US Department of Labor files suit to recover unpaid overtime wages, damages for more than 180 shortchanged Coway USA workers

LOS ANGELES – The U.S. Department of Labor has filed a suit in the U.S. District Court for the Central District of California alleging that Coway USA Inc., a Los Angeles-based company that sells, leases and services household appliances, failed to pay overtime wages earned by more than 180 employees, a violation of the Fair Labor Standards Act. 

The action follows an investigation by the department’s Wage and Hour Division that found Coway knowingly shortchanged employees who serviced and maintained company products by falsifying employment records to hide all hours worked by employees. The investigation also revealed that Coway failed to account or pay for time spent by employees on calls with customers, loading and unloading vehicles with products for delivery, trips to the warehouse to pick up inventory and attending mandatory trainings. Additionally, Coway automatically deducted 30 minutes per day for lunch even though employees worked through lunch to meet customer needs or stay on schedule.

In addition to falsifying records, the department alleges that Coway utilized a flawed methodology for purposes of computing overtime pay, further reducing their overtime liability and depriving employees of their overtime wages. 

The division estimates Coway owes hundreds of thousands of dollars in unpaid overtime wages to more than 180 employees. In addition to seeking the recovery of all unpaid wages, the department is seeking an equal amount in liquidated damages. 

“Coway knowingly violated federal law by depriving workers of their hard-earned overtime pay and falsifying the hours they worked,” explained Regional Solicitor Marc Pilotin in San Francisco. “Coway’s violations have to be remedied and the company must be brought into compliance to ensure workers are fully and accurately compensated.”  

“Our investigation found Coway, with brand ambassadors such as Korean pop band BTS, failed to pay more than 180 workers their overtime wages,” said Wage and Hour Division District Director Kimchi Bui in Los Angeles. “Employers can pay by piece-rate based on the number of units employees service, but they must pay overtime using the correct methodology and accounting for all hours worked.”

Based in Los Angeles, Coway USA Inc. is a subsidiary of international household appliance manufacturer Coway Co. Ltd. The company produces water purifiers, air purifiers, bidets, water softeners and mattresses from South Korea.

The Wage and Hour Division’s Los Angeles District Office conducted the investigation. The regional Office of the Solicitor in San Francisco is litigating the case in court.

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. The division can speak with callers in more than 200 languages.

Download the agency’s new Timesheet App for iOS and Android devices – available in English and Spanish – to ensure hours and pay are accurate.