Department of Labor recovers $1.6M in back wages, damages from North Carolina contractor for 188 workers misclassified as independent contractors

DURHAM, NC – The U.S. Department of Labor has recovered more than $1.6 million in back wages and liquidated damages for 188 workers, many of them denied minimum and overtime wages by a North Carolina construction services contractor who misclassified the employees as independent contractors.

The recovery follows a default judgment against R&R Construction Maintenance of North Carolina Inc. that the department’s Office of the Solicitor obtained in the U.S. District Court for the Eastern District of North Carolina in October 2022. The judgment required the company to pay the affected employees $838,007 in back wages and an equal amount in liquidated damages.

The court’s action was prompted by the findings of an investigation by the department’s Wage and Hour Division that found R&R Construction Maintenance misclassified the employees as independent contractors and did not pay them required overtime wages for hours over 40 in a workweek, in violation of the Fair Labor Standards Act. The division also learned the employer misapplied the motor carrier overtime exemption for two employees and did not pay another employee for their last day of work, also FLSA violations.

“Misclassifying employees as independent contractors deprives workers of their full wages, benefits and employment protections and allows their employers to gain an unfair advantage over law-abiding competitors,” explained Wage and Hour Division Regional Administrator Juan Coria in Atlanta. “The outcome of this case and the costly consequences that R&R Construction Maintenance suffered should serve as an example to other employers to make certain their employment practices comply with federal law.”

Based in Durham, R&R Construction Maintenance of North Carolina Inc. provides garbage and debris removal services for construction sites.

Workers and employers can contact the Wage and Hour Division at its toll-free number, 1-866-4-US-WAGE (487-9243). The department can speak with callers confidentially in more than 200 languages, regardless of where they are from.

Learn more about the Wage and Hour Division, including its compliance assistance toolkit for the construction industry, and a search tool to learn if you are owed back wages collected by the division. Workers and employers alike can help ensure hours worked and pay are accurate by downloading the department’s timesheet app in Spanish or English, available for iOS and Android for free.