The United States Department of Labor reports a consent order to resolve allegations that a Detroit-area transport company had misclassified drivers.
DETROIT – Timothy Schultz, sole owner of a now defunct Detroit-area transport company, will pay $273,819 – representing $252,416 in overtime back wages and $21,403 in interest – to 326 former drivers to resolve a U.S. Department of Labor lawsuit prompted by a federal investigation that found Schultz and his company ProCorp LLC, misclassified drivers as independent contractors and failed to pay overtime, in violation of the Fair Labor Standards Act.
In a consent order entered by the U.S. District Court in the Eastern District of Michigan, on March 3, Schultz agreed to make restitution over a five-year period. Schultz, former ProCorp operations manager Nichole Rode and two of Schultz’s current companies – Downriver Staffing Group LLC and Navicorp LLC – also agreed to future FLSA compliance including classifying drivers as employees instead of independent contractors. ProCorp was a Taylor-based company that employed drivers to shuttle newly manufactured cars around metro-Detroit lots for storage and to rail yards for shipment outside of Detroit. Downriver Staffing Group is in the same business as ProCorp; Navicorp is a staffing agency that supplies staffing to manufacturing operations in metro Detroit.
“The U.S. Department of Labor will hold employers who violate federal wage laws accountable and take all necessary steps to recover back wages due to employees,” said Wage and Hour Division District Director Timolin Mitchell in Detroit. “Very specific conditions must be met to classify an employee as an independent contractor and, ultimately, employers are responsible for knowing the law and paying workers all of their legally earned wages. Misclassification of employees as independent contractors is a top priority for the division, and we encourage all employers to contact us with questions about this practice.”
Investigators also found the employer failed to maintain complete time and pay records for several weeks during the investigative period. ProCorp ceased operations in October of 2019.
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. 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). Workers can call the Wage and Hour Division confidentially with questions – regardless of their immigration status – and the department can speak with callers in more than 200 languages.
Source: Court orders owner of defunct Detroit company to pay nearly $274K in back wages, interest to 326 drivers after US Department of Labor investigation | U.S. Department of Labor