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A construction staffing agency and its owner must pay $278,073 in back wages and liquidated damages to 208 construction workers for allegedly intentionally misclassifying workers as independent workers, the U.S. Department of Labor said Thursday.
The DOL said the U.S. District Court in Norfolk, Virginia entered a consent judgment on Sept. 15 that ordered Suffolk, Virginia-based Resto Contracting LLC and its owner, Bethany B. Resto, to pay $139,036 in back wages and an equal amount in liquidated damages to the affected workers.
The DOL said the consent order followed a finding by the department’s wage and hour division that the company and its owner hired workers as finishers, loaders, operators and carpenters, and then illegally misclassified them as independent contractors.
The department said the workers were paid straight time for all hours, including those totaling more than 40 in a workweek, thus denying them the required overtime pay rate, in violation of the Fair Labor Standards Act.
The statement said the department’s Office of the Solicitor successfully argued in federal court that bankruptcy could not halt enforcement and litigation after the employer filed for bankruptcy as an attempt to stop the case.
It said months of contested litigation ended when the employer agreed to the consent judgment and to FLSA compliance.
The department said in addition to obtaining back wages and damages, the consent judgment permanently enjoins the employer and its owner from future FLSA violations and prohibits them from discharging or taking retaliatory action against employees exercising their FLSA rights.
An attorney for the staffing agency and owner had no comment.