U.S. Department of Labor Wage and Hour Division investigators found that security firm Alpha Guards Management failed to protect fair wages and benefits of 650 guards in Puerto Rico, owing them nearly $350,000 in back wages and damages.
In a release, the federal agency said the firm violated the overtime provisions of the federal Fair Labor Standards Act when it failed to pay one and one-half of each worker’s regular hourly rate for hours worked beyond 40 in a workweek. It also misclassified employees as independent contractors.
Alpha Guards Management Inc. provides security guards to ensure the safety of employees of businesses and government agencies in Puerto Rico. It opened in 2011.
To remedy the situation, the department sought and obtained a consent judgment in a U.S. District Court that requires Alpha Guards to:
- Pay 653 employees $173,847.86 in back wages, plus an equal amount in liquidated damages.
- Not threaten or act adversely against employees for accepting the back wages and damages.
- Not require the employees to pay or kickback any of the wages and damages to Alpha Guards.
- Post FLSA posters in the workplace where employees can see them and notify employees, in a language they understand, of the judgment, its terms and their rights under the FLSA. This must be done within 30 days of the judgment’s entry.
Violation of the terms in the consent judgment can subject Alpha Guards to equitable and legal damages, including punitive damages and a charge of civil contempt. The decision was made by the Federal District Court for the District of Puerto Rico.
“This case shows employers and workers that the Wage and Hour Division will use all available tools to enforce the law, especially in an industry where violations are too frequent and common,” said José R. Vázquez, the division’s district director for Puerto Rico and the U.S. Virgin Islands.
“The practice of misclassifying employees as independent contractors and avoiding payment of required overtime — common in this industry — must cease. This unlawful practice not only harms these workers and their families, but puts businesses who obey the law at a competitive disadvantage,” he said.
Misclassified employees are often denied access to critical benefits and protections, such as overtime, minimum wage, family and medical leave and unemployment insurance. Misclassification also hurts law-abiding businesses that pay workers properly. These employers are at a competitive disadvantage with those who violate the law and avoid their financial responsibilities.
The FLSA requires that employers pay employees a minimum wage of at least $7.25 for each hour they work, and one and one-half their regular rate of pay for each hour worked in excess of 40 in a workweek. Whether a worker is an employee under the FLSA is a legal question determined by the actual employment relationship, not by title.
An employee, as distinguished from a person who is engaged in a business of their own, is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business that they serve.
The Wage and Hour Division’s Caribbean District Office conducted the investigation of Alpha Guards Management. Attorneys Molly Biklen and Summer Silversmith in the department’s Regional Office of the Solicitor in New York City litigated the case for the division, the agency said.