US Department of Labor recovers $352K in back pay for 653 workers after Detroit area staffing agency misclassifies them as independent contractors

DEARBORN, MI – Federal wage investigators have recovered $352,347, in back overtime wages for 653 workers of a Dearborn staffing agency that assigned them to manufacturing facilities and illegally classified them as independent contractors.

By doing so, the employer denied their workers overtime wages, a violation under the Fair Labor Standards Act.

Misclassified employees are also denied other benefits including unemployment insurance and worker’s compensation and are required to take on the employer’s tax burden.

The U.S. Department of Labor’s Wage and Hour Division found Leo Staffing & Management LLC – operating as LTL Staffing and Business Solutions – assigned most of the employees to work as machine operators, welders and forklift drivers at Challenge Manufacturing locations in Walker, Holland and Pontiac. While the employees worked directly at the manufacturing plants, LTL Staffing maintained all employee records and processed their paperwork and payroll.

“When there is an employment relationship between a worker and an employer, these workers are covered under the Fair Labor Standards Act. This means employees must be paid the minimum wage and overtime as required by the FLSA,” explained Acting Wage and Hour District Director Angela Telang in Detroit. “Failing to recognize workers as employees strips them of a wide range of valuable benefits and labor protections.”

“Misclassification of employees as independent contractors is a major concern for the U.S. Department of Labor, and violations associated with misclassification are found all too frequently by Wage and Hour Division investigators,” Telang added. “We can assist employers and workers in determining if a worker should be classified as an independent contractor or as an employee.”

Learn how to determine if a worker is an employee or independent contractor.  

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division and how to file an online complaint. Workers and employers can contact the division’s toll-free helpline for assistant at 866-4US-WAGE (487-9243), regardless of where they are from.

Download the agency’s new Timesheet App for android and iOS devices to ensure hours and pay are accurate.