$500,000 in Back Wages and Civil Money Penalties for Misclassification of Employees and Wage and Hour Violations

Tuesday, May 1, 2012

Judge Susan Richard Nelson of the U.S. District Court for the District of Minnesota entered a consent judgment against Hawkins Tree and Landscaping Inc., a Shakopee company, and its owners, Michael Hawkins and Dawn Hawkins, individually. The judgment orders payment of back wages and liquidated damages in the amount of $478,000 to 57 current and former laborers, drivers, crew leaders and foremen of the company for violations of the Fair Labor Standards Act. Hawkins Tree and Landscaping and its owners also have agreed to pay $22,000 in civil money penalties.

The consent judgment resolves a lawsuit that was filed by the Labor Department in 2010 after an investigation revealed that the company had failed to pay workers time and one-half their regular rates of pay for hours worked over 40 hours in a week. The company also failed to provide adequate records of hours worked and misclassified workers as independent contractors. The company and its owners have conceded all of the violations. Under the consent judgment, the court has entered a finding that the workers were employees of Hawkins and not independent contractors. The judgment also enjoins the company and its owners from any future FLSA violations.

As terms of the consent agreement, Hawkins Tree and Landscaping must retain a certified public accounting firm to conduct bi-annual audits of its pay practices to determine compliance with the FLSA, as well as provide all employees information on the FLSA in English or Spanish.

Under the FLSA, an employment relationship must be distinguished from a strictly contractual one. An employee – as distinguished from a person who is engaged in a business of his or her own – is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business that he or she serves. 

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Additionally, employers must maintain accurate time and payroll records.

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