| Date: | 05/29/2026 |
|---|---|
| Organization: | Division of Administrative Law Appeals |
| Docket Number: | LB-25-0373 |
On May 28, 2025, the Fair Labor Division issued 4 citations against Petitioners: failure to pay proper overtime ($621,724.98 restitution; $75,00000 penalty); misclassification of employees as independent contractors ($40,000.00 penalty); failure to post sick time workplace notice ($5,000.00 penalty); and failure to keep true and accurate payroll records ($2,500.00 penalty). Subsequently, Petitioners admitted violating the independent contractor statute and the sick time workplace notice statute. But, they still wanted to contest the overtime and record keeping citations.
The parties disagree on the amount of restitution. On January 21, 2026, I ordered Petitioners to state with specificity the amount of restitution they allege is owed to each employee and to provide a copy of their internal audit to the Fair Labor Division no later than February 27, 2026. I also stated: “If Petitioners fail to comply with this order, the amount of restitution calculated for each employee by [the Fair Labor Division] in [the Citation] will be affirmed.” On February 27, 2026, Petitioners provided a copy of an incomplete audit spreadsheet without any of the required supporting documentation or explanation of the spreadsheet itself.
As Petitioners did not state with any specificity what disputed facts required testimony to be resolved, I set a filing schedule for summary decision. I ordered the Fair Labor Division to file its motion no later than April 10, 2026 and ordered Petitioners to file their opposition no later than May 8, 2026.
On March 6, 2026, the Fair Labor Division moved DALA to affirm the citations’ restitution calculations for non-compliance with my order. I gave the Petitioners until March 13, 2026 to respond to the motion. Petitioners filed with the Division and DALA the same audit spreadsheet again with no explanation whatever. On March 16, 2026, the Division again moved DALA to affirm the full restitution of $621,724.98. Petitioners did not reply. On March 26, 2026, I affirmed the overtime citation’s restitution calculations and reminded the parties of the filing schedule, as the overtime citation’s penalty and the inaccurate payroll records penalty remained to be contested.
In accordance with my filing schedule, on April 10, 2026, the Fair Labor Division moved for summary decision on the remaining contested issues. Petitioners have not opposed the Division’s motion.
On May 14, 2026, I ordered Petitioners to oppose the Division’s motion no later than May 22, 2026. I also notified them that, if they failed to oppose it, I would dismiss the remainder of their appeal for failure to prosecute and, as Petitioners bear both the burden of production and the burden of persuasion, all four citations would be affirmed as issued.
Petitioners have not opposed the Division’s motion. Petitioners’ appeal is therefore dismissed for failure to prosecute. This also means that Petitioners have not proven that the citations were erroneously issued, and I must, therefore, affirm the four Fair Labor Division citations as issued.
Division of Administrative Law Appeals
Dated: May 29, 2026
/s/ Kenneth J. Forton
__________________________________
Kenneth J. Forto
Administrative Magistrate
Sent to:
Scott A. Lathrop, Esq.
Barbara Dillon DeSouza, Esq.
