U.S. Department of Labor Investigation Results in U.S. District Court Ordering Tennessee Contractor to Pay $188,244 in Back Wages and Damages

MEMPHIS, TN – After an investigation by U.S. Department of Labor’s Wage and Hour Division, the U.S. District Court for the Western District of Tennessee has ordered Capital Construction Inc. and its owner, Justin B. Herter, to pay $188,244 in back wages and liquidated damages to 37 employees for violating the overtime and recordkeeping provisions of the Fair Labor Standards Act (FLSA).

Division investigators found that Capital Construction Inc. - a general contractor based in Collierville - failed to pay employees required overtime for hours they worked beyond 40 in a work week. The employer incorrectly considered some workers to be independent contractors rather than employees, creating overtime violations when the inaccurate classification resulted in Capital Construction Inc. paying the employees straight-time rates instead of the time-and-one-half required for overtime. The employer paid some employees with a company check or direct deposit for their first 40 hours each work week and then paid overtime hours in cash, at straight-time. Investigators also found the employer paid other employees completely in cash, off the books, for all of their hours and denied overtime. In addition, the company failed to maintain accurate payroll records, and failed to post FLSA posters for employees’ reference, as required.

“The U.S. Department of Labor is committed to ensuring that employees receive the wages they have legally earned for all the hours they have worked,” said Nettie Lewis, Wage and Hour Division District Director in Nashville. “The resolution of this case demonstrates our commitment to those workers, and to providing employers the tools they need to comply with the law. Our work levels the playing field for employers who play by the rules.”

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by the Division.