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Court awards $254K in back wages to employees at Travelon Transport

WCCO digital headlines: Morning of June 27, 2023
WCCO digital headlines: Morning of June 27, 2023 01:25

MINNEAPOLIS, Minn. -- A federal court in Minneapolis awarded $254K in back wages to employees at Travelon Transportation after a jury found the company misclassified them in order to deny overtime pay.

Alpha & Omega USA Inc. -- also known as Travelon Transportation -- is a non-emergency medical transport company. The U.S. Department of Labor began looking into their business practices when it was reported that drivers were being misclassified as independent contractors, thus denying them overtime pay.

The department filed a suit against the Eden Prairie employer after they allegedly refused to comply with the findings of an investigation by its Wage and Hour Division, which initially found the misclassification. 

Denying employees of overtime pay through misclassification violates a number of statutes within the Fair Labor Standards Act. 

Some of the violations reported by the Wage and Hour Division include:

  • Failing to pay some drivers at all for weeks they drove,
  • Made various deductions from drivers' wages for van leasing, insurance, maintenance, dispatch and use of tablets -- leading to employee's wages falling below the federal minimum wage,
  • Failed to pay overtime at time and a half for an employee who worked over 40 hours in one work week, misclassifying these employees as independent contractors,
  • Did not keep accurate records of hours employees worked.

These findings ultimately triggered a jury trial after Travelon appealed the district court's judgment to award back wages and damages to employees in 2021. 

In July 2022, the 8th Circuit Court of Appeals reversed the earlier judgment and remanded the case for trial. 

"The court upheld that Travelon Transportation owes these 21 drivers back wages and damages for failing to pay them as the law requires. With the company setting their work hours, work conditions and pay rates and making demands on their time that prevented them from working elsewhere, the drivers are economically dependent on Travelon Transportation and, by definition, employees and not independent contractors," explained Wage and Hour Regional Administrator Michael Lazzeri in Chicago.

The final judgment in the U.S. District Court for the District of Minnesota -- upholding that the company and owner, Viktor Cernatinskij, are to recover back pay and damages for affected employees -- was issued on June 17. 

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