- The U.S. Department of Labor has ruled that Arizona homebuilder DCO Custom Builders must pay $48,000 in back wages and penalties for misclassifying workers as independent contractors and not paying employees at overtime rates when required — in violation of the Fair Labor Standards Act, according to the Arizona Republic.
- The DOL investigated DCO for two years and ordered the contractor to pay 31 employees $24,255 in unpaid overtime, additional penalty wages and restitution in the amount of $4,604.
- Despite DCO’s actions, a DOL spokesman said the company is now in compliance with fair labor standards, and DCO managing owner Daniel Osete said the company was unaware it was violating a law and has taken internal measures to make sure the same situation doesn’t happen again.
Eric Murray, director of the DOL’s Phoenix Wage and Hour Division office, said misclassifying workers as independent contractors “cheats” employees and taxpayers alike. Murray told the Arizona Republic, “As this outcome shows, we are committed to protecting the rights of construction workers and will use every tool available to hold employers accountable.”
The misclassification of employees has emerged as a heightened area of prosecution, according to legal experts. A 2014 report by journalists at The McClatchy Co. uncovered rampant worker misclassification in the construction industry. The report found that employers often claimed that legitimate employees were independent contractors so they would not have to pay payroll taxes, unemployment or workers’ compensation for them.
Read the full story at AZ contractor ordered to pay $48K in worker misclassification case | Construction Dive