May 6, 2013 1:26 PM by MELISSA CANONE (PHOTO COURTESY: MGN ONLINE)
BROUSSARD, La. - Hutco Inc., a major industrial services employment agency, has agreed to pay $1,916,850 in back wages to 2,267 employees assigned to client work sites throughout Louisiana, Mississippi and Texas. An investigation conducted by the U.S. Department of Labor's Wage and Hour Division found that the company utilized improper pay and record-keeping practices that resulted in employees being denied overtime compensation in violation of the Fair Labor Standards Act.
"Employers cannot avoid their legal responsibility to pay overtime by using evasive practices that seek to undermine labor laws and deny workers their rightful wages," said acting Secretary of Labor Seth D. Harris. "As a result of our investigation, not only is nearly $2 million in unpaid wages going into the pockets of the workers who earned it, but today's agreement will also ensure the company's future compliance with the FLSA."
"Temporary employment arrangements can make the worker-employer relationship difficult for workers to understand," said Mary Beth Maxwell, acting deputy administrator of the Wage and Hour Division. "As a result, temporary workers face the risk of not being treated as employees in terms of the wages and legal protections guaranteed under federal law. The Wage and Hour Division is committed to protecting them, and continues to reach out to stakeholders and state agencies to help ensure that employers who utilize contingent work arrangements do so in compliance with all applicable laws."
An investigation of the company's headquarters in Lafayette disclosed systemic overtime violations throughout six branch establishments. Hutco mischaracterized certain wages as "per diem" payments and impermissibly excluded these wages when calculating overtime premiums, thus denying employees earned overtime compensation. This improper pay practice also resulted in FLSA record-keeping violations involving the accuracy of employees' wages and actual hours worked.
Under the settlement, in addition to paying back wages, Hutco has committed to future compliance with the law. The agreement includes specific measures the company will take to prevent future violations, including setting standards to accurately identify and compensate workers who qualify for bona fide per diem payments, paying accurate overtime and ensuring per diem payments are not automatically excluded from overtime calculations, informing employees about their pay and employment conditions, and obtaining written acknowledgment from employees that they understand the criteria for receipt of per diem payments.