ATLANTA – In what may be the largest misclassification case in its history, the U.S. Department of Labor has asked a federal court to force a Florida-based customer service provider for major national brands, including Barnes & Noble, Comcast, Disney and Walgreens, to pay back wages and liquidated damages to more than 22,000 workers after investigators found the employer misclassified employees as independent contractors and denied them their legally required minimum wage and overtime pay.
Today’s filing in the Southern District of Florida in Fort Lauderdale follows an investigation of Miramar-based Arise Virtual Solutions Inc. by the department’s Wage and Hour Division.
The division found the employer often recruited workers with promises they would “be their own bosses” and that they could generate income by providing customer support services to Fortune 500 clients. In fact, investigators determined customer support workers had no real autonomy, were subject to the company’s stringent work scheduling policy, and had to buy their equipment before providing Arise’s clients with service and generating income.
“Our filing seeks to recover back wages and liquidated damages for more than 22,000 employees of Arise Virtual Solutions Inc. based on our finding that the company misclassified these workers as independent contractors,” explained Solicitor of Labor Seema Nanda. “Misclassification is a serious concern that harms many U.S. workers who are denied their full rights, protections and benefits under federal law.”
The department’s complaint alleges that by misclassifying the workers, Arise Virtual Solutions Inc. violated the Fair Labor Standards Act, which requires pay at or above the federal minimum wage and overtime rates of time-and-one-half for hours over 40 in a workweek. The employer also did not keep accurate time and pay records, in violation of the FLSA.
The Office of the Solicitor’s lawsuit seeks full restitution of these wages.
The department’s investigation also revealed that Arise did the following:
Expected workers to pay for their mandatory training while attending courses offered through the company’s proprietary software.
Failed to pay workers for attendance at what often amounted to multiple weeks of required training.
Required workers to create their own corporations or limited liability companies, or join existing business entities, to support the company’s attempts to claim these workers were independent contractors.
Required workers to sign an arbitration agreement waiving their ability to seek restitution for alleged FLSA violations in court.
The division received several complaints of alleged wage violations from former workers at Arise, which is also involved in litigation involving similar allegations brought by the District of Columbia for alleged violations of the district’s labor laws.
Incorporated in Delaware, Arise Virtual Solutions Inc. provides outsourced contact center services, support and consulting and operates in the U.S., Canada and the United Kingdom. It serves the e-commerce, retail, healthcare, travel and hospitality, telecommunications, technology, energy and utilities, insurance, banking and financial services, and fitness and wellness industries.
Learn more about Wage and Hour Division.