Courier to pay $575,000 for misclassifying drivers under FLSA

The Department of Labor said Friday that a courier service will pay $575,000 in back wages and liquidated damages to 62 drivers under a consent order for allegedly misclassifying drivers as independent contractors and denying them their rights under the Fair Labor Standards Act.

The DOL said the consent order follows a lawsuit filed by the department in January 2020 in U.S. District Court in Worcester, Massachusetts, against New York-based USPack Logistics LLC and its chief operating officer, Frank Powell, in connection with drivers at the company’s Shrewsbury, Massachusetts, location.

The department alleged that the company and Mr. Powell paid courier drivers per delivery rather than an hourly wage, required drivers to pay for gasoline and vehicle upkeep and deducted various fees and insurance costs from drivers’ pay. It said this resulted in the drivers being paid less than the federal minimum wage of $7.25 per hour.

The defendants also allegedly violated the FLSA’s overtime requirements when they did not compensate the drivers at one and one-half times their regular pay rate for hours working more than 40 hours in a work week, and did not maintain accurate records of the hours the affected employees worked.

Defendant attorneys in the case did not respond to a request for comment.

In July, a federal appeals court reversed a lower court’s summary judgment and sent back a case concerning whether drivers for a medical service were employees, and therefore subject to the FLSA, or independent contractors.