U.S. Labor Department Works with Southside Chicago
Employer to Pay 133 Workers over $1.3 Million in Unpaid Wages

WASHINGTON—Strandtek International Inc., a financially strapped Southside manufacturing plant on the brink of closing, will now remain open and has paid 133 workers $1.3 million in unpaid wages, thanks to negotiating efforts by the U.S. Department of Labor.

“This settlement reflects the Labor Department’s commitment to go the extra mile to ensure that America’s workers are treated fairly and are paid for all of the hours they have worked,” said U.S. Labor Secretary Elaine L. Chao. “We are pleased that because of a negotiated agreement with Strandtek, $1.3 million in unpaid wages will be paid to their workers and jobs will be saved as well.”

Strandtek International Inc., a company that manufactures acoustical insulation for the appliance and automotive industry, had been under investigation by the department for a Fair Labor Standards Act (FLSA) violation following allegations that the company had failed to meet three payrolls. At the time, the company was operating under the control of a trustee who was attempting to negotiate the sale of the financially strapped but still viable company.

In an effort to secure the unpaid wages owed to the employees, as well as save their jobs, the department negotiated an agreement with the trustee of the company to notify potential buyers of the unpaid wages and to make payment of the wage liability a condition of the sale of the company. As part of the agreement, Strandtek agreed to pay one of three missed payrolls and the new owner, AIM, LLC, agreed to pay the remaining payrolls.

The department closely monitored the terms of the agreement to ensure that employees were paid $1.3 million to compensate them for all the hours they had worked before the sale of the manufacturing company was finalized.

“This is a win-win situation for Strandtek employees,” said Patricia Lewis, Chicago district director for the Wage and Hour Division. “This outcome highlights what can happen when companies willingly work with the department to resolve difficult issues in order to be fair to their employees and come into compliance with the law.”

The FLSA requires payment of the federal minimum wage of $5.15 and generally requires payment of overtime for hours worked over 40 in a single workweek. Employers are required to keep an accurate record of hours worked by employees. The federal wage and hour law prohibits the movement of goods in interstate commerce that were made in violation of the minimum wage or overtime pay requirements of the FLSA.

For further information about the FLSA, call the Department of Labor’s toll-free help line at 1-866-4USWAGE (1-866-487-9243). Information is also available on the Internet at www.wagehour.dol.gov.

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Archived News Release — Caution: Information may be out of date.