$498,604 in Back Wages and Liquidated Damages Paid By Company Which Violated FLSA

Friday, May 17, 2013

Lucca Freezer & Cold Storage Inc. has agreed to pay $498,604 in back wages and liquidated damages to 1,720 employees. An investigation by the U.S. Department of Labor’s Wage and Hour Division found that the company utilized Quickstuff LLC, a temporary employment agency, to obtain workers for its Vineland facility, but failed to properly compensate these employees for all hours worked, in violation of the Fair Labor Standards Act’s minimum wage, overtime and record-keeping provisions.

Lucca Freezer & Cold Storage is a produce storage and packaging facility that provides services for produce growers and businesses nationwide, including Walmart Stores Inc., Del Monte Fresh Produce Inc., Dole Fresh Vegetables Inc. and Ocean Spray Cranberries Inc.

A team of investigators from the division’s Southern New Jersey District Office conducted surveillance of the facility, reviewed payroll records and employment practices, and conducted employee interviews in English and Spanish to assess compliance with applicable labor standards.

Investigators determined that temporary employees working on the production line at the facility were required to be in the production area of the plant 15 minutes before the scheduled start of the shift to ensure full staffing and receive instructions, but were not paid for those 15 minutes. This resulted in both minimum wage and overtime violations. Temporary employees were occasionally assigned to unload trailers and were paid at a piece rate of $40 per trailer. When they worked in excess of 40 hours per week, the employer impermissibly excluded their piece-rate wages when calculating overtime premiums, thus denying employees proper overtime compensation.

Investigators also learned that Lucca used Quickstuff LLC to obtain temporary workers—as many as 600 people per day. The Wage and Hour Division analyzed the employment relationship between the companies and determined that the affected workers, who engaged in packing and repackaging produce by hand at the Lucca facility under the supervision of its managers, were jointly employed by Lucca and Quickstuff. As a result, both companies are liable for the FLSA violations.

Lucca cooperated with the investigation and has a signed a settlement agreement with the department. The company has paid $249,301 in back wages and an equal amount in liquidated damages to the affected employees. The company also agreed to maintain future compliance with the FLSA.

This investigation was conducted under a multiyear enforcement initiative focused on strengthening labor law compliance in the temporary employment industry throughout New Jersey. Nationwide, the division has conducted approximately 1,000 investigations of temporary employment agencies since 2009, resulting in more than $11.5 million in back wages for more than 1,000 employees.

Investigations conducted under this initiative will continue to focus on identifying and remedying common FLSA violations among temporary employment agencies and the employers using their services. Additionally, the division will continue providing compliance assistance to employers and conducting outreach to workers, community organizations and other stakeholders to inform them of their rights and encourage their participation in promoting industrywide compliance.

The FLSA requires that covered, nonexempt 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. Employers also are required to maintain accurate time and payroll records. The FLSA provides that employers who violate the law are, as a general rule, liable to employees for back wages and an equal amount in liquidated damages.

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