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North Carolina construction company pays $1.6M following DOL misclassification lawsuit



Dive Brief:

  • R&R Construction Maintenance of North Carolina Inc. has paid $1.6 million in back wages and liquidated damages following a U.S. Department of Labor investigation. The company, which collects garbage and debris post-construction projects, misclassified 188 employees as independent contractors, according to DOL.
  • Namely, R&R Construction Maintenance did not pay workers the required overtime wages for hours over 40 in a workweek, according to the DOL. The company also misapplied the motor carrier overtime exemption for two employees and failed to pay another employee for their last day of work.
  • The payment is the result of an October 2022 judgment requiring R&R Construction Maintenance to pay the affected employees $838,007 in back wages — plus an equal amount in liquidated damages.

Dive Insight:

The DOL has recently cracked down on wage theft in the construction sector. The Office of Administrative Law Judges ordered that subcontractor GSI Pool Finishes pay back $317,097 in back wages for three U.S. and 56 Mexican workers in April, for example. The employer illegally paid workers piece rates, as opposed to required offered wage rates.

In fiscal year 2022 the Wage and Hour Division recovered $32,913,795 in back wages for 17,127 construction workers. DOL announced in February that it would hire 100 more Wage and Hour Division investigators

“Misclassifying employees as independent contractors deprives workers of their full wages, benefits and employment protections, and allows their employers to gain an unfair advantage over law-abiding competitors,” Juan Coria, the WHD regional administrator for Atlanta, said in a statement.

Coria continued underscoring a point that many regional WHD administrators have made: “The outcome of this case and the costly consequences that R&R Construction Maintenance suffered should serve as an example to other employers to make certain their employment practices comply with federal law,” Coria said

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