Six Gulf Coast staffing agencies have agreed to pay thousands of workers nearly $3.5 million in back wages after U.S. Department of Labor Wage and Hour Division investigators found part of their wages were mislabeled as “per diem” payments as reimbursement for expenses they never incurred, the Labor Department has announced.
Federal investigators found the agencies owed back wages to 3,263 workers—welders, electricians, pipe fitters, and other craftspeople—on maritime vessels and other oil and gas industry projects.
Of the six firms involved, three are headquartered in Louisiana and one has an office in Baton Rouge. They are: Lockport-based Massee Contracting ($909,667 paid to 1,257 workers); Morgan City-based Permanent Workers ($1,110,103 paid to 604 workers); Thibodeaux-based TREO Staffing ($511,877 paid to 428 workers); Alabama-based Flexicrew Staffing, which has a Baton Rouge office ($94,496 paid to 195 workers); Alabama-based Government Support Services Inc. ($474,938 paid to 289 workers); and Mississippi-based Winston International ($390,361 paid to 490 workers).
The Labor Department says its investigation of the firms is part of an ongoing, multiyear initiative aimed at ending an illegal trend of employers labeling part of employee wages as per diem payments, often to avoid overtime, payroll taxes and other costs. Investigators are actively monitoring staffing agencies and other employers in the 1,600-mile Gulf Coast region for signs of this practice.
“Workers don’t often complain about receiving per diem pay in place of regular wages because they believe they make more money being paid this way,” says Wage and Hour Division Administrator David Weil. “The truth is these workers are losing out. They are not getting all of the short- and long-term benefits their employer owes them.”
The Labor Department has more details on the investigation.
