Employer Coerced Kickbacks from Employees after Wage Action

Workplace violations, discrimination, whistleblower retaliation lawyers Helmer Friedman LLP.

Sparklean Laundry Fined Nearly $400K for Labor Violations

A real estate company, Sparklean Laundry, was found guilty of coercing its employees to pay kickbacks on wages that were initially recovered for them. The company was ordered to pay over $281,000 in damages for this act, and an additional $100,000 for retaliating against its employees who were exercising their labor rights. Benjamin Piper, who owned Fox Real Estate Group, Inc., the parent company of Sparklean Laundry, was also ordered to pay the damages.

The U.S. Department of Labor announced the order, which resulted from an earlier case where Fox Real Estate Group, Inc. refused to pay overtime to about 80 employees in violation of the Fair Labor Standards Act (FLSA). The FLSA is a law that protects workers against certain unfair pay practices, and it sets out labor regulations regarding employment across states, including minimum wages, overtime pay requirements, and child labor limitations. Passed in 1938, the FLSA is one of the most critical laws that employers need to understand, as it sets out a wide array of regulations for dealing with employees, whether salaried or paid by the hour.

After an investigation by the Department of Labor, Fox Real Estate Group, Inc. agreed to pay back the overtime wages it had refused to pay earlier. However, the company demanded kickbacks from the employees later and submitted fraudulent receipts purporting to show that the employees had received their recovered wages. The company also threatened the employees.

“Workplace retaliation is intolerable and illegal,” said Regional Solicitor of Labor Marc Pilotin in San Francisco. “The Department of Labor will use all of its tools to combat retaliation, including through requiring employers who retaliate to compensate workers above and beyond the wages their workers are owed.”

The Department of Labor recovered thousands of overtime wages for the employees, and one of the employees received nearly $7,000. However, the court order is making the company pay double the amount of wages to the employees. As a result, the employee will receive a total of nearly $14,000.

Employers and workers can call division staff confidentially with questions, regardless of where they are from, and the department can speak with callers in more than 200 languages through the agency’s toll-free helpline at 866-4US-WAGE (487-9243).

“This was a clear case where punitive damages were appropriate against the employer, which both violated federal law and broke its promises to the department,” Pilotin added.