Issaquah drywall firm ordered to pay $550,000 in back wages

SEATTLE (Feb. 21, 2014) — The U.S. Department of Labor has obtained a consent judgment from the U.S. District Court ordering Issaquah-based drywall installer Summit Drywall Inc., and its owner Thomas Kauzlarich, to pay $550,000 in overtime back wages and liquidated damages to 384 current and former employees. The judgment resolves an investigation and subsequent lawsuit by the department that found the company violated the Fair Labor Standards Act’s overtime and record-keeping provisions from Oct. 15, 2009, through April 15, 2013.

“This is a victory,” said Janet Herold, the department’s regional solicitor in San Francisco. “In this region, long hours and low wages are prevalent in the drywall industry. This consent decree sends the unambiguous message that the department will not permit the underpayment of workers’ wages in piece-rate schemes, such as those at issue here.”

The Seattle District Office of the department’s Wage and Hour Division established that Summit Drywall failed to pay employees overtime at time and one-half their regular rates of pay for all hours worked beyond 40 in a workweek, as required by the FLSA. Investigators also found that employees working as drywall hangers and tapers were paid on a piece-rate basis and were not compensated for all hours worked, including time spent traveling and transporting equipment to the job site. This resulted in additional violations of the FLSA’s overtime requirements. Additionally, the employer failed to keep accurate and complete records of hours worked, as required.

In addition to requiring the payment of $275,000 in back wages and an equal amount in liquidated damages, the consent judgment requires specific action on the part of the employer. If the employer chooses to use a piece-rate compensation system, the employer must calculate the piece earnings on an individual basis. The employer must maintain accurate records of hours worked and must provide its employees the documentation of their hours worked with each paycheck and the regular rate on which their weekly wage is calculated. The employer must also provide training to all employees on the requirements of the FLSA. Summit Drywall has agreed to take steps to promote awareness in the drywall industry of employers’ obligations under the FLSA by agreeing to write and submit an article to appear in an industry publication that addresses the obligations of drywall employers under the FLSA. The article will promote a code of conduct that includes adherence to employment law.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour, as well as time and one-half their regular rates for every hour they work beyond 40 per week. The law also requires employers to maintain accurate records of employees’ wages, hours and other conditions of employment. The FLSA also prohibits employers from retaliating against employees who exercise their rights under the law. The FLSA provides that employers who violate the law are generally liable to employees for their back wages and an equal amount in liquidated damages, which are paid directly to the affected employees.

The department was represented by its regional Office of the Solicitor in Seattle. For more information about the FLSA, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243) or its Seattle office at 206-398-8039. Information also is available at http://www.dol.gov/whd.