DOL seeks rapid enforcement action against repeat wage offender

What would you do if your payroll checks bounced? Or if you were paid in cash, but less than you were owed? What if you complained about your wages, and your boss threatened you with a gun? Allegations like these can put your employer at risk of a major enforcement action, which can include an injunction against delivering its goods across state lines.

A Pennsylvania laundry service that caters to hotels and restaurants in New York, New Jersey, Pennsylvania and Delaware has been accused of repeated, willful violations of the Fair Labor Standards Act (FLSA). The FLSA guarantees most workers in America the minimum wage and a premium overtime rate, along with other protections for employees. The U.S. Department of Labor’s Wage and Hour Division is seeking decisive corrective action in the case.

According to a Wage and Hour Division investigation, Central Laundry, Inc., (doing business as Olympic Linen and Liberty Laundry) repeatedly bounced its employees’ payroll checks between September 2017 and at least January 2018. It then paid its workers in cash at a cut rate. Astoundingly, when employees complained, yes, the employer allegedly threatened them with a gun.

These allegations come on top of a separate case already in litigation. In that case, a court found that the laundry willfully failed to pay its workers the minimum wage and overtime premium. It also failed to maintain accurate payroll and time records. Under federal law, these workers should have received at least $7.25 an hour for every hour worked. If they worked beyond 40 hours in any given week, they should have received 1.5 times their regular rate of pay. The company is also accused of employing underage workers in prohibited work.

In the new case, the Department of Labor has obtained a temporary restraining order prohibiting the laundry from shipping, transporting or delivering any goods across state lines if those goods were produced by workers who were not paid legally. The order also requires the laundry to comply with the FLSA. The agency plans to seek a longer-term order (called a preliminary injunction) and is scheduled for a hearing on Feb. 2.

This is an unusually robust enforcement action by the Department of Labor. When the agency discovers FLSA violations, it typically engages in a negotiation and settlement process with the employer. In such cases, the employer is usually held liable for all unpaid wages and overtime, along with an equal amount in damages to be paid to the workers.

“This rapid enforcement action will ensure that repeat offenders like Central Laundry are quickly held accountable for their lack of compliance, and will help level the playing field for other employers in the industry who pay their employees properly,” said a DOL regional solicitor.