NY Labor Department Finds Cleaning Service Sweeping Money From Workers Paychecks
Albany, NY (CompNewsNetwork) - An investigation of a Long Island cleaning service by the New York State Department of Labor's Division of Labor Standards revealed a series of illegal deductions from worker paychecks, State Labor Commissioner M. Patricia Smith announced today. Approximately 170 cleaners, deemed “technicians” by Amityville-based Icon Cleaning, spent up to 12 hours a day and 60 hours a week cleaning air ducts and carpets in privately-owned residences and businesses. After numerous unlawful deductions were taken into account, some workers brought home less than $100 in a given week. On November 7, the Department of Labor issued an Order to Comply for $363,376 to "Richard Bag and Tbag Enterprises LLC" T/A Icon Cleaning. The affected workers include 170 current and former employees who worked as cleaners, but were erroneously considered independent contractors by the employer. Illegal deductions were taken from wages on a regular basis, amounting to $238,581. The Order also includes $65,149 in interest, along with a civil penalty of $59,645.
“Workers do not deserve this kind of treatment under any circumstance,” said Commissioner Smith. “I have never seen such an inventive list of absurd and illegal deductions from workers' wages. It's inexcusable to think that in these tough economic times, employers choose to balance their books on the backs of their workers.”
Labor Department investigators found that each employee was forced to pay a $500 security deposit upon being hired at the company, which could either be paid for up front or illegally deducted from subsequent paychecks. Other illegal payroll practices included:
* In the event that a customer was not satisfied with the service provided by the company, or if the wrong services were rendered, an illegal deduction was made from the employee's paycheck. * In instances where the company was doing a promotional campaign on discounted services, these discounts were taken out of employee paychecks. * If an employee indicated that he or she needed extra assistance on a particular project, in some instances Icon Cleaning would provide another worker for the project and that worker's wages were deducted from the requesting employee's paycheck. * If a customer provided a check to the employee and it bounced, the employee was required make up for the lost revenues through payroll deductions. * Gasoline paid for by the employee on company time was deducted from paychecks.
Under state law, employers can only make deductions from employees' paychecks for a narrow, specified list of reasons, including payments for insurance premiums, pension or health benefits, charitable contributions, payments for union dues, court-ordered deductions, and similar payments for the benefit of the employee. In addition, the employer must have the employee's written permission for most deductions.
Icon Cleaning also stated that workers were not employees, but rather “independent contractors,” even though they wore the company uniform, took direction from company management, and used equipment and materials supplied to them by the company. Therefore, this case has been referred to the Joint Enforcement Task Force on Worker Misclassification, a multi-agency task force formed in September 2007 to address the problem of employers paying their workers off the books.
The investigations were handled by Labor Standards Investigators Ben Simonetti, Urvashi Aggarwal and Carole Weissberg.
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