HOUSTON – A federal investigation has recovered $166,435 in back wages for 106 workers of a Houston company that misclassified them as independent contractors, which deprived the workers of their full benefits and wages, including overtime.

The U.S. Department of Labor Wage and Hour Division investigators found Majestic Dealership Services Inc. –whose workers detail, valet and wash cars at area dealerships – misclassified their workers as independent contractors, and paid them straight time for all hours worked. By doing so, the employer failed to pay overtime for hours over 40 in a workweek. Investigators also determined the employer did not maintain accurate records as the Fair Labor Standards Act requires.

“Misclassification of workers as independent contractors is an all-too-common violation among employers in Houston and around the nation,” said Wage and Hour District Director Robin Mallett in Houston. “Employers who misclassify workers deny them their full wages, benefits and legal rights; avoid payments of payroll taxes which cheats all taxpayers; and gain an unfair and illegal competitive advantage over employers whose pay practices abide by the law.”

The Wage and Hour Division’s Acting Administrator Jessica Looman recently penned a blog on serious problems that worker misclassification creates for workers, employers and the nation’s economy.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. The division protects workers regardless of immigration status and can communicate with workers in more than 200 languages.

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