Companies in Arizona to Pay $394,438 in Back Wages and Liquidated Damages Following U.S. Department of Labor Lawsuit

PHOENIX, AZ – More than 120 employees will share $394,438 in back wages and liquidated damages recovered by the U.S. Department of Labor to conclude a lawsuit filed by the Department’s Office of the Solicitor against national staffing agency Employer Solutions Staffing Group LLC and Arizona staffing agencies TBG Logistics LLC and Countrywide Payroll & HR Solutions Inc. for violations of the Fair Labor Standards Act (FLSA). In addition to the recovery of the unpaid back wages and liquidated damages, the Department also assessed $15,000 in civil money penalties to TBG Logistics for the willful nature of the violations found.

On July 10, 2018, U.S. Senior District Judge Roslyn O. Silver in Phoenix entered judgment against Employer Solutions Staffing Group LLC (ESSG) in the amount of $157,036. Judge Silver rejected ESSG’s argument that, as a large employer, it could not be expected to monitor every paycheck it processes, explaining that ESSG’s failure to pay overtime was willful because “an employer must comply with the FLSA no matter how large it is or how many payroll transactions it processes.” TBG Logistics LLC and Countrywide Payroll & HR Solutions Inc. previously settled with the U.S. Secretary of Labor, agreeing to pay a total of $237,402.

The lawsuit filed on behalf of the Secretary and investigations by the Department’s Wage and Hour Division said the logistics company and the staffing agencies were engaged in a pay scheme to avoid the payment of overtime. Investigators found that the employers paid straight time for all hours worked, including for hours worked in excess of 40 in a work week.

“This litigation and the investigation demonstrate the U.S. Department of Labor’s commitment to ensuring that workers receive the wages they have legally earned, and that employers compete on a fair and level playing field,” said Wage and Hour Division District Director Eric Murray, in Phoenix. “We encourage employers to reach out to their Wage and Hour Division district office for information about how to comply, and to make use of the many resources and tools we offer to be in compliance and avoid violations.”

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the Division’s toll-free helpline at 866-4US-WAGE (487-9243). Employers who discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program.  Information is also available at www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by WHD.