U.S. Department of Labor officials said Konstrak Builders intentionally violated the Fair Labor Standards Act by paying straight-time to 23 workers when they should have been receiving 1.5 times their salary for overtime hours worked.
“By deliberately misclassifying employees as independent contractors, a Dededo construction company attempted to avoid paying overtime when workers exceeded 40 hours in a workweek until a federal investigation uncovered the scheme,” according to a DOL press release.
The company also failed to keep accurate payroll records.
Konstrak Builders will pay $51,481 in overtime wages to those workers.
In addition to the overtime back wages, WHD assessed Konstrak $10,000 in penalties for the willful nature of the violations.
“When employers misclassify employees as independent contractors for their own gain, they hurt their employees and they even hurt other businesses — the law-abiding employers who don't steal from their employees,” said Wage and Hour Division District Director Terence Trotter, in Honolulu.
“This case sends a clear message that the Wage and Hour Division will use every tool available to protect workers and responsible employers and to ensure everyone has the opportunity to succeed.”
The release states that Konstrak Builders provides maintenance and repair services to Mobil gas stations on Guam. That’s where the majority of the overtime hours were worked during the investigative period, said DOL spokesman Jose Carnevali.