Henkels & McCoy Inc. attempted to disguise wages as reimbursement payments
BLUE BELL, PA – Following a Pennsylvania federal court order that upheld the findings of a U.S. Department of Labor investigation, oil and gas industry contractor Henkels & McCoy Inc. paid more than $1 million in back wages to hundreds of employees for violating worker protection laws.
The order in the U.S. District Court for the Eastern District of Pennsylvania in Philadelphia led Henkels & McCoy Inc. to pay $1,085,830 in back wages and damages for failing to pay required overtime wages to 362 workers at 11 worksites. The court ordered the national infrastructure contractor to pay $542,915 in back wages and an equal amount in liquidated damages to the affected employees working as machine operators and laborers in Georgia, Connecticut, Pennsylvania, New York and West Virginia.
The lawsuit followed an investigation by the department’s Wage and Hour Division that found the employer violated overtime and recordkeeping requirements of the Fair Labor Standards Act. The division determined the violations occurred during construction of interstate natural gas pipelines and at other natural gas facilities in the five states.
Henkels & McCoy violated the FLSA when the company:
- Failed to pay workers required overtime rates when they worked more than 40 hours in a workweek. These employees averaged 60-hour workweeks.
- Failed to include daily lump sum payments made to workers when calculating their overtime rates. The employer characterized these payments as “per diems,” despite the fact that they had no relationship to any actual travel or work-related expenses.
- Paid operators a daily lump sum characterized as “truck rental pay,” but again failed to include these payments in operators’ regular rates when calculating their overtime pay. The employer paid these lump sums to operators for each day they worked, regardless of whether the operators actually used their personally owned vehicles for any work-related purposes.
- Failed to keep accurate records of employee travel or work-related expenses, when employees used personally owned vehicles for any work-related purposes.
“Hard-working employees in the construction industry deserve to be paid every cent they have earned,” said Wage and Hour Division Principal Deputy Administrator Jessica Looman. “The U.S. Department of Labor holds employers accountable, and we hope that other employers in this industry use the outcome of this investigation as an opportunity to review their own pay practices to ensure they comply with the law.”
“This employer has paid a significant cost for violating the law and for attempting to disguise wages as reimbursements,” said Deputy Solicitor of Labor Elena Goldstein. “This lawsuit demonstrates that the U.S. Department of Labor is committed to protecting workers, and will use every tool at our disposal to do so.”
Founded in 1923 and headquartered in Blue Bell, Henkels & McCoy Inc. is a wholly owned subsidiary of Henkels & McCoy Group Inc. The 11 worksites in the division’s investigation are located in Sweet Valley, Hughesville and Honesdale, Pennsylvania; Montrose and Hopewell Junction, New York; East Granby, Connecticut; Ripley and Culloden, West Virginia and Adairsville, Georgia.
For more information about the FLSA and other laws enforced by the division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may