Leominster manufacturer penalized $1.4M for OT violations
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Editor's note: This story has been updated to include a statement from United Comb and Novelty Corporation, which does business as United Solutions and United Plastics.
Leominster manufacturer United Solutions and a staffing agency it used have been ordered to pay $1.4 million in back wages and damages to 566 employees, as well as $100,000 in penalties to the U.S. Labor Department, after an investigation found that the companies jointly employed and systematically underpaid workers over a three-year period.
A federal investigation by the U.S. Department of Labor’s Wage and Hour Division found ASI Staffing Group Corp., which is also based in Leominster and supplied contract labor to United Solutions, avoided paying employees at its Leominster and Sardis, Miss. plants proper overtime by creating additional company names and logging overtime under these names, paying employees a straight rate for their overtime hours.
Although United Solutions contracted out its labor through ASI, the investigation found that the company was aware that ASI employees were not being paid proper overtime and as a result was found responsible as a joint employer through the Fair Labor Standards Act. United Solutions does business as United Plastics, which is how the labor department cited them.
The investigation also found that the companies failed to keep legally required records logging employees’ hours and pay rates. In addition to the $1.4 million in back wages and damages and the $100,000 to the labor department, the companies will also have to hire expert consultants to create pay and record keeping systems to ensure FLSA compliance, according to a press release.
Most of the entitled employees, who worked as machine operators, maintenance workers, molding technicians, color mixers and quality control workers, worked more than 48 hours a week.
Edward W. Zephir, Jr., president of United Comb and Novelty Corporation, which operates as United Solutions, said in a statement that United was never aware that ASI employees working at United did not receive compensation.
"In connection with its investigation, the Department of Labor has alleged that ASI and United are joint employers. United disagrees with the Department's position. However, to ensure prompt reimbursement to the affected ASI employees and in the spirit of compromise, United has entered into a Consent Judgement and Order, whereby United will ensure that the employees in question are reimbursed for any unpaid overtime. The order reflects no evidence of wrongdoing by United," the statement read. "ASI has agreed to reimburse United for all payments made to rectify ASI's failure to abide by its contract with United and comply with all labor and employment laws and regulations."
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