Painting contractor in Phoenix to pay nearly $200K in back wages, damages and penalties following US Labor Department investigation

Employer: Arizona Painting Company LLC

Site: 3235 N. Arizona Avenue, Suite D-10, Chandler, Arizona 85225

Investigation findings: An investigation by the U. S. Department of Labor's Wage and Hour Division found that Arizona Painting Company failed to pay their employees the federal minimum wage and overtime in violation of the Fair Labor Standards Act. Employees legally-entitled to minimum wage and overtime were paid flat weekly salaries that, when divided by the number of hours they actually worked, fell short of the federal minimum wage, currently $7.25 per hour. These employees routinely worked between 50-55 hours per week, yet the employer also failed to keep an accurate record of hours worked and failed to pay them overtime for hours worked beyond 40 per week, as required by the FLSA. Other employees, who were paid on a commission basis without regard to how many hours they had worked, were also paid less than the minimum wage and were denied overtime.

Resolution: Arizona Painting Company agreed to comply with the FLSA and will pay $165,638 in back wages and damages to 79 workers. The commercial and residential painting contractor will also pay an additional $29,546 in civil money penalties. As part of the settlement, the employer notified employees about the case and agreed to provide them with training on their rights under the FLSA.

Quote: "Workers in this industry are among the most vulnerable that we see," said Eric Murray, director of the Wage and Hour Division's district office in Phoenix. "As the back wages, damages and penalties paid in this case illustrate, we are committed to ensuring that workers receive every penny they have rightfully earned. Other employers should take note of this investigation, and ensure that they are in compliance with the law. Other employees being paid in this manner should give us a call. Our services are free, and confidential."

Information: Simply paying an employee a salary does not necessarily mean the employee is not eligible for overtime. The FLSA provides an exemption from both minimum wage and overtime pay requirements for individuals employed in bona fide executive, administrative, professional and outside sales positions, as well as certain computer employees. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Job titles do not determine exempt status. In order for an exemption to apply, an employee's specific job duties and salary must meet all the requirements of the department's regulations.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour, as well as time and one-half their regular rates for every hour they work beyond 40 per week. The law also requires employers to maintain accurate records of employees' wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law. For more information about federal wage laws administered by the Wage and Hour Division, call the agency's toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

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