Cleaning Company Ordered to Pay Damages for Worker Misclassification

A company that deliberately misclassified employees as independent contractors to avoid paying minimum wage and overtime recently was ordered to pay over $570,000 in damages for the misclassification. A federal court entered a default judgment against the Illinois maid and cleaning service company when the company failed to answer a Department of Labor (DOL) complaint that alleged violations of the minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act (FLSA The company was ordered to pay over $250,000 in back wages and overtime and an equal amount in damages. It was also ordered to pay over $70,000 in civil penalties due to the willful nature of the violations.

A spokesperson for the Wage and Hour Division of the DOL said, “It is unacceptable for any employer not to pay workers their rightfully earned wages or to classify workers as independent contractors to circumvent wage laws. The Labor Department is committed to seeing that these workers are compensated in accordance with the law."

WeComply’s online worker classification and FLSA courses train managers on real-world issues involving the differences between employees and independent contractors and between exempt and non-exempt employees.

Categories: Workplace Compliance
Tags: FLSA, Worker Classification