A nationwide auto parts supplier is going to have to spend 5.6 million over the next few years paying back wages that it stole from employees. The Department of Labor obtained the judgment that will see 1,398 misclassified drivers paid back for their work. Some details of the case date all the way back to 2012.
Three joint employers including Parts Authority Arizona LLC and Arizona Logistics Inc. (operating as Diligent Delivery Systems) will pay $2.8 million in back wages and another $2.8 million in damages to the misclassified drivers. On top of that, the companies and the owner of Diligent Delivery Systems, Larry Browne, will pay $150,000 in civil penalties.
The companies committed an array of pay infractions against the drivers. By misclassifying them, they avoided having to minimum wage and time and a half for drivers who worked more than 40 hours a week. On top of that, at times, drivers had to use their own vehicles for deliveries without compensation.
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“Employers cannot avoid their obligations to pay the minimum wage and overtime through contracting with another entity to obtain employees,” said Solicitor of Labor Seema Nanda. “The U.S. Department of Labor will combat misclassification schemes and wage theft through pursuing all the employers that are responsible for depriving employees of their rights under the Fair Labor Standards Act.”
The amount of the settlement that affected employees will receive is based on a number of factors. The majority will get a few hundred or a few thousand dollars. At least 16 will see big payouts of at least $50,000 though. For some, it’s a long time coming as the investigation spanned a period of time from April 20th, 2012 all the way until March 31st, 2020.
Principal Deputy Wage and Hour Administrator Jessica Looman summed up the problem by saying “misclassification… not only hurts the workers who are deprived of their wages, but also puts responsible employers at a competitive disadvantage.” Larry Browne nor any other executives or employees at any of the three parts supplier companies will face jail time related to the judgment.
