Recently, the U.S. Department of Labor (DOL) recovered $538K in back wages and other damages from an aviation maintenance and repair staffing agency in overtime violations. The staffing agency supplies aviation repair workers to nationwide airline companies. The DOL’s Wage and Hour Division (WHD) found that the staffing agency illegally reduced pay rates during overtime hours. Indeed, the WHD continues to ramp up efforts to protect worker’s wages and entitlements. Earlier in 2022, the DOL recovered over $2 million in fines from wage and hour violations across four separate cases.

What the Wage and Hour Division Does

Created in 1938 with the enactment of the Fair Labor Standards Act (FLSA), the WHD enforces federal minimum wage, overtime pay, recordkeeping, and child labor requirements under the FLSA. In order to ensure employers succeed in their compliance efforts, the WHD keeps a team of investigators to support the enforcement of the several labor laws applicable to businesses.

Background on the Company’s Overtime Violations

WHD investigators found that staffing agency TechFlyte LLC (the employer) purposely underpaid contracted aviation maintenance and repair workers, amounting to significant overtime violations. According to the investigators, the employer illegally reduced overtime pay rates during hours worked over 40 in a week. Additionally, the employer allegedly labeled a portion of the employees’ wages “per diem” (in which an employee is paid per day, as opposed to by the hour) in order to hide their true rate of pay. Overall, the employer’s actions violated FLSA laws regarding overtime and recordkeeping. In total, the employer denied 129 workers of earned wages.

Back Wages, Damages, and Penalties Incurred

As a result of the investigation, the WHD recovered significant back wages and an equal amount in liquidated damages on behalf of the 129 aviation repair workers. In addition, the WHD assessed civil monetary penalties, as well as previous back wages that the employer owed. In sum, the employer must pay:

  • Back wages of $269,038
  • Liquidated damages of $269,038
  • Civil monetary penalties in the amount of $63,196
  • Previous back wages owed from a June 2020 investigation, resulting in $18,755 for 22 workers

WHD’s Closing Comments

The WHD addressed the employer’s illegal deceptive practices as part of their attempt to avoid overtime and recordkeeping requirements. Wage and Hour Division District Director Kenneth Stripling stressed the negative impact of overtime violations on workers, taxpayers, and companies. As Stripling stated, “Using per diem pay practices to avoid or reduce overtime owed to employees … defrauds workers and taxpayers, and hurts law-abiding companies.” Citing various benefits, such as health insurance and injury and illness paid time off that would be stripped of these workers, Stripling continued to stress that, “This practice negatively impacts workers and makes it hard to retain specialized technicians doing vital work for our nation.”