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Utah Attorney’s Office Reportedly Orders Wage Compensation

SALT LAKE CITY — After an exhaustive five-year investigation into the employment practices of several Utah based construction companies, the U.S. Department of Labor has announced that over 1,000 workers have been awarded back wages and damages, according to KSL Utah.

The investigation spawned a lawsuit naming CSG Workforce Partners, Universal Contracting, and Arizona CLA as parties responsible for intentionally employing practices of employee misclassification to avoid paying payroll taxes.

Initially, the investigation was focused on businesses in southern Utah until it was discovered that businesses were responding to a new state law by moving their official LLC’s to Arizona.

The Department of Labor offered the following explanation:

“These construction workers were building houses in Utah and Arizona as employees one day and then the next day were performing the same work on the same job sites for the same companies but without the protection of federal and state wage and safety laws. The companies, in turn, avoided paying hundreds of thousands of dollars in payroll taxes.”

The U.S. Attorney’s Office in Utah, the U.S. Department of Labor, and the Worker Classification Coordinated Enforcement Council were among the entities spearheading the investigation.

The efforts of these agencies paid off as a federal judge declared that the responsible businesses would be required to pay back $600,000 in back wages and assets to employees in addition to a $100,000 civil fine.

With more instances of illegal labor practices being discovered, the Wage and Hour Division in Utah and Arizona have issued communications to statewide employees to contact their offices to report deceptive practices or the need to reclaim back wages.

“We will combat schemes like (the one prosecuted in Utah and Arizona) with every enforcement tool we have, including partnering with other federal and state agencies to ensure that workers are not misclassified as owners or members of LLCs or otherwise,” said U.S. Secretary of Labor Thomas E. Perez in a statement regarding the situation. “Deceptions like these deny workers hard-earned wages, hurt families who depend most on those wages, and leave workers without important protections if they’re injured on the job or laid off.”

Important Legal Information Regarding Utah Employment Laws

Salt Lake City is the largest city in Utah and serves as the state capital, making it a primary focal point of the state economy in regards to employment and business development.

With the city serving such a large role in the state economy, businesses may seek to save on costs by misclassifying employees or blatantly neglecting to pay their earned wages in order to maximize their profitability in the vibrant economy.

However, it is important for all employees to be aware of the protections that are afforded to them under the Fair Labor Standards Act (FLSA) and state statutes to ensure that they will not be taken advantage of and receive all the employment benefits they are entitled to.

Included in these protections is the existence of the state minimum wage which currently stands at $7.25 an hour with minor exceptions for tip based and underage training employees.

Under FLSA, all employees – unless properly meeting exemption standards – must be paid 150% of their standard wage for all work hours exceeding 40 per 7-day work week. This is one of the most frequently abused FLSA rules as unless employees come forward, it is difficult for government agencies to discover misclassification or deceptive wage and labor practices.

If you believe that a past or current employer violated regulations enforced by FLSA or any state statutes, you should contact an attorney immediately to determine if you are eligible to file a lawsuit that will work to win compensation for all withheld past wages, call today at (855) 754-2795.

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