime compensation that they had earned.

The terms of the settlement call for Hutco to pay the back wages and commit to future full compliance with the Fair Labor Standards Act. The settlement includes specific requirements to prevent any future violations, such as setting standards to accurately identify and compensate workers who qualify for actual per diem payments. Hutco will also be required to pay accurate overtime, ensure per diem payments will not be taken out of these, and inform employees about the details of their pay and employment conditions through written acknowledgements.

Wage, hour and overtime lawyers at Pintas & Mullins Law Firm encourage any employees who feel they are being unfairly treated or paid to contact a skilled attorney as soon as possible. Significant compensation may be available through an overtime violation lawsuit against your employer.

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