Employer pays $1.5 million over wage miscalculations

More than 700 workers reportedly affected

Employer pays $1.5 million over wage miscalculations

Federal investigators have collected $1,158,536 in back pay for overtime worked by 710 employees of a recreational vehicle company in Elkhart, IN.

For over two years, the employer incorrectly computed overtime compensation for piece-rate employees. The Wage and Hour Division of the United States Department of Labor discovered that Alliance RV LLC paid less per piece in weeks when workers worked more than 40 hours.

Employees received less overtime compensation than they were entitled to under the Fair Labor Standards Act as a result. Alliance pays piece wages to assembly line workers who build recreational travel trailers, towable trailers, and fifth-wheel campers under the Paradigm, Valor, and Avenue brand names.

Basic pay requirements under the Fair Labor Standards Act

The Act requires employers to pay covered employees who are not otherwise excluded a minimum wage of at least $7.25 per hour.

During the first 90 consecutive calendar days of employment with an employer, youths under the age of 20 may be paid a minimum wage of not less than $4.25 per hour. Additionally, employers may not fire employees to recruit someone at the juvenile minimum wage.

Employers may pay employees on a piece-rate basis as long as they are paid at least the legal minimum hourly wage rate and overtime for hours worked more than 40 in a workweek. Employers of tipped employees (those who get more than $30 in tips per month) may count such tips as part of their salary, but they must pay a direct wage of at least $2.13 per hour if they claim a tip credit. They must also fulfill several additional criteria.

The Act also permits the employment of specific individuals at wage rates below the statutory minimum wage under certificates issued by the Department of Labor:

  • Student learners (vocational education students);
  • Full-time students in retail or service establishments, agriculture, or institutions of higher education; and
  • Individuals whose earning or productive capacities for the work to be performed are impaired by physical or mental disabilities, including those related to age or injury.

Federal officers remind employers of duties

“No matter how they pay, employers must ensure that they comply with overtime obligations and compute overtime wages correctly,” said Jessica Looman, Principal Deputy Wage and Hour Administrator.

“These recovered back wages are significant and will go a long way to help these workers. We are glad that Alliance RV has now changed its practices to ensure they pay their workers correctly.”

Employers are responsible for ensuring that their pay practices are in accordance with federal law, and that workers are paid at least the federal minimum wage and overtime for hours worked more than 40 in a workweek.

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