San Juan-based security guard company Optimus Investigations Corp. and its owner Jorge Rivera-Berríos has been ordered to pay more than $166,000 in back wages and liquidate damages to 243 employees misclassified as independent contractors, the U.S. Department of Labor announced Tuesday.
An investigation by the agency’s Caribbean District Office found that the defendants misclassified some employees as independent contractors and violated the Fair Labor Standards Act (FLSA) by not paying legally required overtime to 243 security guards.
The case was filed at the U.S. District Court in San Juan, which ordered the defendants to pay the employees a total of $166,764 — $83,382 in back wages and an equal amount in liquidated damages; refrain from future FLSA violations and retaliation against employees; and provide employees written and oral notice of their FLSA rights in Spanish and English.
If the defendants fail to make the payments, the court can appoint a receiver, who can liquidate the company’s assets and take other action to ensure payment, the agency said.
“This case clearly shows that the Wage and Hour Division will use all available tools to enforce the law, especially in an industry, such as the security field, which has proved to be rife with violations in Puerto Rico,” said José R. Vázquez, the division’s district director for the Caribbean.
“These employees, who are responsible for guarding the safety and security of others, work long hours for low pay and are vulnerable to exploitation. The Wage and Hour Division will continue our effort to combat misclassification and to ensure workers receive a fair day’s pay for a fair day’s work,” he said.
The misclassification of employees as independent contractors often cheats workers out of wages and benefits to which they are entitled under the law, subsequently hurting our economy. Misclassified employees — considered by the employer to be independent contractors or some other nonemployee status — are often denied minimum wage, overtime, workers’ compensation, unemployment insurance and other workplace protections.
Employers often intentionally misclassify workers to reduce labor costs and avoid employment taxes. By not complying with the law, these employers derive an unfair advantage over competitors who pay fair wages, taxes due and ensure wage and other protections for their employees.
These practices lower standards for all workers, especially in highly competitive markets and industries where employers try to reduce overhead — often at the expense of their workers, the agency said.
The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay for hours worked beyond 40 per week.