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Feds sue staffing firms, buyers over 800 workers

April 12 2013

The U.S. Department of Labor sued two staffing firms and two buyers in federal court in Salt Lake City seeking unpaid overtime and other damages for more than 800 workers. The agency claims the workers were misclassified as something other than employees.

Named in the lawsuit are staffing firms Universal Contracting and CSG Workforce Partners, according to the Department of Labor. Buyers named in the lawsuit include Decorative Enterprises LLC and Mountain Builders Inc.

The two staffing firms charged both the laborers and buyers a fee for their employment placement services, according to the Department of Labor. However, the workers were misclassified as something other than employees and it was claimed there was no employee-employer relationship.

“Universal Contracting, CSG Workforce Partners and their clients are intentionally skirting the law by willfully and wrongfully claiming that their workers are not employees because they are members or owners in a limited liability company,” said Cynthia Watson, Wage and Hour Division southwest regional administrator for the Department of Labor. “As demonstrated by this lawsuit, the department is vigorously pursuing corrective action in those situations where misclassified workers are actually employees, to ensure that they are paid required wages and to level the playing field for employers who play by the rules.”

The Department of Labor said Universal Contracting and CSG Workforce Partners committed willful violations because the agency previously notified the companies that the workers were employees.

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