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Texas Pipe Company to Pay over $104K in Back Wages for Employee Misclassification

September 10, 2012

As Vincent Howard frequently reports in our Irvine, California employment attorneys blog, employee misclassification is a serious workplace issue, affecting employees, employers and the whole U.S. economy. When employees are misclassified as independent contractors, they are denied access to key protections and benefits, such as minimum wage, overtime payment, unemployment insurance, and family and medical leave.

According to the U.S. Department of Labor (DOL) the misclassification of employees also creates significant losses to the U.S. Treasury and the Medicare and Social Security funds, as well as to the workers' compensation funds and state unemployment insurance. Employers also suffer as a result of employee misclassification, as misclassifying workers creates an uneven playing field for employers who abide by federal law.

In a recent federal employee misclassification investigation that Vincent Howard has been following, the DOL's Wage and Hour Division (WHD) found a Texas-based pipe company responsible for violating the overtime provisions the Fair Labor Standards Act (FLSA) by failing to pay employees properly for all hours worked in a 40-hour work week.

The DOL investigation reportedly found that Pipe Coatings International LLC, (PCI) misclassified 55 former and current shop workers as independent contractors, instead as regular employees, during their first 90 working days with the company. PCI reportedly paid the workers with "straight time" compensation for all hours worked during this work period, instead of the FLSA-required overtime payment, which is one and one-half times their regular pay rates for any hours worked over forty in a week of work.

PCI has reportedly paid $104,760 to the misclassified employees and will stop the misclassification of new employees during the probationary period--by agreeing to classify all workers upon hiring.

The DOL continues to be committed to ensuring that employers properly classify their workers, and that these employees receive their legally entitled right to proper payment and employment benefits.

In Riverside, Irvine, or Santa Ana, California contact Howard Law's managing attorney Vincent Howard to discuss your wage and hour issue in the workplace today.

Pipe company in Beasley, Texas, pays more than $104,000 in overtime back wages following US Labor Department investigation, U.S. Department of Labor, August 23, 2012

Related Web Resources:

U.S. Department of Labor: Wage and Hour Division (WHD), Fair Labor Standards Act (FLSA)

Department of Labor (DOL): Wage and Hour Division (WHD)

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