Bethlehem-based KGB-USA has agreed to pay $1.3 million to settle charges it violated the Fair Labor Standards Act when it misclassified 14,568 workers as independent contractors. The company, which bills itself as the world’s largest independent provider of directory assistance and enhanced information services, paid home workers piece rates of around 10 cents per call to answer text messages from customers.
U.S. Department of Labor (DOL) investigators determined the arrangements with those workers made them employees, not contractors. As a result, they were entitled to earn at least the minimum wage. Investigators also found that KGB-USA failed to keep accurate records of hours worked for its far-flung workforce.
Note: Both the DOL and IRS are on the lookout for worker misclassification violations. If you have doubts about whether you have properly classified workers as employees or independent contractors, consult your attorney.
Find online guidance on the DOL’s website.