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June 10, 2011
DOL Wins Back Wages, Damages for Security Guards for FLSA Breach

U.S. Department of Labor (DOL) has obtained summary judgment in federal court in a lawsuit against International Detective & Protective Services (IDPS), which requires the company and its owners and officers to pay 57 security guards more than $200,000 in back wages and liquidated damages for violations of the overtime and recordkeeping provisions of the Fair Labor Standards Act (FLSA).

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According to a DOL press release, The judgment also permanently enjoins the defendants from violating the FLSA in the future. The department’s suit was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division, following an investigation by DOL’s Wage and Hour Division (WHD).

“An employer may not misclassify its workers as independent contactors in order to avoid paying them required wages under the FLSA,” said Thomas Gauza, district director of the Labor Department’s Wage and Hour Division in Chicago. “The Department of Labor is committed to ensuring that all workers receive their rightfully earned wages, and the resolution of this lawsuit demonstrates that we will use all available enforcement tools to protect workers against exploitation and ensure compliance with the law.”

WHD’s investigation revealed that the defendants improperly classified employees as independent contractors despite the existence of an FLSA-covered employment relationship between the defendants and their security guard employees, and, as a result, failed to pay employees time and one-half their regular hourly rates for all hours worked over 40 per week, as required under the FLSA.

Upon reviewing the division’s findings, Judge Virginia M. Kendall concluded, “Defendants attempted to characterize the guards as independent contractors by having them sign an employment contract titled ‘Independent Contractor Contract.’ Such an effort to avoid responsibility under FLSA to pay overtime premium is ineffective. Defendants violated the FLSA and therefore are liable for unpaid overtime compensation.” As such, the judgment requires the defendants to pay $101,577 in back wages, along with an equal amount in liquidated damages, for a total of $203,155.

Judge Kendall further stated, “Thec has no confidence that IDPS will comply with the FLSA going forward. Despite explicit warning from [a WHD investigator], IDPS continued to improperly withhold from guards overtime premium payments…[and] there is no evidence that Defendants are currently abiding by the FLSA .…” Based on these findings, the court ordered a permanent injunction, prohibiting defendants from future FLSA violations.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular hourly rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week.

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