A construction company in the northwest suburbs of Chicago agreed to pay back wages to employees after an investigation from the U.S. Department of Labor.

In the course of the inquiry, members of the Wage and Hour Division found that a number of employees, including carpenters, electricians and painters had been misclassified as independent contractors. In violation of the Fair Labor Standards Act, these staff members were denied compensation for overtime.

In addition, the employees were not paid for the time it took to travel between work locations. The employers also altered pay documents to redistribute hours that had been worked in excess of 40.

As a result, the company was required to pay nearly $395,465 in back wages to 96 workers. The District Court also requested that the company designate a compliance officer to communicate with the Wage and Hour Division and provide workers information from the organization. The business also agreed to maintain accurate payroll records.

According to Thomas Gauza, Wage and Hour Division director in Chicago, misclassification is common in the construction industry. The practice is harmful to both to workers and employers who do follow labor laws.

In order to maintain compliance with FLSA, employers need to keep accurate records of employee time, as well as making sure they are correctly categorized based on job duties.

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