COMP NEWS – A recent investigation by the Department of Labor found that a Louisiana company misclassified over 300 workers as independent contractors, causing them to withhold $246K in unpaid back wages.

The U.S. Department of Labor has found that the wages of hundreds of painters and drywall workers employed by a Louisiana contractor on construction projects, including work at New Orleans’ Superdome, were tackled for a loss when their employer misclassified the workers as independent contractors, a common industry violation.

Investigators with the department’s Wage and Hour Division found that PL Construction Services misclassified its workers as independent contractors. Many of the employees worked on projects involving Lanehart Commercial Painting – operating as Lanehart – including work at the Superdome. PL Construction Service paid the misclassified workers straight-time rates for all hours, including those over 40 in a workweek which violated the Fair Labor Standards Act’s overtime regulations. They also failed to maintain complete and accurate records of hours their employees worked, another FLSA violation.

Last year, The Department of Labor recovered over $36 million in back wages in the construction industry alone.

“Too often we find workers denied wage protections such as the right to overtime pay and other benefits – including unemployment insurance, workers’ compensation and health insurance – by employers who misclassify them as independent contractors,” said Wage and Hour District Director Troy Mouton in New Orleans. “Our investigation shows the costly consequences employers face when they or their subcontractors fail to comply with the law. When we determine a joint employment relationship exists, the Wage and Hour Division will hold all responsible employers accountable for the violations.”

In fiscal year 2021, the division recovered more than $36 million in back wages for more than 21,000 workers in the construction industry, which is typically among the top three industries where violations are found. In May 2022, the Bureau of Labor Statistics projects about 220,000 construction industry workers quit their jobs, the second highest total since 2012.

To read more about the Department of Labor’s investigation into misclassified workers, click here.

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