US Labor Department sues Gloucester seafood processor, Lowell employment agency to recover at least $272K in wages, damages for 55 employees

BOSTON — The U.S. Department of Labor is suing a Gloucester seafood processing, packing and distribution business; a Lowell temporary employment agency and payroll service that supplies temporary workers exclusively to the business, and their respective owners, for underpaying 55 vulnerable low-wage workers, falsifying records and taking improper payroll deductions from some of the employees.

An investigation by the department’s Wage and Hour Division found that Intershell International Corp and its owners Yibing Gao-Rome and Monte Rome, and Ultimate Advance Corp. and its owner Phalla Chhit, who jointly employed the workers, violated the overtime and recordkeeping requirements of the Fair Labor Standards Act.

In its lawsuit, the department alleges that Intershell and its owners, since February 2013, and Ultimate and its owner, since April 2015:

• Did not pay time and one-half their regular rate of pay to 55 employees who cut, cleaned and packed seafood when they worked more than 40 hours during a work week, including employees paid at an hourly rate and those paid on a piece rate basis.
• Failed to maintain adequate and accurate records of all employees’ hours of work.
• Provided inaccurate payroll records to the division’s investigators.
• Improperly deducted from certain employees’ pay the cost of cleaning their uniforms.

The department is asking the court to find the Intershell defendants liable for payment of the back wages and liquidated damages of at least $272,000; of that total amount, the Ultimate defendants are jointly liable for approximately $116,000.  The department also seeks an order permanently enjoining and restraining all the defendants from future FLSA violations.

“This case concerns low-wage workers who are vulnerable to exploitation. Employers in the seafood processing industry often use temporary agencies to provide workers and that arrangement can sometimes be used by employers to attempt to avoid their obligations under the Fair Labor Standards Act. Establishing joint employment and holding the host company responsible for FLSA violations raises awareness of their responsibility and holds all parties accountable to comply with the law. Employers should take note of this and initiate corrective action when needed to ensure that their workers are properly paid,” said Carlos Matos, the Wage and Hour Division’s district director for Massachusetts.

“This case shows a ‘fissured workplace’ – one where the employment relationship between the workers and the business receiving the benefit of their labor has fractured because a company contracts out various activities to staffing agencies, often to avoid liabilities and to cut costs,” said Michael Felsen, the department’s New England regional solicitor. “In such arrangements, workers are frequently deprived unlawfully of the full wages to which they’re entitled. In this case both the company using the contract labor, and the staffing agency that provides the workers, are responsible as employers to comply with the law and subject to enforcement action if they don’t.”

The division’s Boston District Office investigated the case, while Senior Trial Attorney James Glickman and Trial Attorney Sheila Gholkar in Boston’s solicitor’s office filed the complaint.

For more information about the Fair Labor Standards Act 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/.

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Perez v. Intershell International Corp., Yibing Gao-Rome, Monte Rome; Ultimate Advance Corp., Phalla Chhit.
Civil Action Number: 1:16-cv-11999

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