DOL recovers $352,000 in back wages for misclassified Detroit-area employees

DEARBORN, Mich. – Federal wage investigators recovered $352,347 in overtime for 653 workers from a Dearborn recruiting agency that assigned them to manufacturing facilities and illegally classified them as independent contractors.

In doing so, the employer denied its employees overtime pay, a violation of the Fair Labor Standards Act.

Low-ranking employees are also denied other benefits, including unemployment insurance and workers’ compensation, and must bear the tax burden of the employer.

The U.S. Department of Labor‘s Wage and Hour Division discovered that Leo Staffing & Management LLC – doing business as LTL Staffing and Business Solutions – assigned most of the employees to positions as machine operators, welders and forklift operators at Challenge Manufacturing sites in Walker, Holland and Pontiac. While employees worked directly in the manufacturing plants, LTL Staffing maintained all employee records and processed their documents and payroll.

“Where there is an employment relationship between a worker and an employer, those workers are covered by the Fair Labor Standards Act. This means employees must be paid minimum wage and overtime, as required by the FLSA,” said acting district wage and hour director Angela Telang in Detroit. “Failing to recognize workers as employees deprives them of a wide range of valuable benefits and labor protections.”

“The misclassification of employees as independent contractors is a major concern for the U.S. Department of Labor, and violations associated with misclassification are too frequently seen by Wage and Hour Division investigators,” added Telang. “We can help employers and workers determine whether a worker should be classified as an independent contractor or an employee.”

Learn how to determine if a worker is an employee or an independent contractor.

Learn more about the Division of Wages and Hours, including a search tool to use if you think you might have back wages collected by the division and how to file a complaint online. Workers and employers can contact the division’s toll-free hotline for assistants at 866-4US-WAGE (487-9243), regardless of background.

Download the new agency timesheet app for Android and iOS devices to ensure hours and pay are accurate.

See the original version of DOL here. Republished with permission.

Agency: Wages and Hours Division

Date: September 23, 2022

Build Number: 22-1905-CHI

© Copyright 2022 United States Department of LaborNational Law Review, Volume XII, Number 269

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