Employees misclassified as independent contractors awarded $1.3 million
A federal judge has ordered kgb USA Inc., the world’s largest independent provider of directory assistance and enhanced information services, to pay $1.3 million in minimum-wage compensation to 14,568 of its current and former employees nationwide for violations of the Fair Labor Standards Act (FLSA).
Judge James Knoll Gardner of the U.S. District Court for the Eastern District of Pennsylvania entered a consent judgment and order against the company, which agreed to the terms. The employees, who were hired to respond to text messages from customers, worked from home throughout the United States. The company’s headquarters are in Bethlehem, Pa.
The consent judgment and order resolve an investigation by the U.S. Department of Labor’s Wage and Hour Division that determined the company misclassified employees as independent contractors and paid them a piece rate based on the numbers of text messages and inquiries they responded to, without regard to the number of hours they worked. FLSA violations resulted when piece-rate earnings failed to yield at least the federal minimum wage of $7.25 per hour.
“Misclassification of workers as independent contractors is a serious threat to their livelihood,” said acting Secretary of Labor Seth D. Harris. “Misclassifying workers also undercuts responsible employers, who must compete with unscrupulous employers who do not obey the law. The Department of Labor is committed to ensuring that employees are classified properly so that they receive both the pay they rightfully earn and the protections to which they are entitled, including minimum and overtime wages, family and medical leave, and unemployment insurance.”
The investigation also revealed that the company failed to record and maintain accurate records of hours worked, in violation of FLSA record-keeping requirements. Under the terms of the consent judgment, kgb USA must pay the back wages found due in full and is enjoined from future FLSA violations. The agreement requires compliance with all of the act’s minimum-wage, overtime and record-keeping provisions and specifies that kgb USA shall not classify any worker as an independent contractor unless the worker is a bona fide independent contractor and fails to meet the definition of an employee under the FLSA.
©2013 SHRM. All rights reserved.
Have HR-related questions and concerns? Get access to essential forms, policies and guides, plus a live call center, at ToolkitHR.com, powered by HCN and the Society for Human Resource Management (SHRM).
Hardwood event hits Portland in late April
Portland, Ore.-based Western Hardwood Association will host the International Hardwood Convention & Exposition April 30 to May 2 at the DoubleTree Lloyd Center in Portland.
An estimated 300 Asian, European and U.S,. East Coast buyers will be exposed to a variety of western hardwoods from producers, wholesalers, importers and exporters. Lumber, millwork and finished products will also be highlighted during the show.
Seminars, training and a mill tour are also included. More information is available from the association at westernhardwood.org.
PRO Group embraces QR codes
Denver-based PRO Group said it is helping its affiliated stores through the use of QR (quick-response) codes.
By using QR (quick-response) codes, PRO-affiliated stores can let consumers tap bargains and information by tapping their smartphones; links reveal coupons for goods and demonstration videos for do-it-yourself projects.
PRO said it also helps retailers build their Internet presence by distributing monthly bargain-of-the-month and circular graphics in formats suitable for store websites and Facebook.
PRO Group is a multidivisional international merchandising and marketing organization. Its operating units include PRO Hardware, GardenMaster, Farm Mart and Golden-Link. The company’s purchasing power exceeds $3 billion through its member distributors.