News Release
Court orders plastering company to pay more than $700K in back wages, damages to 470 employees, after Department of Labor investigation
GLENDALE, AZ – The U.S. Department of Labor is currently distributing more than $700,000 in back wages and damages to 470 employees, recovered from a Glendale plastering company following an investigation and lawsuit related to the employer’s pay practices.
On Jan. 19, 2023, the U.S. District Court for the District of Arizona entered a consent judgment that requires Palo Verde Plastering Inc. to pay overtime back wages and liquidated damages to affected employees. The employer paid workers “by the yard,” denied them overtime and repeatedly told them they were not entitled to it and falsified their books by assigning wages earned to “phantom” employees to avoid paying overtime.
The action follows a 2021 investigation by the department’s Wage and Hour Division that began with a review of the company’s payroll records. Palo Verde Plastering Inc. violated federal law by paying employees straight time for hours over 40 in a workweek that should have been paid an overtime premium rate. Investigators also found the company did not maintain accurate pay records, as required.
After their initial findings, investigators alleged that the employer agreed to pay hourly wages and overtime in November 2021, but then continued to violate the law until at least March 2022.
The court also affirmed $23,787 in civil money penalties assessed by the department to Palo Verde Plastering for its willful violations of the Fair Labor Standards Act.
“Palo Verde Plastering deliberately tried to evade the law by instructing employees that piece-rate employees are not owed overtime wages without regard to their hours worked, and then intentionally did not record all hours worked and wages earned to avoid paying overtime,” said Wage and Hour Division District Director Eric Murray in Phoenix. “Employers who violate workers’ right to be paid their full wages may face costly consequences, including penalties for willful acts to cover-up their violations.”
The court order also requires Palo Verde to do the following:
- Change its payroll practices to comply with federal recordkeeping regulations.
- Update its timekeeping system and immediately comply with the FLSA.
- Hire a third party to conduct training for all of supervisors, managers and others with payroll duties on federal requirements.
- Amend its corporate handbook and provide FLSA information to all employees.
“Hundreds of workers – many who worked on new home construction in Maricopa County – will now receive unpaid wages and damages, ranging from $42 to more than $7,000 per worker. These rightfully earned wages will make a big impact in the daily lives of many,” Murray added. “The Wage and Hour Division encourages workers to contact us if they believe their employer is not paying them all of their earned wages.”
Current or former Palo Verde Plastering employees can contact the division’s Phoenix District Office confidentially and regardless of immigrations status for more information by phone at 602-407-5323, or email: whdvm.phoenixvwp@dol.gov.
Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division and how to file an online complaint. For confidential compliance assistance, employees and employers can call the agency’s toll-free helpline at 866-4US-WAGE (487-9243), regardless of where they are from.
Download the agency’s new Timesheet App for iOS and Android devices – also available in Spanish – to ensure hours and pay are accurate.
Walsh v. Palo Verde Plastering Inc.
U.S. District Court for the District of Arizona
