The initial discovery of illegal pay practices at a Hebron, Kentucky, warehouse by the U.S. Department of Labor led to a broader investigation that found systemic overtime violations by a California-based warehouse operator and e-commerce distributor, and a determination that the employer owes $1,025,909 in back wages to 995 warehouse workers in Kentucky and California.
Investigators with the department’s Wage and Hour Division found that WIN.IT America Inc. – the U.S. branch of WINIT Information Technology Co. in Hong Kong, an e-commerce supply chain solution provider – failed to include merit-based bonuses in employees’ regular rates of pay when calculating overtime rates. By doing so, the City of Industry, California-based employer paid overtime at rates lower than required under the Fair Labor Standards Act.
In addition, WIN.IT paid some workers straight-time rates for all hours worked, failing to pay the additional half-time rate for hours over 40 in a workweek. The employer also misapplied the overtime rules for some salaried employees, which denied them overtime wages when required.
“What began as an investigation of pay practices at a Hebron, Kentucky, warehouse became a wide-ranging review of a prominent e-commerce solutions provider that found systemic failures to ensure their workers’ rights to be paid all of their hard-earned wages,” explained Deputy Principal Wage and Hour Division Administrator Jessica Looman. “As the demand for warehouse workers and the popularity of online shopping grows, e-commerce employers must ensure they comply fully with federal protections of workers’ wages and benefits.”
The investigation included WIN.IT warehouse locations in Hebron and Walton, Kentucky; and Walnut and City of Industry, California.
“Workers will naturally flock to businesses that show an ability to pay them their full wages on time,” Looman added. “Employers who fail to meet their legal obligation to workers and make it harder for them to make ends meet may find themselves struggling to hire the people they need to operate.”
The Bureau of Labor Statistics projects employment in transportation and warehousing, excluding the postal service, to grow about 327,300 new jobs over the next decade.
Established in October 2013, WIN.IT America Inc. is a subsidiary of WINIT Information Technology Co. in Hong Kong.
Workers can call the Wage and Hour Division confidentially with questions and the department can speak with callers in more than 200 languages.
Lisa Smith, SPHR, SCP
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