The United States Department of Labor announced a consent judgement recovering $575k for workers misclassified as independent contractors.
BOSTON – A courier service that allegedly misclassified drivers as independent contractors at its Shrewsbury location and denied them their rights under the Fair Labor Standards Act will pay a total of $575,000 in back wages and liquidated damages to the 62 drivers, and ensure future FLSA compliance at all its U.S. locations under a consent judgment the U.S. Department of Labor has obtained.
The consent judgment follows a lawsuit filed by the department in January 2020 against USPack Logistics LLC and its chief operating officer, Frank Powell, after an investigation by the department’s Wage and Hour Division of pay practices at the Shrewsbury location.
The department alleged in the case that the company and Powell paid courier drivers per delivery rather than an hourly wage, required drivers to pay for gasoline and vehicle upkeep and deducted various fees and insurance costs from drivers’ pay. These practices allegedly resulted in the company and Powell paying drivers less than the federal minimum wage of $7.25 per hour.
USPack Logistics LLC and Powell also allegedly violated the FLSA’s overtime requirements when they failed to compensate drivers at one and one-half times their regular pay rates for hours over 40 in a workweek. The department also alleged the employers did not maintain accurate records of the hours worked by the affected employees.
In the consent judgment, entered by the U.S. District Court for the District of Massachusetts, the company and Powell agree that they understand the FLSA’s requirements and will continue to make reasonable, good faith efforts to comply with its applicable provisions at all USPack locations. These efforts include ongoing reviews of the FLSA and the company’s practices to ensure that courier drivers are properly classified under the FLSA.
“Employers must properly classify their employees to ensure that those workers receive all the wages and protection to which they are legally entitled,” said Wage and Hour District Director Carlos Matos in Boston. “We encourage employers to take the time to understand the difference between employees and independent contractors under the Fair Labor Standards Act, and to contact the Wage and Hour Division with their questions.”
“Misclassifying employees as independent contractors can deprive them of the rights and protections guaranteed them in the Fair Labor Standards Act,” said New England Regional Solicitor of Labor Maia Fisher, also in Boston. “The U.S. Department of Labor takes very seriously the issue of misclassification because it can function to exclude employees from the scope of the law’s protections.”
The division’s Boston District Office conducted the investigation. The Boston Regional Office of the Solicitor litigated the case for the department.
Workers can call the Wage and Hour Division confidentially regardless of their immigration status and the department can speak with callers in more than 200 languages.
For more information about the FLSA and other laws enforced by the division, contact the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division.
Download the agency’s new Timesheet App, now available for android devices, to ensure hours and pay are accurate.
Read this news release En Español.