Legal
Contractor, Subcontractor on Rivian Project Will Pay Workers Owed Overtime, Illinois AG Says
Third firm facing lawsuit from Illinois state officials
Illinois officials say subcontractor employees who helped build Rivian's EV manufacturing plant in Normal, Il., were denied overtime pay while working 60-80 hours per week.
Photo courtesy of Rivian
A contractor and subcontractor that worked on a project expanding electric vehicle maker Rivian’s Illinois manufacturing plant have agreed to pay $315,000 in unpaid wages and civil penalties as part of a settlement with the Illinois Dept. of Labor and the state attorney general’s office. This is the second agreement related to repaying overtime due on the project.
Guangzhou Mino Equipment Co. of China will pay $170,000 and Florida-based BIW Automotive Solution Inc. will pay $145,000 as part of a consent decree in a case brought by Illinois Attorney General Kwame Raoul’s (D) office, Raoul announced Aug. 23. The payments will cover wages owed to 59 workers from a Mexican sub-contractor who had previously been denied overtime pay.
“These settlements should send a message that employers cannot hide behind subcontractors to avoid responsibility for stolen wages,” Raoul said in a statement.
The Illinois attorney general’s office filed a lawsuit against Mexico-based SDS Industrialservicio S.A. de C.V., which Raoul said was also involved but has refused to cooperate with investigators or settle the case.
The three companies used subcontracting agreements to deny overtime pay to workers, authorities say.
Rivian hired Mino to build assembly lines as it was expanding its plant in Normal, Ill. Mino then subcontracted the work to BIW, which further subcontracted to SDS to obtain a large portion of Mino’s workforce for the project. SDS was responsible for paying the workers, but the other companies had significant control over their working conditions.
As a result, authorities say the employees typically worked seven days per week, totaling 60-80 hours. Under state law, employees must be paid a 150% overtime premium for each hour of work beyond 40 in a week, but authorities say SDS’s employees received no overtime pay.
The amount being recovered from the subcontractor's represents about 150% of the owed wages, according to Raoul's office. Illinois law allows employees to recover up to three times the amount of underpaid wages.
“When employers skirt the law, it harms workers and undercuts law-abiding businesses,” Jane Flanagan, acting director of the Illinois Dept. of Labor, said in a statement.
Illinois lawmakers passed legislation this year that makes contractors liable for their subcontractors’ unpaid wages on most non-union jobs.
This was the second settlement related to subcontracting on Rivian’s Normal plant expansion. In December, Raoul announced Mino and two other subcontractors, Spain-based IT8 Software Engineering S.L. and Mexico-based LAM Automation, had agreed to pay a combined $390,000 in owed overtime wages and penalties. Investigators say they were tipped off to alleged workplace violations by IBEW Local 197.
Rivian’s Normal manufacturing plant is a former Mitsubishi facility acquired in 2017. The EV maker, which has said it will continue expanding the plant by 623,000 sq ft to about 4 million sq ft, also announced a plan this year to build a $5-billion EV plant in Georgia.
