Sensenig Law Firm's Blog

DOL obtains $428,8000 in back wages and damages for FLSA, AWPA/MSPA violations by Hawaiian Farmer – the price of basil is definitely going up this year!

DIRECTLY FROM DOL’s WEBSITE:  

Hawaii’s Fat Law’s Farm to pay $460,000 for FLSA, AWPA & MSPA violations 

HONOLULU — Fat Law’s Farm Inc. has been ordered by a court to pay $428,800 in back wages and liquidated damages to workers after an investigation by the U.S. Department of Labor’s Wage and Hour Division found the Oahu-based employer in violation of the Fair Labor Standards Act’s minimum wage, overtime and record-keeping provisions. The company has also agreed to pay $31,200 in civil money penalties because of deplorable housing, safety and health conditions for workers, in violation of the Migrant and Seasonal Agricultural Worker Protection Act.

“Failure to pay minimum wage and overtime to agricultural workers has become distressingly common when large agricultural actors, such as Fat Law’s Farm, establish a clear system of nonpayment or underpayment of wages,” said Janet Herold, the department’s regional solicitor in San Francisco. “This judgment makes clear that the department will not permit the creation of a second-tier workforce in which coercion, substandard housing and underpayment of wages rule the day.”

Fat Law’s Farm and owners Frank Law, Alice Law and Tim Law, failed to pay minimum wage for all hours worked and did not pay employees overtime at time and one-half their regular rates of pay for all hours beyond 40 in a workweek, as required by the FLSA. The company employed two primary groups of workers. Filipino workers were predominantly paid at $7.25 per hour, with overtime compensation. Workers, mainly from Laos, were paid $5 per hour in cash, without overtime, for 70 hours per week on average. In a consent judgment filed in the U.S. District Court of Hawaii, Judge J. Michael Seabright ordered Fat Law’s Farm permanently enjoined and restrained from violating the provisions of the FLSA.

The department executed a search warrant issued by the U.S. District Court in Hawaii that permitted Wage and Hour investigators to gain access to Fat Law’s Farm.

“The department made use of a search warrant to get an honest snapshot of the pay practices and working conditions established by the employer and the documented effort to hide evidence and witnesses from inspection,” said Juan Coria, acting regional administrator for the Wage and Hour Division in the Western Region. “With the warrant, we obtained unhindered access to employee and payroll documents reflecting names and payment disbursements to workers employed at the farm, including employees paid only in cash. We will continue to protect workers, prevent abuse and enforce labor laws, particularly where workers are vulnerable and violations are so egregious, as in this case.”

Fat Law’s Farm produces and supplies herbs and vegetables in Hawaii and is the main exporter of Hawaiian-grown basil to the U.S. mainland and Canada, which is sold locally by retailers, such as Safeway Inc.
Employers under the MSPA are required to provide safe housing and safe transportation. The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour. Earnings may be determined on a piece-rate basis, but overtime pay must be computed using the employee’s average hourly rate. The law also requires employers to maintain accurate records of employees’ wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law.
For more information about the FLSA, MSPA and other federal wage laws, call the division’s toll-free helpline at 866-4US-WAGE (487-9243) or its Honolulu office at 808-541-1361. Information is also available at http://www.dol.gov/whd.

For more information and the press release as printed above from the DOL, see:  http://www.dol.gov/whd/media/press/whdpressVB3.asp?pressdoc=Western/20140415.xml

COMMENTARY BY CHRISTINE SENSENIG:

With this hefty of an amount due to be paid, pesto sauce is going to become a bit more expensive in restaurants next year due to fewer people picking basil in 2015 at Fat Law Farms.  The AWPA/MSPA have numerous provisions protecting agricultural workers from abusive working conditions, wage violations, and differential treatment.  While the DOL did not necessarily make findings that Fat Law Farms violated a variety of laws, it is significant that Fat Law Farms entered into a consent decree, agreeing to pay back wages and liquidated damages to the tune of $428,800 plus Civil Money Penalties of $31,200.00.   The exposure during litigation may have been worse than the almost half a million dollar payment agreed to by Fat Law Farms, but Fat Law Farms decided to make a business decision and avoid the uncertainty of litigation.

Now is a good time for those in the agricultural industry to review their AWPA and MSPA policies, as well as their minimum wage compliance, to ensure that a friendly visit from the local DOL agents won’t result in fewer basil leaves for the local bar’s herbal martinis, or any other crop for that matter.

The above is not legal advice and there is no attorney client relationship created between the author of this post and the reader.