A California trucking company faces action by the U.S. Department of Labor (DOL) to recover some $1.4 million in back wages for 80 current and former employees. In addition, the complaint seeks to bar the company and each of its owners from receiving government contracts for three years.
The action charges that Alan Berman Trucking of Woodland Hills, California is in violation of federal regulations that require federal contractors to pay “the prevailing wage and benefits” to their workers. The prevailing wage is a floating amount set in each geographic area, based on the average pay for similar work. The prevailing wage was established so that federal contractors didn’t underpay local workers.
Alan Berman Trucking has approximately $10 million in contracts with the U.S. Postal Service. During the time under investigation, the company provided hauling services for mail between the Los Angeles and San Francisco Bay areas.
“Federal contractors have a responsibility to pay workers in accordance with federal law,” said U.S. Secretary of Labor Elaine L. Chao.
The complaint requires the company to pay $1,369,870 to 80 truck drivers who are current or former employees.
Investigators with the DOL’s Wage and Hour Division found that the company violated the law on eight different contracts, by treating drivers as independent contractors. Drivers were required to use their own trucks and assume all costs. The company paid drivers by the mile or by the trip, but failed to pay fringe benefits as required by law. The company also made illegal deductions to the employee’s pay for fuel, and failed to reimburse the drivers for maintenance, and wear and tear to their trucks.
The company also failed to keep accurate records of the hours the drivers worked, as required by law.
Alan Berman trucking is a repeat offender. The DOL has investigatged the company nine times, and found violations in eight of those investigations. The suit specifically names the owner, Alan Berman of Woodland Hills California, as well as Vice President Osvaldo “Ozzie” Tarditti of Northridge, California, as defendants. The current suit covers violations between June 2004 and February 2007.
While this is the first prevailing wage violation in some time, it is by no means the first violation to federal wage laws.
In August, five jointly-operated restaurants in Long Island, New York were ordered to pay almost $1 million to 191 low-wage workers. The employees had been forced to work long hours for wages less than the minimum wage, without overtime pay. The court ordered that if the employers did not pay up, their restaurants could be sold and the proceeds used to pay the employees.
The Fair Labor Standard Act requires that most U.S. employees be paid at least the federal minimum wage, which is currently $5.85 per hour. The FLSA also mandates that employees must be paid 1.5 times their usual hourly rate for each hour over 40 in a single work week.
Many employers mistakenly believe that any worker paid by salary is exempt from overtime. The FLSA does provide a number of exemptions to the overtime law for bona fide executive, administrative, professional and outside sales jobs. In general, employees must meet job duty and salary tests, to be exempt from overtime.
The U. S. Department of Labor Wage and Hour Divison collected more than $171 in back wages for some 246,000 employees in 2006. Thos wages were a result of 31,987 “compliance actions” in 2006.
Earlier this year, under a voluntary agreement to prevent a federal suit, Wal-Mart, Inc. agreed to pay $33 million in unpaid overtime wages to 86,680 employees throughout the nation. An internal audit revealed that the company had incorrectly classified some employees as “salary-exempt” when in fact they were entitled to overtime pay. In other cases, the company admitted that it had based overtime pay on the employee’s base hourly rate, not including incentives and bonuses in the employee’s average rate as required by law.
