The United States Department of Labor that it recovered $229K for 809 workers misclassified as independent contractors.
NEW ORLEANS – A federal investigation into the bounced payroll checks of 10 construction workers renovating a nursing home in Panama City, Florida, found the employer who issued the bad checks had also denied more than 800 workers overtime wages by misclassifying them as independent contractors.
Investigators with the U.S. Department of Labor’s Wage and Hour Division initially found GM GS Restoration Technology LLC in Chalmette missed payroll by distributing bad checks to the affected workers and by doing so, violated the minimum wage provision of the Fair Labor Standards Act. They also determined the employer misclassified 146 construction workers as independent contractors and paid them straight time for overtime hours worked, leading to additional FLSA violations.
The division expanded the probe and learned that Minu Boaca, owner of GM GS Restoration Technology LLC, and his brother, Marian Bobi Boaca, operated two other construction businesses, Global Disaster Services LLC and MB JR Construction LLC, both located in Kenner. Both companies shared responsibilities and related activities, common business purpose, payroll and workers.
By law, the employer is considered one enterprise operating under separate entities. Investigations of the additional entities found the employer systemically denied overtime wages to another 653 construction workers by misclassifying them as independent contractors when, in fact, as employees they were owed the overtime premium for hours over 40 in a workweek.
The division’s investigation led to the recovery of $229,665 in minimum and overtime wages owed to a total of 809 workers.
“What began as an investigation of the errant payroll practices of one company led us to recover more than $229,000 for more than 800 workers of three entities,” said Wage and Hour District Director Troy Mouton in New Orleans. “The outcome of these cases demonstrates the Wage and Hour Division’s ongoing commitment to addressing employee misclassification and holding to account those employers who deny workers their full pay and benefits.”
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.
“While we continue to actively investigate suspected misclassification by employers that deny workers their full wages and benefits, those who violate the law are much more likely to struggle to retain and recruit the people they need to operate their businesses than employers who pay their employees all of their hard-earned wages,” Mouton added.
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: US Department of Labor investigation recovers $229K in missed payroll, overtime wages for 809 misclassified construction workers in New Orleans | U.S. Department of Labor