Three subcontractors that worked on a project to expand electric vehicle maker Rivian’s Normal, Ill., manufacturing plant have reached a settlement with the state attorney general’s office and Illinois Dept. of Labor over allegations they failed to pay workers for overtime labor.
Guangzhou Mino Equipment Co. of China, IT8 Software Engineering S.L. of Spain and Mexico-based LAM Automation, which were all hired on a project at the plant, used a complex subcontracting arrangement to avoid paying overtime wages to 54 workers brought in from Mexico on work visas, Illinois Attorney General Kwame Raoul announced on Dec. 21. LAM was responsible for paying the workers, but Mino and IT8 had control over their work and employment conditions.
Illinois law requires time-and-a-half pay for each hour beyond 40 worked in a week. State investigators found the laborers typically worked seven days per week, between 60 and 80 hours, but they were not paid full overtime wages, officials say.
Mino and IT8 will each pay $145,000 and LAM will pay $100,000 in back wages and penalties to resolve the allegations. The total $390,000 represents about 270% of the overtime wages the employees would have received, state labor department officials say.
As part of the settlement, the companies also agreed to obtain certifications from any future subcontractors they work with in Illinois to guarantee they’ll obey state laws, and to provide detailed wage statements to employees.
“It is sad that in the year 2021 we have contractors going to extreme lengths to intentionally break the law,” Mike Raikes, business manager of IBEW Local 197, said in a statement. “These contractors knew they were illegally bringing in foreign workers, paying less than area standards and benefits, no overtime pay and hurting our local workers, contractors and economy by doing so.”
Mino and IT8 specialize in automotive manufacturing. Both list major U.S. automakers among their clients.
Rivian produces its R1 electric pickup trucks and SUVs, plus commercial vans, at the Normal plant near Bloomington, Ill., a former Mitsubishi factory that the startup automaker acquired in 2017. The EV maker has plans to further expand the plant by 623,000 sq ft, to a total of about 4-million sq ft.