From JDSupra, Richard J. Reibstein provides another excellent summary of activity in the June 2016 Independent Contractor Misclassification and Compliance News Update. Richard writes:
U.S. LABOR DEPARTMENT ASSESSES STAFFING COMPANY $173,000 FOR MISCLASSIFYING HOTEL EMPLOYEES. An investigation by U.S. Department of Labor’s Wage and Hour Division (WHD) has resulted in a $173,000 assessment against Allstars Staffing LLC, an Arizona-based staffing agency, for misclassifying as ICs 275 hotel employees, including servers, bussers, cooks, dishwashers, and banquet staff. The staffing agency will pay $75,683 in overtime back wages and an equal, additional amount in damages to the employees. In addition, the hotel will pay a $22,094 civil penalty for the misclassification. In a WHD News Brief issued June 2, 2016, Eric Murray, director of the Wage and Hour Division in Phoenix, stated: “Staffing agencies and their employer clients share responsibility to ensure that all employees working on their behalf are paid the wages they are entitled to by law. These violations are all too common in the hotel industry. Our agency will do everything in its power to end the willful misclassification of employees as independent contractors. This practice deprives workers of basic wage and employment rights and allows an employer to illegally spare the costs of full wages, payroll taxes and other employment related expenses. This cheats not just the workers and their families – it also the undercuts the competition.”
