US: Paul Johnson Drywall Inc., an Arizona-based wallboard contractor, has ended its relationship with a labour contractor that misclassified workers as independent contractors, according to the US Department of Labour (DOL). Paul Johnson Drywall agreed to pay US$556,000 in overtime, back wages and liquidated damages to at least 445 current and former employees. It will also take steps to ensure misclassification does not occur again and will pay US$44,000 in civil penalties.
Paul Johnson Drywall had entered into a contract with Arizona Tract to supply wallboard labour. However, Arizona Tract misclassified workers as 'member/owners' and violated overtime and record-keeping provisions of the Fair Labor Standards Act (FLSA), according to the DOL. Paul Johnson Drywall also, prior to being solicited by Arizona Tract, failed to pay proper overtime to employees who were paid on a piece-rate basis. Investigators also found that Paul Johnson Drywall failed to keep complete and accurate records.
The company agreed to take steps to ensure its workers are properly classified and paid as employees and to improve compliance in the construction industry. Paul Johnson Drywall will hire a third-party monitor to ensure compliance and require any wallboard subcontractors to conduct regular training of supervisors and employees regarding the requirements under the FLSA. Paul Johnson Drywall has announced a classification initiative that includes reactivating 1325 workers as W-2 employees and hiring 627 new employees as a first step in its FLSA compliance programme, which was developed in conjunction with the DOL.
"We pride ourselves on having the most professional crews in the state and welcomed the opportunity to evaluate employment practices with the DOL," said Cole Johnson, president of Paul Johnson Drywall. "Our crews allow us to deliver clients unparalleled on-time delivery in the safest manner and as a result of these high expectations, we consistently pay our crews the highest wages. We're excited to be taking our business, as well as our trade and related industry, to the next level."
