SCA Violations Alleged in California Â» FLSA Suit Filed in New Jersey

Pending Cases Coast to Coast

Posted on 21-Sep-07 by The Timekeeper

California Mail-Hauling Company in Hot Water

The US DOL has filed an administrative complaint against Alan Berman Trucking of Woodland Hills, CA, seeking to recover $1,369,870 in back wages the department says the trucking company owes 80 current and former employees who worked for the company between June 2004 and February 2007.

The complaint also seeks “debarment” of the company and its principals — basically preventing them from receiving government contracts for a period of three years.

Lest you think that’s no big deal, the company had approximately $10 million in mail hauling contracts during the time period covered by the investigation.

Apparently, these contracts were subject to the provisions of the Service Contract Act (SCA). Among other things, the SCA stipulates that contractors and subcontractors on federal service contracts exceeding $2,500 must pay their service workers no less than the wages and fringe benefits prevailing in the locality. The DOL issues “wage determinations” providing the required SCA rate and fringe benefits for each service occupation. These determinations become a part of the covered federal contracts.

According to the suit, investigators found violations on eight contracts where the company treated their drivers as independent contractors. The suit alleges the company required drivers to use their own trucks and assume all the related costs, but failed to reimburse the cost of maintenance on the trucks, took illegal fuel cost deductions from driver paychecks, failed to record hours worked and failed to pay any fringe benefits. The drivers were paid either by the mile or a flat per-trip fee. As a result, the drivers’ wages fell below the minimum required by the SCA.

The suit names the company itself as well as the company president, Alan Berman of Woodland Hills and company vice president, Osvaldo Tarditti of Northridge CA as defendents. What this means for those of you playing along at home is these two guys are potentially personally on the hook.

According to an announcement of the suit, the company has been investigated a total of nine times, with violations noted in seven of the previous investigations. Eeek! And they still managed to snag $10 milliion in contracts?

Insurance Giant Alleged to Have Misclassified Workers

Two insurance adjusters employed by AIG, Inc., the national largest property and casualty insurer, filed a class-action suit under the FLSA, alleging AIG intentionally misclassified hundreds of clerical employees as exempt from federal overtime requirements.

The suit, filed 6-Sept-2007 in the US District Court in New Jersey, seeks damages for all similarly-suited AIG employees including unpaid overtime since January 2001, damages and interest.

There have been settlements in several high profile overtime cases in the past few years. For instance, Allstate agreed to pay up to $120 million to settle a claim it denied California workers overtime pay owed under the provisions of the FLSA. State Farm reportedly agreed to pay more than $200 million to settle a FLSA suit brought by its claims adjusters. In both cases, the companies denied any FLSA violations.

Just goes to show ya how important it can be to make sure you’ve got your employees classified properly, eh?

Filed under: Wage and hour lawsuits