Misclassification yields million-Dollar settlement for janitors — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

A federal judge recently gave final approval to a settlement of a wage-and-hour lawsuit involving 500 primarily Latino janitors in San Antonio, Dallas and Chicago.

Judge Amy St. Eve of the U.S. District Court for the Northern District of Illinois approved a $1,138,000 settlement compensating workers who were employed through Contract Cleaning Maintenance Inc., a janitorial services company. Attorneys’ fees and other costs will double Contract Cleaning’s tab.

In 2003, a group of Contract Cleaning workers sought the assistance of the Service Employees International Union (SEIU). Although the workers were not members of the union, the SEIU helped them file suit under the Fair Labor Standards Act, the Racketeer Influenced and Corrupt Organizations, or RICO, Act and the Employee Retirement Income Security Act. According to the suit, Contract Cleaning misclassified the workers as independent contractors to avoid paying them overtime and made unlawful payroll deductions, which the company used to pay workers’ compensation premiums.

According to the settlement, 130 Illinois plaintiffs will receive $727,000, and more than 300 Texas plaintiffs will receive $411,500. The defendants also agreed to pay $1.1 million in attorneys’ fees and $150,000 in costs to administer the settlement.

Final note: This is one example of the aggressive tactics currently being utilized by the union movement. As union membership wanes, organized labor is looking for ways to increase the number of union workplaces. No doubt, the janitors who benefited from this settlement will view the SEIU as an attractive labor partner in the future.

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