Federal court orders 4 Arizona contractors to pay over $3.2M in owed wages, damages to 890 workers after Department of Labor investigations

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Federal court orders 4 Arizona contractors to pay over $3.2M in owed wages, damages to 890 workers after Department of Labor investigations

Employers also liable for $95K in penalties for overtime, minimum wage violations

PHOENIX - The U.S. Department of Labor announced today that efforts to protect residential construction workers from unlawful pay practices have recovered a total of $3.2 million in wages and damages from four Arizona contractors for 890 workers.

After a series of investigations, the department's Wage and Hour Division determined that 4-E Painting LLC and Liberty Constructors LLC in Mesa and BCK Coatings Inc. and Geronimo Wall Systems LLC in Tempe willfully and recklessly shortchanged the affected workers and violated the overtime and minimum wage provisions of the Fair Labor Standards Act.

The division's investigations found:

• 4-E Painting LLC did not pay overtime wages when the employer paid employees piece-rate wages for painting work or a combination of hourly wages and piece-rate wages. The division determined 4-E Painting owed $432,633 in overtime wages and an equal amount in liquidated damages to 158 workers. The department also assessed $24,732 in penalties.
• Liberty Constructors LLC denied employees required overtime pay and tried to conceal its violations by falsely showing a higher hourly rate or fewer hours worked on payroll records. The division found the contractor owes $401,049 in unpaid wages and $401,049 in liquidated damages to 100 employees. The department also assessed $17,900 in civil penalties.
• Geronimo Wall Systems LLC denied overtime pay to 195 employees for hours over 40 in a workweek. The lath, stucco, siding and stone contractormisclassified many of the employees as independent contractors. The division determined the employer owes $443,115 in overtime wages and $443,115 in damages to 195 employees, and the department assessed $22,770 in civil money penalties.
• BCK Coatings Inc. failed to pay required overtime wages for hours over 40 in a workweek. The apartment remodeling contractor misclassified employees as independent contractors, made improper deductions of up to $20 per week from employees' pay, required workers to cash their paychecks at a check-cashing business that charged a fee and failed to pay one employee for eight weeks of work. The investigation found BCK owes $360,000 in unpaid minimum and overtime wages and an equal amount in liquidated damages to 437 employees. The department also assessed $30,000 in penalties for the employer's willful violations.

"Our investigators have found that schemes to pay straight-time for all hours worked and avoid paying required overtime rates at time and one-half are pervasive among employers in Arizona's construction industry," said Wage and Hour Division District Director Eric Murray in Phoenix. "These unlawful practices create the false impression that piece-rate workers' wages comply with the Fair Labor Standards Act when, in fact, these employees are being stripped of their earned wages. The Wage and Hour Division is committed to holding employers accountable and ensuring that they do not obtain an unfair competitive advantage by denying workers their full wages."

Following these investigations, the department's Office of the Solicitor sought and obtained consent judgments in the U.S. District Court for the District of Arizona. The court orders require the contractors to pay the workers their share of more than $3.2 million in back wages and liquidated damages, and to pay the department $95,402 in penalties for their willful and reckless violations.

"More and more construction companies in Arizona are recognizing piece-rate workers' right to overtime and are promptly resolving the department's investigations when they are found to violate this right," said Regional Solicitor Marc Pilotin in San Francisco. "The Solicitor's Office will continue to obtain court judgments to recover back wages, liquidated damages and penalties against employers who violate the FLSA. Companies can avoid these damages and penalties by paying correctly in the first place."

The division urges workers who believe they may be owed wages by these construction employers to call the Wage and Hour Division in Phoenix at 602-514-7100.

The Wage and Hour Division's Phoenix District Office conducted the investigations. The department's Regional Solicitor's Office in San Francisco litigated the cases.

In fiscal year 2023, the division recovered more than $35 million in back wages for more than 17,000 construction industry workersnationwide.

Learn more about the Wage and Hour Division, including a search toolto use if you think you may be owed back wages collected by the division. For more information about the FLSA and other laws enforced by the division, contact the agency's toll-free helpline at 866-4US-WAGE (487-9243). The division can speak with callers confidentially in more than 200 languages, regardless of their immigration status. Download the agency's new Timesheet Appfor Android and iOS devices - free and now available in English and Spanish - to ensure hours and pay are accurate.

Julie A. Su, Acting Secretary of Labor, U.S. Department of Labor vs. Geronimo Wall Systems LLC et al

Case; Julie A. Su, Acting Secretary of Labor, U.S. Department of Labor vs. BCK Coatings Inc. et al

Case; Julie A. Su, Acting Secretary of Labor, U.S. Department of Labor vs. 4-E Painting LLC et al

Case; and Julie A. Su, Acting Secretary of Labor, U.S. Department of Labor vs. Liberty Constructors LLC et al

Case

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