Court orders Newark flooring company to pay $280K in back wages, damages to 15 employees after US Labor Department investigation

Type of Action: Consent judgment

Defendant(s): Ferry Carpets Inc., Alina Lolo, and Antonio Lolo

Resolution: Flooring company Ferry Carpets Inc. will pay 15 employees $140,000 in back wages and $140,000 in liquidated damages under the terms of a consent judgment entered in a U.S. District Court for the District of New Jersey in Newark on May 24.

The judgment resolves a lawsuit that followed an investigation by the U.S. Department of Labor’s Wage and Hour Division, which alleged that the employer violated the Fair Labor Standards Act’s overtime and recordkeeping provisions.

Investigators found that, from February 2013 to February 2015, Ferry Carpets:

• Paid employees who worked as floor installers a fixed salary, without regard to how many hours they worked, resulting in overtime violations when they worked beyond 40 hours per week. These employees typically worked from 45 to 72 hours a week.
• Failed to pay employees for time spent loading vehicles or traveling from the employer’s location to the day’s first job site.
• Attempted to simulate FLSA compliance and conceal its failure to pay overtime premium rates by creating and submitting false records reflecting that employees worked 40 hours or less per week when it knew that employees were regularly working overtime hours.

As a result of the consent judgment, Ferry Carpets agreed to:

• Post and provide employees with information regarding their rights under the FLSA and how to contact the Wage and Hour Division if they believe the employer failed to pay them properly.
• Use a time clock or other automated record-keeping practice to accurately record employee work hours.
• For each workweek, prepare a statement of hours worked by each employee for each day, week, and pay period. Each employee must review, make corrections if necessary, and sign.
• Obtain the services of an independent, third-party examiner to audit the employer’s compliance with the FLSA, once, within six months from the entry of the consent judgment.

Quote: “The violations found in this case are all too common in this industry,” said John Warner, director of the Northern New Jersey Wage and Hour District Office. “Ferry Carpets denied these low-wage workers the wages they had rightfully and legally earned, profiting on the backs of their employees. This settlement demonstrates that the U.S. Department of Labor is determined to ensure that workers receive a fair day’s pay for a fair day’s work, and that employers who break the law do not get an unfair competitive advantage over those who play by the rules.”

Background: Founded in 1988, Ferry Carpets sells and installs commercial and residential carpeting, hardwood, laminate and vinyl flooring.

The FLSA requires that covered, nonexempt 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 hourly rates for hours worked beyond 40 per week. The FLSA provides that employers who violate the law are, as a general rule, liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees. Additionally, the law requires employers to maintain accurate time and payroll records and prohibits retaliation against employees who exercise their rights under the law.

For more information about the FLSA and other federal wage laws, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

Perez v. Ferry Carpets Inc., et al
Civil action number: 2:15-cv-03374

Court: U.S. District Court for the District of New Jersey, Newark