J&J Snack Foods pays more than $2.1M in back wages, damages to 677 temporary workers in New Jersey, Pennsylvania

PENNSAUKEN, N.J. — Two federal investigations have found that temporary production line workers at J&J Snack Foods Corp., a leading North American manufacturer and distributor of popular food and beverages, were significantly cheated out of their wages by the company and two staffing firms hired to provide the workers.

J&J's products include baked goods under the Country Home Bakers, Mary B's and SuperPretzel brand names, and frozen food products under the ICEE, Luigi's, Slush Puppie, Minute Maid Juice Bars and WholeFruit labels. Its products are sold nationwide at stadiums and arenas; department, chain and convenience stores; discount and warehouse clubs; theme parks; movie theatres; schools and colleges; and retail supermarkets.

The U.S. Department of Labor's Wage and Hour Division found J&J and the staffing firms denied minimum wage and overtime pay to workers as required under the Fair Labor Standards Act. As a result, J&J — a repeat FLSA violator — has agreed to pay a total of more than $2.1 million in back wages and liquidated damages to 677 workers.

"Many hourly workers live paycheck-to-paycheck, and they rely on every penny to pay the rent, feed their families, and keep the lights on. Cheating workers out of the wages they've earned hurts them, their families and entire communities," said U.S. Secretary of Labor Thomas E. Perez. "Paying workers properly isn't a nice thing to do, it's the law. We will continue to use our enforcement authority to ensure all workers receive a fair day's pay for a fair day's work."

The department's most recent investigation found 465 workers at J&J's Swedesboro facility provided by staffing firm Sebastian and Sebastian LLC were paid straight time for overtime hours worked beyond 40 in a workweek, in violation of federal law. In response, J&J agreed to pay a total of $1,260,254 in back wages and liquidated damages to these workers.

In addition, the department assessed a $20,000 civil penalty for the willful, repeat nature of the violations found in the latest investigation in New Jersey. Earlier this year, the department found that J&J and Pennpak, a staffing firm that provided workers at the J&J facility in Chambersburg, Pennsylvania, failed to pay their workers at least the federal minimum wage and overtime. In that case, J&J agreed to pay 212 temporary workers $920,000 in back wages and liquidated damages.

In its investigations, the department determined J&J jointly employed the temporary workers provided by both Sebastian and Pennpak. The FLSA states joint employment exists where workers have an employment relationship with one employer such as a staffing agency, and the economic realities show that they are economically dependent on — and thus employed by — another entity involved in the work.

"In our modern economy, it's common for a lead business — or brand name — to contract out many activities to be performed by other businesses, contributing to a fissured workplace," said Dr. David Weil, administrator for the Wage and Hour Division. "As profit margins get squeezed along the labor supply chain, there is a greater likelihood of wage violations."

"When a joint-employment relationship exists, we will hold those companies accountable when wage violations occur and workers are cheated," Dr. Weil continued. "At the same time, we are committed to educating employers and offering them the guidance they need to comply with the law and protect workers' rights."

In addition to payment of back wages and damages in both agreements, J&J is taking the following steps for a period of 18 months to ensure future FLSA compliance:

• Include a written provision in all contracts with temporary staffing agencies requiring compliance with the minimum wage, overtime and recordkeeping provisions of the FLSA
• Review a sampling of their temporary staffing agency payroll records at least four times a year to ensure payment in compliance with the FLSA
• Provide a list of all the temporary staffing agencies with which J&J contracts to the Wage and Hour Division

These investigations were part of the Wage and Hour Division's "Temporary Help" initiative. Earlier this year, the division found that workers at a Philadelphia printing company were owed $1.4 million in back wages and liquidated damages for minimum wage and overtime violations committed by their employers.

"Companies may find temporary staffing services useful in addressing their staffing needs, but their use should not come at the expense of fair and legal wages for temporary workers," said Mark Watson, administrator of the Wage and Hour Division's Northeast Region. "Those who contract with outside companies for temporary help have an obligation to ensure these workers are paid in compliance with the law."

The FLSA requires that covered, non-exempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records. The FLSA provides that employers who violate the law are liable to employees for their back wages and an equal amount in liquidated damages.

Based in Pennsauken, J&J Snack Foods Corp. has manufacturing, warehousing and other facilities in New York, Pennsylvania, California, Texas, Missouri, Florida, North Carolina and Oregon. The company also has operations in Mexico and Canada.

Sebastian and Sebastian, LLC is based in Voorhees. Pennpak is based in King of Prussia, Pennsylvania.

The department's investigations were conducted by the Wage and Hour Division's southern New Jersey district office, and Wilkes-Barre, Pennsylvania, district office. The cases were negotiated and resolved by attorneys in the department's Philadelphia and New York regional solicitors' offices.