Contractor settles compensation suit

Pacific Stucco to pay $435,000 to 675 workers for overtime

A Las Vegas contractor has begun making a series of four payments to settle wrongful compensation claims as mandated by a U.S. District Court judge last November, a U.S. Department of Labor investigator said.

Pacific Stucco, a local lath and plastering construction contractor, was ordered to pay a total of $435,000 to 675 current and former employees who were incorrectly compensated with regard to overtime pay, said Dan Ford, an investigator with the department's Wage and Hour Division Las Vegas office.

In a conference call last month, Ford said the settlement followed an investigation that found that the company's lathers, who worked as many as 60 hours a week, did not receive overtime pay.

"Pacific Stucco also failed to properly record the hours of work for these employees, who were paid on a piece-rate basis," the department said in a statement.

The complaint was filed in 2004 in the U.S. District Court in Nevada to collect the back wages due for work performed between June 2001 and August 2006, the department said.

Ford said piece rate, which pays workers based on each unit of work produced, is "a perfectly legitimate way to compensate people," adding that it is common in the construction and manufacturing trades.

However, these workers were paid a standard piece rate for all the hours they worked, including overtime, Ford said.

Under the U.S. Fair Labor Standards Act of 1938, employees must be paid "at least the federal minimum wage and receive overtime at one-and-one-half times their regular rate of pay for hours worked over 40 per week," the department said.

Ford said the employer should have paid the workers one-and-one-half times the piece rate for all hours over 40 hours worked in a week, or a similar hourly figure should have been established for overtime.

"A lot of times employers will keep records of the pieces that are done, but not the hours they worked," he said.

Attorneys representing Pacific Stucco and its owner, Jim Pope, negotiated a deal to pay the settlement in four installments. According to the settlement agreement, the payment schedule of the gross overtime wages is: $149,759 due by Nov. 10, 2006; $95,570 due by Feb. 10; $94,211 due by May 10; and $95,460 due by Aug. 10. Rick Roskelley, the lead attorney representing Pacific Stucco, said the company already has made the first payment.

Ford said the amount each worker will receive varies, ranging from $20 to $3,200. Asked if the company was allowed to negotiate a smaller settlement, Ford said the workers were paid in full.

"That would be all they were due," he said.

Also under the agreement, Pacific Stucco must allow the Wage and Hour Division to provide annual training to company supervisors, foremen and at least one employee representative from each crew for a period of four years, the settlement said.

Roskelley would not comment on the specifics of the settlement negotiations.

"We'll just say it was an amicable, mutually agreeable solution," he said in a phone interview.

Roskelley said Pacific Stucco did not knowingly fail to pay employees overtime, further contending that the company had time records and thought it was in compliance.

The investigation into Pacific Stucco's compensation practices stemmed from a national survey of companies with prior labor offenses, checking which ones were maintaining compliance, said Eric Murray, director of the department's Phoenix district office.

"There's been a prior investigation," Murray said in the conference call, adding that "recidivism is a concern of the agency."

The department found similar problems in Pacific Stucco's pay practices over a two-year period ending in May 1998, the department said. Ford said that investigation found that 81 employees had not been compensated correctly.

Roskelley said he represented the company on that case as well, although no settlement was ordered.

"We do know that because of past investigations, they (Pacific Stucco) were one of a number of companies that were reinvestigated as part of a national study," he said.

Asked about the origin of the workers who were unfairly compensated, Ford said "all the people who are getting back wages have Spanish surnames." Murray said the investigation was not to determine the legal status of the workers, however.

"They're due minimum wage and overtime" regardless of legal status, Ford said. If that were not the case, it would be to the country's detriment, he said.

Murray said just compensation among all statuses ensures that there is a level playing field and that "an employer who is complying with the law won't be undercut by an employer not in compliance with the law."

The Wage and Hour Division office worked with the Consulate of Mexico in Las Vegas and other partners in the Employment Education and Outreach initiative to pursue the case. EMPLEO is a joint effort between business and community organizations, state and federal agencies, and the consulate to help Spanish-speaking workers and employers understand federal and state workplace rights and responsibilities.

"One of the reasons EMPLEO exists is immigrant workers tend to be vulnerable in this work environment," Murray said.

The program is a good way for the department to receive input from a work force segment whose concerns could otherwise go unheard, Ford said.

"A lot of folks (immigrants) weren't comfortable coming to us (directly)," Ford said.

For the time being, Pacific Stucco is no longer under investigation.

"We will assume they will know what compliance means," said Ford.

But Murray said it is possible that the company's practices could be examined in a future survey.

Ford said employers can take proactive steps to ensure their compliance by enlisting the help of the Wage and Hour Division's compliance assistance program.

"It doesn't have to be a hard-nosed, investigative process," he said.

To contact the Wage and Hour Las Vegas office, call 388-6001. For more information on EMPLEO, call (800) 289-1331.