H&H Lawn Service and Snowplowing to pay $38K in back wages, damages to 11 employees for overtime violations

Type of Action: Fair Labor Standards Act consent judgment

Name of Defendants: H&H Lawn Service and Snowplowing LLC, Muskegon, Michigan
Darrell Hinken

Investigation Findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found the company and its owner Darrell Hinken violated the FLSA’s overtime and record keeping provisions. 

Specifically, the employer:

• Misclassified some employees as independent contractors instead of employees, and subsequently failed to pay them overtime when they worked more than 40 hours in a week.
• Paid some employees a flat salary, without regard to the number of hours they worked; this led to overtime violations when they worked more than 40 hours per week.
• Banked overtime hours for some employees, to be paid out in future workweeks at straight time, rather than paying overtime in the pay period during which the hours were worked.
• Failed to keep required payroll records.

Resolution: Under terms of a consent judgment entered into U.S. District Court for the Western District of Michigan, Southern Division, H&H Lawn Service and Snowplowing will pay a total of $38,000 in back wages and liquidated damages to 11 employees.

The company has agreed to abide by the FLSA in the future and specifically to:

• Notify employees in writing if they are claiming an overtime exemption for them, and why.
• Provide Wage and Hour Division facts sheets to all employees, describing the definition of an employee versus an independent contractor, among other topics.
• Retain a certified public accounting firm to conduct an annual audit of the firm’s payroll practices to determine compliance with the FLSA.

Quote: “Banking of overtime and misclassifying employees as independent contractors occurs all too often in seasonal businesses such as lawn care and snowplowing,” said Mary O’Rourke, district director for the Wage and Hour Division in Grand Rapids. “These pay practices hurt workers, and give the employer an unfair advantage over businesses that play by the rules. This case demonstrates our commitment to using every tool available to us, including litigation, to ensure that these hard-working employees receive every cent they have earned.”

Information: 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.

Court: U.S. District Court for the Western District of Michigan, Southern Division

Docket Number: Perez v. H & H Lawn Service and Snowplowing LLC, et al.
1:15-cv-00197-PM