Legal
Ariz. Contractor Faces Big Fines Over Alleged Worker Pay Infractions
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A federal judge has ordered a Tempe, Ariz., plastering and stucco contractor to rectify longstanding worker recordkeeping violations or face weekly coercive fines of up to $10,000.
The May 27 order, issued by US District Court Chief Judge G. Murray Snow against Valley Wide Plastering Inc., its owners and vice president, marks the latest chapter in a long-running effort by the U.S. Dept. of Labor to force firm compliance with the federal Fair Labor Standards Act.
According to court documents, separate department investigations, conducted in 2012 and 2017 into allegations of payroll discrepancies at Valley Wide, found that owners Jesse Guerrero and Rose Guerrero, and vice president J.R. Guerrero, intentionally allowed inaccuracies in the recording of employees work hours.
Examples included filling in false hours or manually altering the number of hours employees recorded without adequate justification. Evidence also suggested that Valley Wide failed to maintain daily time and payment records, including paying wages from non-payroll accounts, and intentionally reduced regular employee rates to give the false appearance of overtime pay.
A February 25, 2021, preliminary injunction, also issued by Judge Snow, ordered Valley Wide to implement a reliable timekeeping system and maintain accurate and complete records of each employee’s gross wages, deductions and net pay. The company subsequently converted from a piece-rate to an hourly wage system, with employees documenting time using a paper-and-pencil system.
Timesheet examinations by federal investigators revealed numerous discrepancies, such as wide variations in individual employees’ hourly rates and inaccurate employee names and signatures that sometimes led to some employees not getting paid. Other timesheets were found to have hours, and even whole days erased, even though Valley Wide employees and vehicles were observed at jobsites during those periods.
Judge Snow agreed to the Dept. of Labor’s request to modify the original injunction with civil contempt sanctions against Valley Wide and the Guerreros.
If violations continue, the company will be required to pay $120,000 in coercive fines every 90 days.
The court also ordered Valley Wide to pay all reasonable attorneys’ fees and investigative costs, and mandated recordkeeping training for company owners, management and staff.
According to Valley Wide’s website, the company was incorporated in May 1980, having previously done business as Guerrero Stucco. Specializing in exterior stucco and interior plastering, the company claims to have worked with most of the Phoenix area’s leading developers and builders.
