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FedEx Contractors Owe Workers $181,379, Labor Agency Finds (1)

May 26, 2022, 4:05 PMUpdated: May 27, 2022, 2:10 PM

A U.S. Department of Labor investigation found that two delivery companies subcontracting for FedEx owe 235 workers in Birmingham, Ala., over $181,000 in back pay.

The department’s Wage and Hour Division saidWednesday that two subcontractors for the courier company, Steel City Couriers Inc. and Cahaba Valley Couriers Inc., paid workers a flat weekly rate and didn’t keep accurate records of hours worked, in violation of the Fair Labor Standards Act.

The employers claim to have misinterpreted section 13(b)(1) of the FLSA, which provides an overtime exemption to workers employed by a motor carrier, driving on interstate highways, operating delivery trucks weighing at least 10,000 pounds, or engaged in “safety affecting activities,” the Labor Department said.

The investigation led to the recovery of $181,379 in back wages.

DOL’s wage and hour division recovered nearly $138,700,000 in overtime back wages in fiscal 2021, down from $151,347,794 recovered the year before. Top industries where wages are owed include construction, food services, and health care, according to DOL data.

“Misapplying overtime rules deprives workers of their legal right to be paid time-and-a-half for hours over 40 in a workweek,” said Kenneth Stripling, Wage and Hour division district director in Birmingham. “Employers who ignore their obligations and violate workers’ rights can find their mistakes costly and their ability to recruit and retain the people they need to run a successful business difficult, if not impossible.”

Steel City Couriers didn’t immediately respond to requests for comment. Attempts to reach Cahaba Valley Couriers were unsuccessful.

(Updated with DOL data on overtime back pay in paragraph 5. An earlier update corrected the first paragraph to reflect subcontractors owe back pay. Story originally published May 26.)

To contact the reporter on this story: Jalen Brown at jbrown@bloombergindustry.com

To contact the editors responsible for this story: Genevieve Douglas at gdouglas@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com