Wage and Hour Division (WHD)
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U.S. Department of Labor |
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Owners of defunct 1st National Leasing held liable for minimum wage
and overtime violations, resolving US Labor Department lawsuit
Investigation revealed employees were misclassified as independent contractors
TAMPA, Fla. -- Defunct 1st National Leasing Inc. and owners Robert Wilske and Mike Alexander have agreed to pay eight former telemarketing employees $34,235 in back wages and accrued interest, under the terms of a consent judgment resolving a U.S. Department of Labor lawsuit that alleged violations of the federal Fair Labor Standards Act’s minimum wage, overtime pay and record-keeping provisions.
The Tampa-based company provided leasing and financing options to businesses in need of financial loans. Because the company is no longer in operation, the consent judgment holds the owners personally responsible for full payment of the back wages, which are due in installments over four years to the department’s Wage and Hour Division. The full balance will be due immediately if any of the installments are missed. The Labor Department will distribute the payments to the former employees. The owners also are permanently enjoined from future violations of the FLSA.
The Labor Department filed suit in the U.S. District Court for the Middle District of Florida, Tampa Division following an investigation by the Wage and Hour Division’s Tampa District Office which found that the company had misclassified several FLSA-covered employees as independent contractors. The employees were therefore denied the minimum wage and overtime compensation guaranteed them under the FLSA. The employers also failed to maintain FLSA-required time and payroll records of employees’ wages, work hours and other conditions of employment.
“Our goal is to aggressively enforce the FLSA to ensure that workers are protected against exploitation, and honest employers are provided a level playing field for obeying the law and paying workers their rightful wages,” said Oliver Peebles III, regional administrator of the Wage and Hour Division in Atlanta. “The resolution of this lawsuit demonstrates that the department will use all enforcement tools available, including litigation against defunct companies and their officers, to recover workers’ wages and ensure accountability under the law.”
The misclassification of employees as independent contractors is an alarming trend, particularly in industries that often employ low-wage, vulnerable workers and in which the Wage and Hour Division historically has found significant wage violations. The practice is a serious threat to employees entitled to good and safe jobs, as well as to employers who obey the law. Too often employees are deprived of overtime and minimum wages, and forced to pay taxes that their employers are legally obligated to pay. Honest employers have a difficult time competing against scofflaws. The Labor Department is committed to ensuring that employees receive the pay and benefits to which they are legally entitled, and to level the playing field for employers that play by the rules.
Under the FLSA, an employment relationship must be distinguished from a strictly contractual one. In the application of the FLSA, an employee – as distinguished from a person who is engaged in a business of his or her own – is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business that he or she serves. For more information, visit http://www.dol.gov/whd/regs/compliance/whdfs13.htm.
This case was litigated by the Labor Department’s Regional Office of the Solicitor in Atlanta. For more information about the investigation, contact the Wage and Hour Division’s Tampa office at 813-288-1242. For more information about the FLSA, call the division’s toll-free helpline at 866-4US-WAGE (487-9243). Information is also available on the Internet at http://www.dol.gov/whd.
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