The Department of Labor has obtained a judgment ordering two Arizona drywall and painting companies to pay $7.45 million in back wages and damages after the employers willfully denied overtime pay to over 1,400 employees, according to a department news release.
The Jan. 15 judgment by the U.S. District Court of Arizona followed an investigation by the DOL’s Wage and Hour Division, which found Apodaca Wall Systems and Empire Wall Systems had violated the Fair Labor Standards Act.
The companies, owned by Arnold Apodaca and his children, Michael and Brittany Apodaca, allegedly attempted to avoid paying overtime wages by paying hourly employees with multiple checks at straight-time rates for all hours worked. They also used labor brokers to hire hourly workers, whom they paid in case even if they worked over 40 hours in a workweek, per the department.
The companies, which perform drywall and painting work on commercial jobs, also paid a piece rate based on square feet completed to workers outside the company’s payroll without regard to the actual number of hours worked, the DOL alleged. Crew leads received, then redistributed, the pay to those workers, denying their legally owed overtime pay. In Arizona, workers are entitled to 1.5 times their normal hourly rate for every hour worked over 40 hours in a week.
“Piece-rate workers are entitled to premium pay for overtime hours,” Marc Pilotin, DOL western regional solicitor, said in the release. “These companies purposely cheated workers and hurt their communities by violating federal law deliberately and are now learning illegal actions like these have costly consequences.”
In addition to the payment of about $3.7 million in overtime back wages and an equal amount in liquidated damages, the judgment forces the firms to pay the department $125,000 in penalties.
Apodaca Wall Systems has performed drywall and painting work on banks, churches, entertainment venues, medical buildings, offices, restaurants, schools and retail centers in the Southwest, per its website.
Apodaca Wall Systems did not respond to Construction Dive’s request for comment. Empire Wall Systems has no publicly available contact information, and could not be reached for comment by time of publication.
