Over $78,000 in Back Wages and Penalties for FLSA Violations By Furniture Making Companies

Monday, July 8, 2013
The U.S. Department of Labor has obtained a consent judgment in federal court ordering furniture designer S.O.L.E. Design Inc., manufacturer Best Upholstery Inc. and company officers Linda Le and Minh Tran to pay 21 current and former employees $72,472 in back wages and liquidated damages, plus more than $6,000 in penalties. The judgment comes after an investigation by the department’s Wage and Hour Division found the company willfully violated the Fair Labor Standards Act’s overtime, minimum wage and record-keeping provisions.

Investigators found that employees were paid straight time for all hours worked and did not receive an overtime premium for hours worked beyond 40 in a workweek, as required by the FLSA. Additionally, several employees working as upholsterers were paid piece-rate wages, which amounted to less than the federal minimum wage in some workweeks. Investigators also found that the employers paid some wages in cash and off-the-books, and falsified payroll records by excluding overtime hours worked by the employees, in violation of the FLSA’s record-keeping provisions.

S.O.L.E. Design and Best Upholstery work collaboratively to design and manufacture home furniture that is sold to several major national retailers. The companies operate out of the same facility located in El Monte and constitute a single enterprise for purposes of FLSA coverage. The consent judgment, approved by the U.S. District Court of the Central District of California, holds both companies and their officers jointly and severally liable for the payment of $36,236 in back wages, plus an equal amount in liquidated damages, to the affected employees, and an additional $6,468 in civil money penalties assessed by the department. Additionally, the judgment permanently enjoins the defendants from committing future violations of the FLSA.

The judgment also orders the defendants to implement specific practices to ensure FLSA compliance, including maintaining accurate time and payroll records reflecting all hours worked and all compensation paid to employees. Furthermore, defendants may not falsify timecards, require or cause employees to sign inaccurate timecards, or require employees to work off-the-clock.

The defendants must also display a notice of the department’s findings and the court’s order in both English and Spanish in areas highly visible to employees.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 per hour, as well as one and one-half times their regular rates for every hour they work beyond 40 per week. The law also requires employers to maintain accurate records of employees’ wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law. The FLSA provides that employers who violate the law are generally liable to employees for their back wages and an equal amount in liquidated damages, which are paid directly to the affected employees.
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