I felt a sense of justice when the court recently issued a default judgment against Skokie Maid for more than $500,000 in unpaid wages and damages for 75 workers the company had misclassified as independent contractors.
From an investigation standpoint, this was a tough case. The employer was not cooperative and was adamant from the start of the investigation, that she truly believed the workers were independent contractors and that she was not in violation of federal wage laws.
As an investigator for the Wage and Hour Division I conduct investigations which can be initiated by a complaint or as part of a initiative program though whatever the reason, we go through the same process to determine the employer’s compliance with the labor laws that we enforce. In this case after interviewing several workers, it seemed very clear that the cleaning workers were not independent contractors operating their own business but employees of Skokie Maid. This was apparent for several reasons:
- As the cleaners from a cleaning company, the company could not argue that the workers were not an integral part of the company.
- The company provided all their cleaning equipment.
- The cleaners were a permanent part of the business, not hired to do a job or two, but had long-term employment and were paid as individuals on a regular basis.
- The employer conducted all hiring, discipline and firing; set hours, wages, and determined clients scheduled and had operational control of employees.
- There was no opportunity for the workers to increase their personal profit or loss from the job.
The misclassification of employees as independent contracts is an alarming trend, particularly in industries that often employ low-wage, vulnerable workers such as cleaning companies.
During the interview process, it is important as an investigator to put the workers at ease, and develop a rapport, as oftentimes they are reluctant to speak out because they fear reprisal. One of the obstacles investigators must overcome is language barriers. I speak Spanish and also worked with an investigator with Polish language skills to interview the workers in this case.
One thing I really try to do is let them know that we are there to enforce the Fair Labor Standards Act to ensure that they are being paid in accordance with U.S. wage laws and that we are not asking them for their own personal documentation but to find out what duties they are performing, how they are being paid, whether or not taxes or other requirements are being withheld from their checks and who directs their work assignments.
If a worker tells us they are being paid in cash that may be a “red flag” indicating that the employer may not be following all required wage laws. This may be especially true if they are not being given documentation of hours worked and withholdings from their pay. In this case, since the employer was classifying them as independent contractors, they were being required to file their own taxes and withholdings.
As part of our normal investigation we review payroll records, time records and conduct employee interviews to corroborate the records..
In this case, the investigation disclosed that workers were not compensated for training, travel time, wait time or time worked over 40 hours per week. Of course, you hope that a company will come into compliance voluntarily and make restitution to workers, but when it cannot be resolved administratively, we will make a referral to the U.S Labor Department’s Office of the Solicitor to determine if legal action should be taken on the part of the workers to restore lost wages and benefits. That was the decision with Skokie Maid.
Growing up in blue collar Chicago neighborhood with parents who came to the city from Puerto Rico as teens, I personally knew many people who worked in low-wage and minimum wage jobs where I am certain they felt at risk in the workplace. What we do in the wage and hour division is to help these workers understand their rights to fair wages and safe working conditions. I really believe in what we do.
When we complete an investigation, I hope the workers come away with a better understanding of their rights in the workplace to fair pay and compensation and that they will be comfortable in the future speaking up for themselves and others and seeking help when violations are occurring.