$4.5 Million Could Clean a Lot of Houses
Posted on 24-Sep-07 by The Timekeeper
A Gardenia, CA based maid service company has been ordered by a U.S. district court judge to pay $3,467,789 in back wages and $1,058,973 in damages — for a total of over $4.5 million — to 385 current and former employees as a result of a lawsuit filed by the US DOL.
The suit alleged California Maid Services and Carpet Cleaning misclassified low-wage domestic workers as independent contractors, resulting in minimum wage and overtime violations of the FLSA.
The company also required workers to bring helpers to each job site, but did not compensate those helpers. Part of the money awarded to the workers by the court will go to those helpers.
Married couple Sergio Maldonado and Lorenza Rubio, the company owners, claimed they were exempt from federal wage requirements because the workers were independent contractors. However, by the time it got to the courts, the records state, “Defendants have provided no defense and have shown neither good faith nor reasonable belief that their conduct conformed with the FLSA (Fair Labor Standards Act).”
Because the company didn’t keep records of employees’ hours and payments, former employees will be reimbursed for underpaid wages based on their own accounts of work hours. Court records show employees generally worked 10.5 hours per day, six days a week.
So how did the DOL get wind of what was going on in Gardenia?
Apparently, they were tipped off by an employee who called the Employment Education and Outreach (EMPLEO) hotline seeking help recovering lost wages. EMPLEO is an alliance of organizations and government agencies that assist Spanish-speaking workers and employers with work-related concerns. The Mexican Consulate of Los Angeles, a meber of EMPLEO, provided help in locating witnesses so the DOL could pursue the lawsuit.
Yep, all it took was one disgruntled employee with the guts to call the authorities and complain.
As much as I try to be supportive of small business, in cases like this, it’s kinda hard to take the employers’ side. The IRS is pretty clear on what the criteria are in order for a worker to be classified as an independent contractor, and if you aren’t sure, there are plenty of labor lawyers around who would be happy to advise you. A couple of hundred dollars to consult with a lawyer doesn’t sound so expensive compared with $4.5 million, eh?
The DOL ain’t messin’ around on this, folks.
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