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This report includes a summary of key changes, including the salary level test and salary basis test.

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August 21, 2003
Garment Workers to Receive $400K in Back Wages
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e garment manufacturers in Saipan, an island in the western Pacific Ocean, will pay a total of $398,037 in back wages to workers for overtime worked, the Labor Department announced.

In addition, two security companies, which subcontract to provide guard services at two of the manufacturing sites, were ordered to pay $42,043 to employees. The Labor Department also levied $205,751 in penalties against three of the companies.

The investigations were part of the department’s enforcement initiative targeting the garment industry. Investigators with the Labor Department's Wage and Hour Division have conducted the planned garment initiative on the island to measure the garment industry's compliance with federal laws regarding pay and work hours. Investigators say they found five of the manufacturers investigated in violation of the federal overtime provisions of the federal Fair Labor Standards Act (FLSA). During the course of their reviews of the garment-makers, Wage and Hour investigators also discovered instances of under payment of wages by two security subcontractors operating at the manufacturing sites.

The largest back wage assessment was against N.E.T. Corporation for $235,964 owed to 251 employees because N.E.T. failed to meet its payroll in a timely manner, according to the department. This is the third investigation of N.E.T. in 4 years and the third time the company has been cited for failing to pay employees. Under the terms of a consent judgment filed in U.S. District Court, the company will pay back wages, $50,000 in penalties, and $76,040 to workers for damages.

The department also cited Grace International, Inc. for repeat and willful failure to meet its payroll obligations. The company has agreed to pay $111,872 in back wages to 144 employees for overtime hours worked. In addition to back wages, the company was assessed $79,150 in civil penalties.

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