Wage and Hour Division (WHD)

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SAN FRANCISCO -- In its fourth consecutive year of a targeted enforcement initiative in the garment industry, the U.S. Department of Labor recovered a total of $398,037 in overtime back wages following investigations of nine garment manufacturers in Saipan. In addition, two security companies, which sub-contract to provide guard services at two of the manufacturing sites, were ordered to pay $42,043 to employees. The Labor Department also levied $205,751 in penalties against three of the companies.

Investigators with the Labor Department's Wage and Hour Division have conducted the planned garment initiative on the island to measure the garment industry's compliance with federal laws regarding pay and work hours. Investigators found five of the manufacturers investigated in violation of the federal overtime provisions of the federal Fair Labor Standards Act (FLSA). During the course of their reviews of the garment-makers, Wage and Hour investigators also discovered instances of under payment of wages by two security sub-contractors operating at the manufacturing sites.

Wage and Hour Administrator Tammy McCutchen said the planned garment initiative is part of a two-pronged effort to encourage compliance by providing technical assistance to employers, and pursuing effective enforcement. "We will not tolerate employees being underpaid by companies who know better," said McCutchen. "We will continue to provide training on the requirements, and to collect back wages and penalties from violators, until compliance improves."

The largest back wage assessment was against N.E.T. Corporation for $235,964 owed to 251 employees because N.E.T. failed to meet its payroll in a timely manner. This is the third investigation of N.E.T. in 4 years and the third time the company has been cited for failing to pay employees. Under the terms of a consent judgment filed in U.S. District Court, the company will pay back wages, $50,000 in civil money penalties, and $76,040 to workers as liquidated damages.

Grace International, Inc. was cited for repeat and willful failure to meet its payroll obligations and has agreed to pay $111,872 in overtime back wages to 144 employees. In addition to back wages, the company was assessed $79,150 in civil money penalties.

Other employers found in violation, the amounts of the back wages found due, and the number of employees underpaid are as follows:

For more information about federal wage and hour laws, call the department's toll-free help line at 1-866-4USWAGE (1-866-487-9243) or contact the Saipan field office at 670-233-0740.

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