US cleaning company ordered to pay $1 million in back wages

1st of April 2014
US cleaning company ordered to pay $1 million in back wages

A US cleaning contractor has been ordered to pay its workers more than 725,000 euros (US$ 1 million) in back wages and damages after it went to extreme lengths to avoid paying its cleaners and housekeepers for overtime.

Ward's Cleaning Services in New England - which provides cleaning staff to hotels and restaurants in the Boston area - issued workers with cheques under false names, altered time cards and compensated staff with cash to keep it off the books, a US Department of Labor investigation found.

"It was a sophisticated scheme," said Carlos Matos, district director for the department's Wage and Hour Division.

In some cases, workers were given multiple photo IDs with different names for each hotel they cleaned, he said. A housekeeper might work 40 hours a week under one name, and additional hours at a separate property under a different name - possibly that of a relative or past Ward's employee - in order for the company to avoid paying for overtime.

The employee would get two cheques that week - made out to two different people - and take them to cheque-cashing stores that didn't scrutinize ID's.

Federal law requires overtime pay of at least one-and-half times an employee's regular wage after 40 hours of work in a week.

In response to the investigation, Ward's said it conducted its own audit and found its systems to track staff hours and assignments were "insufficient."

"The members of our administrative team previously responsible for oversight and scheduling have been replaced," Ward's said in a statement.

"Going forward, we are confident that our current approach to tracking staff assignments and hours worked is secure and that this situation will not occur again."

The money Ward's must pay will be spread among 149 people, with the largest payout set at 31,000 euros ($43,000) and the lowest at 29 euros ($40).



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