Mass. hide company pays almost $1M penaltyAP , Associated Press
Sep. 30, 2013 1:04 PM ET
BOSTON (AP) — Federal labor regulators announced a nearly $1 million settlement Monday with a Boston-area supplier of animal hides that allegedly paid workers below minimum wage, failed to pay them for overtime worked, and fired some who cooperated with investigators.
The consent judgment approved by a federal judge ordered Chelsea-based Boston Hides & Furs Ltd. to pay $825,000 in back wages and damages to 14 workers; $100,000 in damages to 10 fired workers; and a $50,000 civil penalty.
The judgment settles a lawsuit filed in November after workers went to the U.S. Labor Department with their complaints.
"The treatment of these workers was unconscionable," said Michael Felsen, the department's regional solicitor of labor in Boston.
The agreement is not an admission of guilt, and the case was settled so the company can "move forward with its business," a lawyer for Boston Hides said.
"This was a negotiated resolution. Boston Hides continues to deny the claims asserted," company attorney Gary Feldman said in a statement.
Investigators found that the workers put in 10-hour days, six days per week, processing animal hides and furs for shipping to tanneries around the world. They were paid a daily cash wage of $50 to $70, which amounted to an hourly pay rate far below the federal minimum wage of $7.25 per hour. The employees also were not paid overtime for hours worked above 40 in a week, the department said.
When Labor Department investigators went to the company's facility in May 2012, the company ordered workers to hide in a nearby house then fired them when they spoke to the investigators during an unannounced return a week later, authorities said. The workers were also allegedly threatened and verbally abused by ownership.
"For several years, these workers performed hard, dirty work for long hours without being paid overtime or even the legally required minimum wage. They did so for an employer who then fired most of them after we started our investigation," said George Rioux, the Wage and Hour Division's district director in Boston.
The Labor Department's allegations were exaggerated, Feldman said.
"If the case proceeded through discovery and trial, Boston Hides would have demonstrated that the amount of hours the Department of Labor claimed was grossly inflated," he said. "Boston Hides also would have proved that it did not fire the workers or retaliate in any way. To the contrary, each of the individuals stopped coming to work after the federal government showed up at the workplace."