Wiljo Interiors was sub-contracted by prime contractor Cherokee CRC LLC to work on a $2.9 million federally-funded construction project at the Riverside Indian School in Anadarko, Oklahoma. Wiljo Interiors then brought in an additional sub-contractor, Strong Rock Drywall LLC, of Tulsa, Oklahoma, misclassified its owner and workers as independent contractors, yet dictated what they would pay them. Strong Rock also failed to pay its employees as required by law, but their work was directed and controlled by Wiljo. Therefore, the division found there was a joint employment relationship between the two employers, holding both employers responsible, both individually and jointly, for compliance with the Fair Labor Standards Act (FLSA).
Strong Rock Drywall employees worked 50 to 70 hours per week, but since they were misclassified as independent contractors, were paid only straight time for all the hours they worked, being denied legally-required overtime for hours beyond 40 per week. Employees were also denied fringe benefit payments required on this federally-financed contract under the Davis Bacon Act.
Wiljo Interiors, Inc. paid $208,756 in overtime back wages, prevailing wages and fringe benefits to 178 Strong Rock construction workers to remedy the violations. Additionally, the company acknowledged they were the controlling employer and committed to properly classifying workers as employees, using the correct job classification when determining workers’ prevailing wage rates and paying fringe benefits required by law in the future.
“When a joint-employment relationship exists, we will hold those companies accountable when wage violations occur and workers are cheated,” said Betty Campbell, acting regional administrator for the Wage and Hour Division in the Southwest. “Simply labeling a worker as an independent contractor does not mean they are not truly an employee. Misclassified employees are not only denied fair wages, they are also denied access to critical benefits and protections. The Wage and Hour Division is vigorously pursuing corrective action in those situations when workers are, in fact, employees to ensure that they are paid their legally-required wages and to level the playing field for employers who play by the rules.”