Houston contractor to pay workers $371K in back wages, damages for overtime violations at Waikiki hotel renovation

Employer: R&R Construction Services Corp.

Sites: Maile Sky Court Hotel
2058 Kuhio Ave., Honolulu Hawaii

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division found R&R Construction Services Corp. violated overtime provisions of the Fair Labor Standards Act. Specifically, this employer misclassified its workers as independent contractors rather than employees. This practice resulted in overtime violations when R&R paid these workers fixed rates per day, without regard to how many hours they worked, and they worked more than 40 hours in a week. Workers on the project typically worked 10-hour days, 6 or 7 days per week.

Resolution: The company paid 95 workers, including painters, carpenters, plumbers, laborers and cleaners $185,688 in unpaid overtime and an equal amount in damages, for a total of $371,376.  The department also assessed a civil money penalty of $68,680 against the employer for the willfully violating the overtime provision. The Hawaii Department of Labor and Industrial Relations fined R&R Construction $767,000 recently for misclassifying construction employees as independent contractors.

Quote: “This case provides a great example of federal and state agencies working together on behalf of disenfranchised workers to more comprehensively safeguard their pay and work conditions,” said Terence Trotter, director of the Wage and Hour Division office in Honolulu. “We’ll remain vigilant in our efforts to find other employers utilizing similar schemes to gain a competitive advantage in the marketplace at the expense of workers and lawfully compliant employers.”

Background:  Employees subject to misclassification often are denied access to critical state and federal baseline benefits and protections, including minimum wage, overtime, family and medical leave, unemployment insurance, worker’s compensation, and safe workplaces. The Wage and Hour Division has entered into partnerships with 35 states, including Hawaii, to work together to combat misclassification.

Information: Headquartered in Houston, R&R Construction Services Corp. was hired by Selby Construction as a subcontractor to renovate the Maile Sky Court Hotel in Waikiki to reopen it as a Holiday Inn Express.

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/.