HOUMA, La. (AP) - A Louisiana labor staffing company has agreed to pay $1.6 million in back overtime wages to more than 1,500 workers.
The U.S. Labor Department announced Thursday that B&D Contracting has agreed to make the payments following an investigation into how the company calculated overtime.
Federal authorities said that B&D, which placed welders, pipe fitters, ship fitters and other workers with oilfield and shipbuilding companies along the Gulf Coast of Louisiana, Mississippi and Alabama, wrongly classified some wages as per diem payments.
Investigators said that drove down the amount of overtime that workers earned, violating the federal Fair Labor Standards Act.
"Employers may not manipulate these arrangements and use evasive pay practices to avoid paying workers their rightful wages," Wage and Hour Division Administrator David Weil said in a statement.
The Houma-based company could not immediately be reached for comment late Thursday. Louisiana corporate records show it is led by John W. Bowie of Houma and Wayne Davis of Gulfport, Mississippi.
Federal officials said that beyond agreeing to pay back wages, B&D has signed a settlement where it agrees to prevent future violations. They also said B&D would be referred to the IRS and Louisiana Workforce Commission for further legal review.
Labor Department officials said that other staffing and contracting companies along the Gulf Coast have been misusing per diem payments.
"We are increasingly finding the use of per diem schemes as a means of decreasing overtime pay and tax obligations in the staffing and support services industry in this region," Southwest Regional Administrator Cynthia Watson said in a statement.
The Labor Department said the investigation is part of a focus on temporary labor providers along the Gulf Coast. It said its New Orleans office has conducted 24 investigations into temporary help services in recent years, forcing the companies to pay more than $2.5 million in back wages to more than 3,000 workers.