Investigation continues federal effort to stem wage theft affecting foreign workers
SAN DIEGO – In its continuing effort to combat labor abuses of foreign workers in Southern California’s logistics and warehousing industries, the U.S. Department of Labor has recovered $1.1 million from two companies operating in the San Diego area – Freig Carrillo Forwarding Inc. and ACV Logistics Inc. – for 50 Mexican nationals, some paid as little as $2.43 an hour.
Federal investigators found the employers used affiliates to pay the affected workers in Mexican Pesos by direct deposit each week.
Since 2021, the department has recovered more than $2.2 million from other San Diego employers after the department’s Wage and Hour Division found they used similar labor practices to exploit workers.
The recent recovery comes after the U.S. District Court for the Southern District of California entered a consent judgment and order on March 9, 2023, in which Freig Carrillo Forwarding Inc. and owner, Javier Martin Freig Carrillo must pay $1 million in back wages and damages to 35 workers, $400,000 of which must be paid within 15 days with monthly payments of $16,928 for three years. The employer must also pay $26,215 in civil money penalties for its egregious violations of the Fair Labor Standards Act.
“The department’s ongoing work in this industry along the Southern border puts other U.S. employers on notice that we will not tolerate these kinds of exploitive labor practices,” said Solicitor of Labor Seema Nanda. “An employee’s citizenship has no bearing on whether the Fair Labor Standards Act’s protections apply to them. We will continue to combat wage theft aggressively on behalf of all workers covered by the statute.”
The court’s action follows a division investigation of Freig Carrillo Forwarding’s pay practices from December 2019 through December 2021 that found the employer denied minimum wage and overtime wages to Mexican nationals working at its San Diego warehouses. On average, investigators determined that the company paid workers as little as $3.24 and that they typically paid workers in Mexican Pesos for workweeks that averaged nearly 45 hours at a flat rate of $180-$200 per week.
Investigators also examined ACV Logistics Inc.’s payroll records from April 7, 2020 to April 6, 2022, and found similar violations and that the company paid some workers as little as $2.43 an hour. The employer and its owner Armando Carrillo agreed to a settlement with the department and paid $70,104 in back wages and liquidated damages to 15 Mexican nationals. In addition, the department assessed the employer $12,105 in civil money penalties for their egregious FLSA violations.
“The enforcement actions announced today are part of our ongoing effort to root out abusive labor practices by employers operating in the customs warehouse industry,” said Principal Deputy Wage and Hour Administrator Jessica Looman. “The idea that some employers are paying people working in the U.S. – regardless of where they call home – an hourly rate equal to the price of a bottle of water is intolerable. All employers should pay their workers working in the U.S. as federal, state and local laws require.”
“The Department of Labor is committed to enforcing all federal labor laws to protect all U.S. workers and to working with its state and local law enforcement partners to ensure that all workers receive the highest applicable minimum wage and all overtime owed,” Looman added.
In addition to ordering the payment of back wages, liquidated damages and penalties, the companies must also immediately change their payroll practices and recordkeeping to comply with the FLSA and provide their workers with information in their spoken language on their FLSA rights.
The division and the Consulate General of Mexico in San Diego are working together to ensure Mexican nationals in the region are aware of their labor rights as U.S. workers, including the right to report labor violations without fear of threats and intimidation.
Headquartered in Mexico in Nogales, Sonora, Freig Carillo Forwarding Inc. is a custom broker company that provides logistic and transportation services for goods traveling between U.S. and Mexico. The company has offices in San Diego and Baja California; Nogales, Arizona; and in other locations in Mexico.
Based in San Diego, ACV Logistics Inc. provides transportation, import-export and international relocation services to industrial, commercial and residential customers in the U.S. In addition to its San Diego headquarters, the company operates offices in Mexico in La Paz, Los Cabos, and Tijuana, Baja California.
Consul General of Mexico Carlos González Gutierrez in San Diego encourages Mexican workers to contact the consulate at 619-231-3847 or at [email protected] for support, consular protection or free legal advice.
The division’s San Diego District Office investigated these cases, and the Office of the Solicitor in San Francisco negotiated the consent judgment on behalf of the department.
To further combat egregious wage violations in the industry, the department will hold an information session on March 21, organized by the Otay Mesa Chamber of Commerce, to educate employers on labor practices.
The division enforces the law regardless of a worker’s immigration status and can speak confidentially with callers in more than 200 languages. For more information about the FLSA and other laws enforced by the division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division.