Department of Labor finds errant pay practices hurt workers jointly employed
NEW ORLEANS – The U.S. Department of Labor has found that the wages of hundreds of painters and drywall workers employed by a Louisiana contractor on construction projects, including work at New Orleans’ Superdome, were tackled for a loss when their employer misclassified the workers as independent contractors, a common industry violation.
Investigators with the department’s Wage and Hour Division found that PLConstruction Services misclassified its workers as independent contractors. Many of the employees worked on projects involving Lanehart Commercial Painting – operating as Lanehart – including work at the Superdome. PL Construction Service paid the misclassified workers straight-time rates for all hours, including those over 40 in a workweek which violated the Fair Labor Standards Act’s overtime regulations. They also failed to maintain complete and accurate records of hours their employees worked, another FLSA violation.
The division determined that during the investigation period, a joint employment relationship existed between PL Construction Services and Lanehart for workers employed on Lanehart projects. Among other factors, they found the following conditions:
- PL Construction Services employees worked almost exclusively for Lanehart.
- At work sites, Lanehart supervised PL Construction Services’ workers, determined the number of workers needed and when, and kept records of hours PL Construction Services’ employees worked.
- PL workers’ labor was essential to Lanehart’s operations and occurred on Lanehart’s projects.
The investigation led to the recovery of $246,570 in overtime back wages for 306 employees. Lanehart paid $199,342 to 243 employees for which the division found them jointly liable. PL Construction Services paid the remaining balance of $47,228 to 76 employees.
PL Construction Services LLC is based in St. Rose, and Lanehart Inc. is based in Baton Rouge.
“Too often we find workers denied wage protections such as the right to overtime pay and other benefits – including unemployment insurance, workers’ compensation and health insurance – by employers who misclassify them as independent contractors,” said Wage and Hour District Director Troy Mouton in New Orleans. “Our investigation shows the costly consequences employers face when they or their subcontractors fail to comply with the law. When we determine a joint employment relationship exists, the Wage and Hour Division will hold all responsible employers accountable for the violations.”
In fiscal year 2021, the division recovered more than $36 million in back wages for more than 21,000 workers in the construction industry, which is typically among the top three industries where violations are found. In May 2022, the Bureau of Labor Statistics projects about 220,000 construction industry workers quit their jobs, the second highest total since 2012.
“This investigation is part of our continued effort to investigate suspected misclassification of employees and to protect workers’ rights to full pay and benefits,” Mouton added. “In today’s job market, workers have choices when it comes to the employers for whom they work. Employers who respect their workers and their rights to worker protections and benefits, including full pay for their hard-earned wages, will have a competitive advantage when it comes to retaining and recruiting the people they need to operate their businesses.”
For more information about laws enforced by the Wage and Hour Division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Calls can be answered confidentially in over 200 languages. Or, visit the division online for more information, including a search tool to use if you think you may be owed back wages collected by the division and guidance about the difference between an employee and an independent contractor. Help ensure hours worked and pay are accurate by downloading the department’s Android Timesheet App for free.
Learn how to dispel some of the pervasive myths about misclassification.
Source: Investigation recovers $246K in back wages for 306 painters, drywall workers denied overtime by misclassification as independent contractors | U.S. Department of Labor