Type of Action: Fair Labor Standards Act consent order and judgment

Company/Owners: GEM Interiors Inc., Milford, Ohio

Background: On March 13, 2023, Judge Michael R. Barrett in the U.S. District Court for the Southern District of Ohio entered a consent order and judgment against the drywall contractor. Under terms of the settlement, the drywall contractor agreed to pay a total of $265,000 – representing $132,500 in back wages and an equal amount in liquidated damages – to 182 workers.

A U.S. Department of Labor Wage and Hour Division investigation found the Milford company denied its employees proper pay by devising the following schemes:

• Dividing the overtime hours worked by one-third making it appear on payroll records as proper overtime pay while in reality paying straight time at an employees’ regular rate of pay for all hours worked.
• Concealed the overtime straight time pay as ‘reimbursements’ pay.
• Misclassified the workers as independent contractors, which denied them proper overtime compensation.

In response to the order, GEM will repay the wages in 36 monthly installments beginning April 1, 2023. The Milford company will also pay $42,000 in civil money penalties assessed by the department for violations of the Fair Labor Standards Act.

Resolution: Under terms of the consent order and judgment GEM also agreed:

• Not to hire any individual as a purported independent contractor.
• Hire only subcontractors whose businesses are registered in the state where work is being...

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