DOL Wins $1.3 Million In Back Wages For 14,500 kgb USA Workers

Filed under: FLSA,Labor,Legal,News,Wages & Hours,Working Conditions |

Thousands of home workers employed by kgb USA were misclassified as independent contractors and and paid less than minimum wage, a federal judge ruled.

A federal judge ordered kgb USA Inc., the world’s largest independent provider of directory assistance and enhanced information services, to pay $1.3 million in minimum wage compensation to 14,568 current and former employees nationwide for violations of the Fair Labor Standards Act (FSLA).

The workers, who were hired to respond to text messages from customers, were home workers located throughout the United States.

Judge Rules Against kgb USA

Judge James Knoll Gardner of the U.S District Court for the Eastern District of Pennsylvania entered a consent judgment and order against kgb USA, which agreed to the terms. Kgb USA is headquartered in Bethlehem, Pa.

An investigation found kgb USA misclassified employees as independent contractors, paying them a piece rate based on the numbers of text messages and inquiries they responded to, regardless of the number of hours they worked.

FLSA violations resulted when piece rate earnings failed to yield at least the federal minimum wage of $7.25 per hour.

“Misclassification of workers as independent contractors is a serious threat to their livelihood,” said acting Secretary of Labor Seth D. Harris.

“Misclassifying workers also undercuts responsible employers who must compete with unscrupulous employers who do not obey the law,” Harris said.

The investigation also revealed kgb USA did not keep accurate records of employees’ hours worked, in violation of FLSA requirements.

Under the terms of the consent judgment, the company is ordered to pay the back wages found due in full and is enjoined from violating the FLSA in the future.

The agreement requires compliance with all FSLA minimum wage, overtime and record-keeping provisions.

It also specifies that kgb USA shall not classify any worker as an independent contractor unless the worker is a bona fide independent contractor who does not meet the definition of an employee under the FLSA.

For more information about whether a worker is an employee under the FLSA visit http://www.dol.gov/whd/regs/compliance/whdfs13.htm.

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