Parts Authority, Diligent Delivery Systems treated workers as independent contractors
PHOENIX – A national auto parts distributor and an Arizona logistics firm that misclassified 1,398 drivers as independent contractors will pay them a total of $5.6 million in back wages and liquidated damages after the U.S. Department of Labor obtained a consent judgment in federal court.
The U.S. District Court for the District of Arizona has ordered joint employers Parts Authority Arizona LLC and Arizona Logistics Inc. – operating as Diligent Delivery Systems – to pay $2.8 million in back wages and an equal amount in liquidated damages to affected employees. The consent judgment also orders Parts Authority and Diligent Delivery Systems and its owner Larry Browne, to pay $150,000 in civil money penalties.
The Nov. 17, 2022, judgment obtained by the department’s Office of the Solicitor in San Francisco also required Parts Authority to treat their delivery drivers as employees.
The action comes after the department’s Wage and Hour Division found that by misclassifying employees, the company failed to meet minimum wage requirements, paid straight-time rates for all hours worked, failed to pay at time and a half for hours over 40 in a workweek, and failed to keep required timekeeping records. The company also required employees to use their personal vehicles for deliveries without compensation. By doing so, the employers denied their drivers’ rights under the Fair Labor Standards Act.
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