National Freight Inc. will pay about $1 million to settle a Labor Department investigation that concluded the New Jersey-based warehouse and distribution company didn't pay 357 driver dispatchers and yard spotters for overtime, the DOL announced.
The company compensated employees with a flat weekly pay that didn't vary when they worked more than 40 hours in a week, the DOL said in an Aug. 25 announcement. The department concluded that this violated NFI's obligation to pay overtime under the Fair Labor Standards Act because the workers were misclassified as exempt, the agency said.
“Every dollar counts for NFI employees who work long days to earn a living,” David Weil, administrator of the DOL Wage and Hour Division, said in a statement. “The case's resolution should send a strong message to other industry employers who may be denying overtime to workers in these positions,” he said.
The company will implement wage and hour compliance procedures, including hiring a compliance officer and providing training to managers, DOL said. The company will establish a complaint hotline through which employees may confidentially report suspected violations.
National Freight's parent company, NFI Industries, issued this statement in response:
"In 2014, the United States Department of Labor initiated an investigation of NFI's classification of certain New Jersey employees. NFI cooperated fully with the investigation. At the conclusion of that initial investigation, the DOL informed NFI that it believed that some of its New Jersey-based logistics coordinators, dispatchers and yard spotters should be overtime-eligible. While NFI disagrees and denies that any of its employees were misclassified, the increase to the weekly salary requirement associated with the proposed changes to the federal overtime exemptions, caused NFI to decide to reclassify the positions at issue as non-exempt. As a result, NFI worked with the DOL and engaged in a voluntary and comprehensive review of its classification of these positions across the country. Ultimately, effective January 2016, NFI reclassified the positions at issue.
"In the settlement agreement with the DOL, NFI denies that it acted improperly in any way, but in order to make employees whole and avoid protracted litigation, NFI decided to resolve the matter and make back wage payments to certain employees under the DOL's supervision. NFI is committed to paying its employees competitively and in accordance with all applicable wage and hour laws. In light of the reclassification undertaken by NFI and the pending changes to the federal overtime exemptions, NFI has agreed to employee training and the appointment of a compliance monitor."
NFI Industries ranks No. 27 on the Transport Topics Top 100 list of the largest for-hire carriers in the U.S. and Canada, and No. 15 on the Top 50 list of the largest logistics companies in North America.
