US Department of Labor recovers $139K in overtime back wages, damages for 21 employees after federal court orders employer to comply

9 months ago
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Investigation finds TSTAR Services Inc. misclassified employees as independent contractors

HOUSTON – Following a federal court order, the U.S. Department of Labor has recovered $139,068 in back wages and liquidated damages owed for 21 workers whose Houston employer misclassified them as independent contractors and failed to pay overtime wages.

TSTAR Services Inc. – a cement-cutting contractor – and owners Benjamin Mendoza and Jose Alejandro Mendoza signed a consent judgment and order wherein they agreed to pay employees for overtime pay. The department’s Wage and Hour Division’s investigation determined that when the employer misclassified the workers as independent contractors, they failed to pay overtime when employees worked more than 40 hours in a workweek. In addition, the employer did not maintain records as required.

The company and its owners later claimed they were unable to pay the back wages and refused to do so, which led the department to file suit in the U.S. District Court for the Southern District of Texas, Houston Division. The court then signed the consent judgment and order requiring TSTAR and its owners to pay $69,534 in back wages and $69,534 in liquidated damages to the affected workers. The judgment also enjoins the company against future non-compliance with federal law.

“Employers cannot improperly classify employees as independent contractors to evade federal labor laws,” said Regional Solicitor of Labor John Rainwater in Dallas. “Getting paid for the hours an employee works is a right and employers have a legal responsibility to pay them.”

“The U.S. Department of Labor is committed to ensuring that every employee receives the wages they have rightfully earned and that employers comply with the law,” said Wage and Hour District Director Robin Mallett in Houston. “Misclassification of employees as independent contractors is a priority for the Wage and Hour Division. Employers unsure of their obligations should review their pay practices and use the many tools we offer to assist them. As this case shows, non-compliance has costly consequences.”

TSTAR Services Inc. is a contractor that cuts cement to fix broken water lines and to cut holes for existing pipes. The company operated previously as TSTAR Sawing & Drilling LLC until its incorporation in 2013.

For more information about the Fair Labor Standards Act and other laws enforced by the division, contact the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Workers can call the Wage and Hour Division confidentially with questions – regardless of their immigration status – and the department can speak with callers in more than 200 languages. Learn more about the Wage and Hour Division, and use its search tool if you think you may be owed back wages collected by the division.

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