For Immediate Release - January 27, 2011

AG Coakley's Fair Labor Division Recovered Over $8 Million in Restitution and Penalties From Wage & Hour Violations in 2010

BOSTON - Attorney General Martha Coakley's Fair Labor Division recovered over $8 million dollars in restitution and penalties in 2010 from employers that violated Massachusetts wage and hour laws. Of the $8 million, the Fair Labor Division returned over $4.6 million in restitution to workers and obtained over $3.3 million from employers in penalties returned to the Commonwealth. In 2010, a year which saw countless workers lose their jobs as a result of the state's economic crisis, the Division handled over 5,000 cases, protecting thousands of workers from nonpayment or underpayment of their hard earned wages.

"Particularly in this economy, we have seen workers taken advantage of, causing them to lose out on the benefits and wages that they have rightfully earned," AG Coakley said. "Our enforcement actions are taken not only to protect employees, but to ensure a level playing field and competitive market for all businesses that play by the rules."

In April 2010, the Attorney General's Office reached a supplemental settlement with an Arizona-based trash disposal company to pay over $1.3 million to their workers for not paying the correct overtime and prevailing wage rates. In the settlement, Allied Waste Services of Massachusetts, LLC (Allied Waste), headquartered in Phoenix, Arizona, agreed to pay $1,327,567 in restitution to compensate 350 employees for miscalculated prevailing wage and overtime rates for work performed throughout the Commonwealth. Allied Waste paid over $400,000 in restitution and $50,000 in penalties in a 2009 settlement with the Attorney General for related violations.

In July 2010, the Attorney General's Office entered into a multi-million dollar agreement with Pittsburgh-based FedEx Ground to settle claims that the company misclassified its drivers as independent contractors. Pursuant to the settlement, FedEx Ground agreed to pay more than $3 million back to the Commonwealth and thousands of dollars to 13 truck drivers for whom the original case was brought. The case began in 2007, when the Attorney General's Office cited FedEx Ground for violating the Independent Contractor Law by misclassifying the drivers, failing to provide workers' compensation, not paying overtime to certain drivers, and neglecting to deduct and withhold state income taxes. FedEx Ground appealed the matter to the Division of Administrative Law Appeals (DALA). While FedEx's appeal was pending with DALA, the Attorney General's Office coordinated a joint investigation with the Executive Office of Labor and Workforce Development and the Department of Revenue into FedEx Ground's business practices. The joint investigation revealed that FedEx Ground's misclassification of employees resulted in significant underpayments to the Department of Revenue, Division of Industrial Accidents and Department of Unemployment Assistance.

In August 2010, following a grand jury investigation by the Attorney General, Worcester-based Labor Solutions Inc. and owner Tam Vuong, also of Worcester, plead guilty in Worcester Superior Court on 65 counts of violating Massachusetts wage and hour laws and committing insurance and tax fraud. The court ordered Vuong and his company to pay $500,000 in restitution and that Voung serve 5 years probation. The investigation into Labor Solutions began in April 2008, after various members of the Governor's Joint Enforcement Taskforce on the Underground Economy and Employee Misclassification received complaints alleging that the company was violating Massachusetts wage and hour laws, including failing to pay the mandatory minimum wage. The investigation revealed minimum wage, overtime wage and paystub violations in addition to unemployment insurance fraud and state tax violations.

In September 2010, the Attorney General's Office reached a settlement agreement with LVR Corporation (LVR), a Wakefield sprinkler fitting company, and its president Lawrence Roy to resolve allegations that the company violated the Commonwealth's prevailing wage laws. Under the agreement, LVR will pay $87,000 in restitution to 24 employees. As part of the investigation, the Division discovered that LVR failed to pay prevailing wages to 24 employees for work performed on nine different public works projects during the period of November 2007 through April 2010. LVR also failed to provide true and accurate certified payroll records to various awarding authorities during this time period. Under the settlement agreement, LVR agreed to a voluntary two year debarment from engaging in public works projects in Massachusetts.

The AG's Fair Labor Division enforces various laws that protect workers, including the prevailing wage, minimum wage, payment of wages, overtime, tip pooling, child labor, Sunday and holiday premium pay, and the public construction bid laws.

Workers who believe they may not have been paid the appropriate wages are encouraged to call the Attorney General's Fair Labor Hotline at (617) 727-3465. More information about the wage and hour laws is also available in multiple languages at the Attorney General's Workplace Rights website: www.massworkrights.com.

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