ARB CASE NO. 00-042
ALJ CASE NO. 1999-SCA-18
DATE: January 25, 2002
In the Matter of:
UNITED KLEENIST ORGANIZATION
CORP. and YOUNG PARK,
Petitioners.
Re: Dispute concerning payment of prevailing
wages, fringe benefits and overtime pay, and de-
barment for labor standards violations with respect
to DOT Contract No. DTFA09-95-C-25005.
Nevertheless, Wilson completed her computations using the information available and concluded that Kleenist owed back wages. She then met with Park, explained why his company owed back wages, and requested that he pay them. Park denied violating any laws and refused to pay anything. Tr. 216.
On May 20, 1999, the Administrator filed a complaint against Petitioners alleging that they had failed to pay the wages and benefits required by the SCA, had failed to pay overtime wages as required by CWHSSA, and had failed to keep adequate records as required by the Department's regulations. In the complaint, the Administrator sought an order debarring Petitioners for three years and directing them to pay $25,631.50 in back wages and benefits. Petitioners denied the allegations against them.
The ALJ reviewed this matter consistent with the burden-shifting methodology set forth in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946). Under this standard,
[The employee] bears the burden of proving that he performed work for which he was not compensated. The remedial nature of this statute and the great public policy which it embodies, however, militate against making that burden an impossible hurdle for the employee. Due regard must be given to the fact that it is the employer who has the duty . . . to keep proper records of wages, hours and other conditions and practices of employment and who is in position to know and produce the most probative facts concerning the nature and amount of work performed. Employees seldom keep such records themselves; even if they do, the records may be and frequently are untrustworthy . . . . When the employer has kept proper and accurate records the employee may easily discharge his burden by securing the production of those records. But where the employer's records are inaccurate or inadequate and the employee cannot offer convincing substitutes a more difficult problem arises . . . . In such a situation, we hold that an employee has carried out his burden if he proves that he has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference. The burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee's evidence. If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result be only approximate.
1 This appeal has been assigned to a panel of two Board members, as authorized by Secretary's Order 2-96. 61 Fed. Reg. 19,978 §5 (May 3, 1996).
2 Young Park and Kay Park are not related. Tr. 71.
3 Department regulations require every contractor performing work subject to the SCA to keep payroll records for three years from the completion of the work and to make those records available to authorized representatives of the Wage and Hour Division. Among other things, those records must include the number of daily and weekly hours worked by each employee and any deductions, rebates, or refunds from the total daily or weekly compensation of each employee. See 29 C.F.R. §4.6 (g)(1)(2000).
4 Although Anderson involved back wage awards under the Fair Labor Standards Act, the logic and reasoning underlying the Anderson standard is equally applicable to awards under the SCA and CWHSSA. See generally American Waste Removal Company v. Donovan, 748 F.2d 1406 (10th 1984) Because this is an enforcement action brought by the Wage and Hour Administrator, the initial burden of proving that wages have been underpaid falls to the Administrator. See, e.g., Thomas &Sons Building Contractors, Inc., Order Denying Reconsideration, ARB No. 00-050, ALJ No. 96-DBA-37 (ARB Dec. 6, 2001).
5 The Administrator had assessed Petitioners $4,000 for unpaid salary owed to Randy Kim. However, the ALJ declined to address this issue because it involved "salary owed outside the time of the investigation." D&O at 12. This aspect of the ALJ's decision was not appealed by the Administrator.
6 If the $10.00 hourly rate did not include fringe benefits, then it raises a question as to why Petitioners would pay their employees above the required $7.17 hourly rate. A possible answer was provided by Wilson who testified that one of Kleenist's employees told her that the market rate for janitorial work in the area was $10.00 an hour and that employees would not work for less. Tr. 287.
7 Petitioners also suggest that they did not have to pay for vacations because none of their employees had worked long enough to take one. Although Park testified that he did not recall anyone other than Kim who had worked for him longer than a year, this line of questioning was never developed into an argument. Tr. 298. We decline to address this argument absent a showing that it could not have been raised below.
8 Petitioners' Exhibit 1 is the reconstructed payroll record that Petitioners prepared for the hearing.
9 Petitioners also complain that the ALJ erred in relying on Kim's payroll summaries to conclude that it failed to pay overtime compensation to its employees. Presumably, Petitioners are again arguing that the ALJ should have relied on the time cards instead of the payroll summaries. For the reasons stated earlier in this decision, Petitioners' argument regarding reliance on the payroll summaries is without merit.
10 In connection with its argument on overtime compensation, Petitioners note that Kim was paid a flat rate of $2,000 a month and that, based on their calculations, this wage included all pay and benefits to which he was entitled. Petition at n. 3. This argument not only ignores Kim's testimony that he was never paid for overtime but also ignores the fact that the ALJ found his testimony credible. Tr. 129, D&O at 10.