Arizona companies ordered to pay $5.6M in back wages to drivers

PHOENIX — The U.S. District Court in Arizona ordered an auto parts distributor and a logistics firm to pay $5.6M to 1,398 drivers misclassified as independent contractors.

The Department of Labor found that joint employers Parts Authority Arizona LLC and Arizona Logistics Inc. violated the Fair Labor Standards Act by not keeping timekeeping records, failing to meet minimum wage requirements, requiring workers to use personal vehicles for deliveries without compensation and not paying overtime wages.

The companies were ordered to pay $2.8 million in back wages, $2.8 million in liquidated damages and $150,000 in civil money penalties, according to court records.

“Employers cannot avoid their obligations to pay the minimum wage and overtime through contracting with another entity to obtain employees,” Solicitor of Labor Seema Nanda said in a press release.

“The U.S. Department of Labor will combat misclassification schemes and wage theft through pursuing all the employers that are responsible for depriving employees of their rights under the Fair Labor Standards Act.”

Additionally, the court ordered the defendants to create a record keeping system, decreed that Parts Authority Arizona drivers are employees and seasonal drivers using their own vehicles must be compensated.

The Department of Labor’s Wage and Hour Division investigated the matter between April 2012 and March 2020.

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