US Department of Labor fines North Carolina employers $139K after they shortchanged farmworkers; seized passports, visas to intimidate them

Read this news release En Español. 

RALEIGH, NC – The U.S. Department of Labor assessed two North Carolina employers $139,039 in penalties after its investigation found they victimized non-immigrant farmworkers by shortchanging 65 workers’ wages, and by trying to intimidate and seizing their passports.

The workers were employed through the federal H-2A program, which enables agricultural employers to hire temporary non-immigrant workers to meet business demands while not adversely affecting wages and working conditions of similarly employed people working in the U.S.

Investigators with the department’s Wage and Hour Division found that McClenny Farms Inc. of Mount Olive received a contract to recruit, hire, house and transport H-2A workers to harvest cucumbers, sweet potatoes, tomatoes, tobacco and watermelons in Wayne County, North Carolina. During its investigations, the agency discovered Francisco Valadez Jr. of Smithfield — debarred for two years by the department in 2020 for violating H-2A regulations — was operating the contract on McClenny Farms’ behalf.

The division determined that McClenny Farms and Valadez were acting as joint employers, sharing responsibility for the violations and the assessed penalties.

“McClenny Farms and Francisco Valadez Jr. took advantage of dozens of workers recruited to do the physically demanding work of picking produce and tobacco on farms in Wayne County,” explained Wage and Hour Division District Director Richard Blaylock in Raleigh, North Carolina. “Our investigations found these employers violated their legal obligations and preyed on people who traveled to the U.S. for better-paying work simply to support themselves and their families back home.”

Specifically, division investigators found the employers violated H-2A regulations by doing the following:

• Not reimbursing workers for visa and application fees, and for inbound transportation expenses to the work site and instead requiring them to sign receipts without receiving pay. 
• Failing to have accurate records, including earnings, hours statements and reasons for pay deductions. 
• Not satisfying the job order’s requirements by failing to state actual terms and conditions, such as establishing a fixed worksite.
• Permitting unlawful cost-shifting by using a bus driver who demanded workers pay $150 each before getting on the bus.
• Failing to pay the required wage rates by paying $8 per hour in cash instead of $13.15 per hour, as stated in the work contract.
• Trying to discriminate and intimidate workers by confiscating their passports and visas upon arrival at the farm to restrict their ability to leave when the employers failed to pay full wages.

In addition, investigators determined the employers violated federal minimum wage provisions when they failed to pay workers at least the federal minimum wage rate of $7.25 per hour during their first week of employment by assessing workers inbound transportation expenses. They also denied the workers any pay for the first week of their employment, leaving them a week behind the wages promised in the contract.

“These employers’ actions are shocking,” Blaylock added. “In addition to committing wage theft, McClenny Farms and Valadez frightened workers and took personal documents to prevent them from leaving farms, acts of intimidation that we will punish as the law allows.” 

In addition to assessing civil money penalties, the division recovered $97,100 in back wages for the workers and debarred Francisco Valadez Jr. as an individual from participation in the H-2A program for two years. 

In fiscal year 2022, the Wage and Hour Division recovered more than $5.8 million in back wages for 8,260 workers employed in the agricultural industry. After 879 investigations, the division assessed employers more than $7.9 million in civil money penalties for violations of federal laws.

The division offers farmworker rights information, compliance assistance resources for employers and an agriculture compliance assistance toolkit to ensure compliance with the law. The federal government can temporarily ban, or debar, employers from hiring H-2A workers or from participating in the program altogether for a period of up to three years.

Employees and employers can also contact the Wage and Hour Division at its toll-free number, 1-866-4-US-WAGE (487-9243). Workers can call the division confidentially with questions – regardless of where they are from – and the department can speak with callers in more than 200 languages. 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. Workers and employers alike can help ensure hours worked and pay are accurate by downloading the department’s Android and iOS Timesheet App – now available in Spanish – for free.