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California poultry processors will pay over $5M to resolve overtime, child labor allegations

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Dive Brief:

  • A group of California poultry processors and distributors will pay more than $5 million to settle U.S. Department of Labor allegations that they violated the Fair Labor Standards Act in a range of ways, including denial of overtime pay, falsification of payroll records, illegal employment of children and retaliation against employees for cooperating with federal investigators
  • Under the terms of the consent decree, the owners and operators of the group will pay more than $4.8 million in back wages and damages to 476 workers; $221,919 for illegal employment of minors and for minimum wage and other overtime violations; $141,194 for retaliation; and $1,000,000 in disgorgement of profits associated with the child labor “hot goods.”
  • “When we find an employer has put a child’s well-being at risk in return for profit, the Department of Labor will use all available tools to seek to remove children from harm’s way and prevent future violations,” DOL Solicitor Seema Nanda said in an agency press release. “The court’s disgorgement remedy recognizes that no employer should profit off the shipment of contraband and the backs of children.”

Dive Insight:

In addition to securing a consent decree, DOL obtained a permanent injunction to stop the poultry processors and distributors involved — which operate as a single enterprise, according to the DOL — from shipping goods or delivering them for shipment.

The FLSA allows DOL to seek and obtain such an injunction under its “hot goods” provisions, through which the agency can prevent the interstate shipment of goods produced in violation of minimum wage, overtime or child labor law, according to a DOL fact sheet.  

In court documents and in its news release, DOL detailed significant alleged thwarting of its investigation, which began in January. In a court order granting the agency’s request for a temporary restraining order, Judge Otis Wright II noted that the enterprise removed the “hot goods” from their facilities despite DOL’s objections, refused to disclose their location and provided “contradictory and incomplete explanations” of where they were.

Additionally, after the investigation began, DOL said, supervisors began retaliating against workers, “telling them ‘they put the noose around their own necks’ for talking to the department and calling them derogatory slurs,” among other actions. 

Among the enterprise’s child labor violations, DOL found they employed children as young as 14 to debone poultry using sharp knives. Employers are barred from allowing minors to do most jobs in meat production, including slaughtering, processing, rendering and packing.  

The DOL has increasingly pursued enforcement of child labor laws in the past few years, securing more than $8 million in civil penalties for such violations in 2023, nearly twice the amount secured in 2022. 

In addition to violations involving hazardous equipment, the agency has also focused on employers scheduling teens to work during impermissible hours. For example, a Sonic Drive-In franchisee in Nevada paid more than $70,000 last May after a DOL investigation found 14- and 15-year-olds working before 7 a.m. and after 7 p.m. during the school year, after 9 p.m. in the summer, and more than the allowable number of hours on both school days and nonschool days.

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