Labor dept. says biz owes MI workers $1.5M

The U.S. Department of Labor has filed suit in the U.S. District Court, Eastern District of Michigan against ProCorp LLC – owner Timothy Schultz and operations manager Nichole Shaffer – seeking an injunction and more than $1.5 million in overtime back wages and liquidated damages for approximately 700 drivers employed by the company.

An investigation by the Department’s Wage and Hour Division (WHD) alleges the company violated the Fair Labor Standards Act (FLSA) by misclassifying drivers, who move new vehicles among different yards throughout the metro-Detroit area, as independent contractors. This misclassification led the employer to pay straight time for all the hours the employees worked, failing to pay overtime when they worked more than 40 hours in a workweek.

The complaint also alleges recordkeeping violations for the employer’s failure to maintain complete time and pay records for several weeks during the investigative period. Investigators found violations at another company Schultz owned prior to this investigation.

“Employers that willfully violate federal wage laws must be held accountable, pay their employees the wages they have legally earned, and keep payroll records as required by the law,” said Wage and Hour Division District Director Timolin Mitchell. “We encourage all employers to contact the Wage and Hour Division to better understand their responsibilities so that they can avoid similar violations. They should use the results of this investigation as an opportunity to review their own practices to make sure they comply with the law.”

The Department offers numerous resources to ensure employers have the tools they need to understand their responsibilities and to comply with federal law, such as online videos, and confidential calls to local WHD offices.

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Employers who discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program. Information is also available at https://www.dol.gov/agencies/whd.

WHD’s mission is to promote and achieve compliance with labor standards to protect and enhance the welfare of the nation’s workforce. WHD enforces federal minimum wage, overtime pay, recordkeeping and child labor requirements of the Fair Labor Standards Act. WHD also enforces the Migrant and Seasonal Agricultural Worker Protection Act, the Employee Polygraph Protection Act, the Family and Medical Leave Act, wage garnishment provisions of the Consumer Credit Protection Act and a number of employment standards and worker protections as provided in several immigration related statutes. Additionally, WHD administers and enforces the prevailing wage requirements of the Davis Bacon Act and the Service Contract Act and other statutes applicable to federal contracts for construction and for the provision of goods and services.

The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.

U.S. Department of Labor news materials are accessible at http://www.dol.gov. The department’s Reasonable Accommodation Resource Center converts departmental information and documents into alternative formats, which include Braille and large print. For alternative format requests, please contact the department at (202) 693-7828 (voice) or (800) 877-8339 (federal relay).

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