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SOUTHEAST TEXAS RECORD

Thursday, March 28, 2024

DEPARTMENT OF LABOR: Texas Construction Company Pays Back Wages to Misclassified Employees After U.s. Department of Labor Investigation Finds Violations

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U.S. Department of Labor issued the following announcement on Sept. 23.

After an investigation by the U.S. Department of Labor's Wage and Hour Division (WHD), Aztec Construction Inc. – doing business as RSP Aztec Construction Inc. in Spring, Texas – has paid $25,380 in back wages to five employees for violating the Fair Labor Standards Act's (FLSA) overtime requirements.

WHD investigators found the employer classified its employees improperly as independent contractors, leading to overtime violations when the employer paid straight-time rates after employees worked more than 40 hours in a week. The law requires the employer pay time-and-one-half an employee's regular rate of pay for hours the employees work over 40 in a workweek. Aztec Construction also failed to keep required time and payroll records, violating federal recordkeeping provisions.

"Improperly categorizing employees as independent contractors can lead to costly overtime violations that simultaneously short employees and create unfair competition for employers who obey the law," said Wage and Hour Division District Director Robin Mallett in Houston, Texas. "We encourage all employers to review our information online or come to our office for assistance in understanding their obligations under the law."

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