Two Arizona drywall companies have been instructed to pay a combined $7.4M after denying overtime pay to more than 1,400 employees.
The U.S. District Court for the District of Arizona found that Apodaca Wall Systems Inc. and Empire Wall Systems Inc. had violated the Fair Labor Standards Act (FLSA).
Both companies are based in Phoenix and specialize in interior painting and drywall construction. Hispanic Business magazine featured Apodaca Wall as one of the fastest-growing companies in the U.S.
“Apodaca Wall Systems and Empire Wall Systems exploited hundreds of vulnerable workers and intentionally deprived them of hard-earned overtime wages,” said Wage and Hour Administrator Jessica Looman.
Arizona companies pay for FLSA breach
Arnold, Michael, and Brittany Apodaca own the companies in question. The Wage and Hours Division scrutinized them after it found they “attempted to evade payment of overtime wages by paying hourly employees with multiple checks at straight-time rates for all hours worked.”
It was also discovered that the companies and their owners facilitated cash payments via a labor broker to workers at a straight time rate, despite these individuals working over forty hours in a single workweek.
“Piece-rate workers are entitled to premium pay for overtime hours,” added Western Regional Solicitor Marc Pilotin in San Francisco. “These companies purposely cheated workers and hurt their communities by violating federal law deliberately and are now learning illegal actions like these have costly consequences.”
Both companies will pay $3,725,000 in overtime back wages, liquidated damages, and a $125,000 penalty to the Department of Labor.
The Phoenix District Office of the Wage and Hours Division conducted the investigation, and the Regional Office of the Solicitor in San Francisco obtained the judgment on the case.
Looman concluded that both companies “concocted multiple schemes to evade federal overtime laws and attempted to increase their profits on the backs of their employees. In the process, they made it more difficult for these employees to make a living and provide for themselves and their families.”
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