The U.S. Department Of Labor Wage and Hour Division announced today the results of an investigation by the Division’s Raleigh District Office that El Club Mexicano Inc., a food distribution company based in Asheboro, North Carolina was guilty of overtime violations, according to the Fair Labor Standards Act. They were found to have misclassified their piece-rate based employees as independent contractors which led some to be paid less than minimum wage and denied employees overtime pay for working over 40 hours. It was found that due to the companies lack of legal responsibility to pay minimum wages and overtime, they owed 47 employees $68,133 in back pay and overtime wages.
It was also determined that the company should pay $68,133 in damages.
Child labor law was broken
During the investigation, they found El Club Mexicano Inc. hired a 14-year-old and 15-year-old to operate their forklift and paper box bailer, a violation of the child labor laws. The U. S. Department of Labor imposed on the company a penalty of $6,638. Wage and Hour Division District Director Richard Blaylock stated the executives of El Club Mexicano Inc. have agreed to pay the fines and back wages in full and bring their company back to compliance with the laws.
El Club Mexicano Inc. produces and distributes spices, herbs, dry peppers, snacks, candies, and other food products national. Their products are sold to restaurants and through outlets like Walmart, Amazon and Sam's Club.
Company shut down last year
The Courier-Tribune reported in July 2016 that El Club Mexicano Inc. had to be closed down by Health Department state inspectors due to high levels of pesticides gases that had employees being rushed to the hospital because they were nauseated and vomiting. Company officials said they had shut down four days earlier and dispensed pesticides to avoid a bug problem from larvae that was discovered in shipments of spices.
Their problem was they did not ventilate the building properly. It cost them more days of being shut down and paying to have an independent contractor come in to check safety levels before the food embargo was lifted and they could reopen.
Director Richard Blaylock stated the company was wrong to file piece-rate employees as independent contractors, and the Department will continue its efforts to protect the American worker by enforcing the rules. Employers must play by the rules to avoid any shut down of their business.
