BOSTON–The U.S. Department of Labor and UnWrapped, Inc. have reached a settlement agreement that will allow employees of the Massachusetts sewing factory to recover $890,021 in back wages and liquidated damages to resolve past violations of the federal Fair Labor Standards Act.
An investigation by the department’s Wage and Hour Division found that UnWrapped failed to pay proper overtime rates to 327 piece rate and hourly workers between April 2014 and April 2016, and failed to keep accurate records. The FLSA requires that employees receive one-and-one-half their regular rates of pay when they work more than 40 hours in a work week.
The division’s investigation was part of a joint enforcement effort with the Fair Labor Division of the Massachusetts Attorney General’s Office. The state’s investigation identified alleged violations of Massachusetts law involving failure to pay minimum wage, failure to provide earned sick time and retaliation against two workers who cooperated with the investigation, for which the company will pay $293,170.
“This cooperative federal-state effort and the resulting settlements provide these 327 employees, many of them low-wage workers, with wages they earned but were not paid in the first place. They also help level the economic playing field for those companies that comply with the law and pay their employees correctly,” said Mark Watson Jr., the division’s northeast regional administrator.
UnWrapped is a Lowell, Mass., company that produces products, such as mattress covers, pillows, tote bags and custom items, under contract.
Under the terms of the Wage and Hour Division agreement, UnWrapped will complete payment of back wages and damages to the workers by no later than March 15, and will submit proof of payment to the division. The company has paid a civil money penalty of $8,350 for a child labor violation and also agreed to refrain from retaliation against any employees for filing a complaint or testifying in a matter related to the FLSA.