$1,197,777 in Back Wages and Penalties for Violations of FLSA

Wednesday, March 12, 2014

The U.S. Department of Labor has obtained a consent judgment in the U.S. District Court for the District of Massachusetts that orders Ward’s Cleaning Service Inc. and David Ward, owner/president, to pay $1,033,877 in unpaid wages and liquidated damages to 149 low-wage employees of the Peabody contract labor provider. The defendants, who provide night cleaning crews, housekeepers and dishwashers to about 85 hotels and restaurants in the Boston area, will also pay $163,900 in civil money penalties and make changes to their payroll system.

Investigators from the department’s Wage and Hour Division Boston District Office found that, from July 2009 through December 2012, the defendants violated the overtime and record-keeping requirements of the Fair Labor Standards Act. Specifically, they failed to pay overtime to the employees who worked more than 40 hours in a workweek, and they concealed nonpayment of overtime through practices, such as directing employees to use multiple timecards with different names, altering timecards, paying employees with checks made out to false names and paying employees in cash.

Under the terms of the judgment, the defendants will hire a qualified independent consultant with specific knowledge of the FLSA to create a payroll system that will ensure that their payroll and record-keeping practices comply with the law. They will submit quarterly reports to the Wage and Hour Division addressing all pay and record-keeping problems found and the actions taken to correct those problems. In addition, the judgment prohibits the defendants from committing future FLSA violations and forbids them from soliciting repayment of the wages and damages from any of the affected employees.

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