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A recent U.S. Department of Labor case that resulted in a Utah auto body shop paying more than $47,000 in back wages over violations of the Fair Labor Standards Act (FLSA) serves as an example of why it’s important for shop owners to be cognizant of federal, as well as state, employee laws.
The department’s Wage and Hour Division found that Sandpiper Autobody in Pleasant Grove misclassified 13 technicians as independent contractors and failed to pay them overtime wages as required by the FLSA’s overtime provisions, according to a DOL news release. DOL spokesperson Juan Rodriguez told Repairer Driven News the employer also failed to track all hours worked for some employees and did not record all cash payments made to the employees.
“Illegally paying an employee as an independent contractor strips them of the worker protections and benefits they are due,” said Salt Lake City DOL Wage and Hour Division District Director Kevin Hunt, in the release. “By doing so, the employer reduces a misclassified worker’s pay and denies the worker’s health insurance, worker’s compensation, and unemployment insurance. The employee is also burdened by the responsibility of paying employer tax. And in the long run, misclassification may reduce the Social Security benefit the employee receives in retirement.”
The DOL defines an independent contractor as an individual who performs services but is not an employee of the person utilizing the services. The Wage and Hour Division...
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