December 6, 2023

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Auto Parts Distributor, Logistics Firm to Pay $5.6M Over Labor Violations

Auto Parts Distributor, Logistics Firm to Pay $5.6M Over Labor Violations

PHOENIX – A nationwide auto parts distributor and an Arizona logistics organization that misclassified 1,398 drivers as impartial contractors will pay out them a full of $5.6 million in back again wages and liquidated damages soon after the U.S. Department of Labor received a consent judgment in federal courtroom.

The U.S. District Courtroom for the District of Arizona has ordered joint employers Pieces Authority Arizona LLC and Arizona Logistics Inc. – running as Diligent Delivery Methods – to pay back $2.8 million in again wages and an equal total in liquidated damages to affected staff members. The consent judgment also orders Sections Authority and Diligent Delivery Techniques and its proprietor Larry Browne, to pay back $150,000 in civil revenue penalties.

The Nov. 17, 2022, judgment obtained by the department’s Business office of the Solicitor in San Francisco also essential Components Authority to address their shipping drivers as personnel.  

The motion arrives after the department’s Wage and Hour Division identified that by misclassifying staff members, the organization failed to fulfill minimum amount wage needs, compensated straight-time rates for all hrs worked, failed to pay out at time and a 50 {ca2182fc8fed51dc37b95061ee48b5056cde1176732b225548c54a0c0156d303} for several hours in excess of 40 in a workweek, and failed to hold essential timekeeping information. The business also necessary staff to use their particular automobiles for deliveries without compensation. By performing so, the companies denied their drivers’ legal rights beneath the Fair Labor Standards Act.

“Employers cannot stay away from their obligations to fork out the least wage and overtime as a result of contracting with an additional entity to acquire workers,” stated Solicitor of Labor Seema Nanda. “The U.S. Office of Labor will combat misclassification strategies and wage theft through pursuing all the businesses that are dependable for depriving staff of their legal rights beneath the Honest Labor Benchmarks Act.”

The investigation and subsequent litigation coated the periods of April 20, 2012 to March 31, 2020. The division’s Phoenix District Place of work investigated the circumstance and department’s Business of the Solicitor in San Francisco litigated.

“Parts Authority, Diligent Supply Methods and Larry Browne misclassified virtually 1,400 delivery motorists as independent contractors, denying them of their legal rights to least wage, additional time pay back and other advantages and protections,” defined Principal Deputy Wage and Hour Administrator Jessica Looman. “We will continue on to identify and tackle misclassification that not only hurts the staff who are deprived of their wages, but also puts dependable employers at a aggressive downside.”

Launched in 1973, Parts Authority is a top national distributor of automotive alternative pieces, instruments, machines and transmissions. Headquartered in Lake Results, New York, the business has extra than 200 U.S. places.

Diligent Supply Systems has a nationwide headquarters in Houston with 46 destinations nationwide. The corporation serves the automotive, healthcare, retail and e-commerce, oil and fuel, agriculture and other industries.