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Think you can wait out DOL? Think again

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in Compensation and Benefits

The owner of two Mountain View, CA, transportation companies—Stanford Yellow Taxi Cab and AAA Legacy Limousine—fought a years’-long legal battle against the U.S. Department of Labor’s Wage and Hour Division, arguing that his employees were independent contractors. The DOL wasn’t going to be the first party to blink.

At long last, the owner has agreed that his workers are, in fact, employees—and that they deserve $175,000 in back wages.

Federal investigators concluded the company’s scheduling practices, such as requiring employees to work six 12-hour shifts per week, rendered the workers employees. Drivers were only paid a percentage of the fares they collected, with no minimum wage and no overtime.

In court, the owner admitted he violated the Fair Labor Standards Act’s minimum wage, overtime and recordkeeping provisions. He almost certainly faces tax and workers’ compensation repercussions as well.

Note: The DOL and the IRS are both looking closely at misclassification issues. Review each contract with your attorney to ensure you are in compliance.

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