Lowell Reusable Bag Factory to Pay Nearly $1.2 Million for Numerous Labor Violations, Retaliation Against Employees
Alleged Violations of State Minimum Wage, Earned Sick Time Law and Federal Overtime and Child Labor Laws; More Than 500 Workers to Receive Restitution
BOSTON – A Lowell reusable bag factory has agreed to pay nearly $1.2 million to resolve numerous alleged wage and hour law violations and for retaliating against employees, Attorney General Maura Healey announced today. As a result, more than 550 affected workers will receive restitution, some of it in double damages.
“Hundreds of low-income workers were cheated by this employer who we allege tried to evade state labor laws,” said AG Healey. “Our laws ensure that every employee in Massachusetts is paid fairly and these workers will now get back the wages they earned.”
Today’s announcement is the result of a joint enforcement between the AG’s Office and the United States Department of Labor’s Wage and Hour Division.
The company, known as UnWrapped Inc., primarily sells reusable grocery bags to chain supermarkets and many of its workers are paid by staffing agencies. The AG’s Office alleges that the employer used staffing agencies in an attempt to shield itself from liability, asserting that it did not employ the workers.
In a settlement agreement with the AG’s Office, Unwrapped, Inc. and its president Steven Katz, Esq. have agreed to pay $293,170 for alleged violations of state laws including failure to pay minimum wage, failure to provide earned sick time, and retaliation against two workers who cooperated with the investigation.
In a related settlement with USDOL, the company and Katz have agreed to pay $890,021 for alleged violations of federal overtime law, plus a penalty of $8,350 for a violation of federal child labor law.
These settlements resolve allegations resulting from a joint investigation by the AG’s Fair Labor Division and the USDOL that began in April 2016 after the matter was referred by the Massachusetts Council on Underground Economy.
The investigation revealed that between April 2014 and April 2016, temporary workers at UnWrapped were paid at an hourly rate below the state minimum wage. These workers will receive double damages for these violations.
The company allegedly did not have an earned sick time policy and employees and workers were not given access to earned sick time. The Massachusetts earned sick time policy allows for workers to use earned sick time if they (or their child, spouse, parent, or spouse’s parent) are sick or injured or have a routine medical appointment.
Additionally, two employees who cooperated during the investigation were fired until Katz agreed to hire them back and pay them for the hours of work missed.
The investigation also found that there was an 11-year-old child working at the factory and that workers were not paid one-and-a-half times the regular rate for all hours worked over 40 per week, as required by law.
UnWrapped will be paying restitution to all workers on the job site, regardless of whether the company claims that they were employed by a staffing agency. The AG’s settlement also requires that UnWrapped strengthen their recordkeeping practices, as well those of any staffing agency that they work with. UnWrapped is now posting in its facility information on Massachusetts Wage and Hour Laws.
AG Healey’s Fair Labor Division is responsible for enforcing state laws regulating the payment of wages, including prevailing wage, minimum wage and overtime laws.
Workers who believe that their rights have been violated in their workplace are encouraged to call the Office’s Fair Labor Hotline at (617) 727-3465. More information about the state’s wage and hour laws is also available in multiple languages at the Attorney General’s new Workplace Rights website www.mass.gov/ago/fairlabor.
This matter was handled by Assistant Attorney General Jennifer Scully, Investigator Kevin Shanahan and Division Chief Cynthia Mark, all of Attorney General Healey’s Fair Labor Division.