Press Release  Staffing Agencies Cited More Than $80,000 for Role in Failure to Pay Lowell Factory Workers

Boston — Three staffing agencies that supplied workers to a reusable bag factory in Lowell have been cited more than $80,000 for their role in a labor scheme that deprived minimum wage and overtime pay to hundreds of workers, Attorney General Maura Healey announced today.

The AG’s Fair Labor Division cited Labor Express, Inc., LNC Labor Services, Inc. and Panha Corp. for numerous wage and hour violations in connection with providing staff to Unwrapped Inc., a reusable bag factory in Lowell.

“These staffing agencies paid subminimum wages to hundreds of vulnerable factory workers,” said AG Healey. “Companies that orchestrate schemes that underpay workers and violate their rights will be held accountable by my office.”

In March, the AG’s Office announced that the company, known as UnWrapped, agreed to pay nearly $1.2 million, including restitution to more than 550 affected workers, to resolve numerous alleged wage and hour law violations and for retaliating against employees.

UnWrapped sells reusable grocery bags to chain supermarkets and many of its workers are paid by staffing agencies. The AG’s Office determined that UnWrapped was a joint employer and that it used Labor Express, LNC Labor Services, and Panha in an attempt to shield itself from liability. The AG’s Office alleged that UnWrapped set the low rates for what would be paid to staffing agencies for workers.

The AG’s Office has cited the staffing companies with the following violations:

Labor Express – $25,000 in penalties for:

Failure to Furnish Records for inspection

Failure to keep true and accurate payroll records from Jan. 5, 2015 to April 22, 2016

Violations of the Massachusetts Earned Sick Time Law

Violations of the Temporary Worker Right to Know Law

Failure to furnish a suitable pay slip

LNC Labor Services – $20,000 in penalties for: 

Failure to keep true and accurate payroll records from Nov. 7, 2015 to Oct.1, 2016

Violations of the Massachusetts Earned Sick Time Law

Violations of the Temporary Worker Right to Know Law

Failure to furnish a suitable pay slip

Panha – $37,500 in penalties for: 

Failure to Furnish Records for inspection

Failure to keep true and accurate payroll records from Feb. 7, 2015 to March 19, 2016

Violations of the Massachusetts Earned Sick Time Law

Violations of the Temporary Worker Right to Know Law

Failure to furnish a suitable pay slip

The AG’s Fair Labor Division investigation into these agencies revealed that they did not comply with laws pertaining to record keeping, furnishing records, temporary worker right to know notices, earned sick time, and pay slips.  

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 Division Chief Cynthia Mark and Investigator Kevin Shanahan of Attorney General Healey’s Fair Labor Division.

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