Federal Judge Upholds Order for Michigan Logging Company to Pay Workers $878,874 Following U.S. Department of Labor Investigation

GRAND RAPIDS, MI – U.S. District Court Judge Thomas Ludington of the U.S. District Court for the Eastern District of Michigan again upheld the back wage computations resulting from a U.S. Department of Labor’s Wage and Hour Division (WHD) investigation and ordered Timberline South LLC, and its manager Jim Payne, to pay $878,874 in back wages and liquidated damages to 50 employees for violations of the overtime and recordkeeping provisions of the Fair Labor Standards Act (FLSA).

The Gaylord, Michigan, logging company appealed the court’s 2017 and 2018 decisions on summary judgment which upheld WHD’s overtime calculations and ordered Timberline South and Payne to pay back wages and liquidated damages. The U.S. Court of Appeals for the 6th Circuit upheld the district court’s findings and asked the lower court to determine if WHD should have included alleged unpaid meal and travel time in the back wage calculations. The district court again ruled the employers must pay the amounts as calculated by WHD because Timberline South and Payne failed to provide – despite numerous opportunities – adequate records of the time employees spent in travel and taking bona fide meal breaks.

“This decision demonstrates that employers bear the responsibility to maintain accurate records of their employees’ daily and weekly hours to show that employees receive the pay they are owed by law,” said Wage and Hour Division District Director Mary O’Rourke, in Grand Rapids, Michigan. “Employers must understand their legal obligations, and we encourage them to contact us with their compliance questions. Failing to pay employees overtime denies employees their hard-earned wages and puts employers who follow the law at an unfair disadvantage in the marketplace.”

In his decision and order, Judge Ludington determined the Wage and Hour Division properly reconstructed overtime back wages for employees where the employer failed to keep accurate records of the number of hours employees worked, as the law requires. WHD’s investigation determined Timberline South LLC and Payne failed to pay employees – including truck drivers, equipment operators and shop personnel overtime when they worked beyond 40 hours in a workweek. Instead, the company paid only “straight time” no matter how many hours employees worked, and paid various combinations of hourly rates, piece rates and day rates.

Timberline South has appealed the decision.

The FLSA requires covered employers to pay non-exempt employee’s time-and-one-half their regular rates of pay after 40 hours worked per week regardless of whether the employees are paid on a salary, piece rate, hourly rate, or a combination.

WHD’s mission is to promote and achieve compliance with labor standards to protect and enhance the welfare of the nation’s workforce. WHD enforces federal minimum wage, overtime pay, recordkeeping and child labor requirements of the Fair Labor Standards Act. WHD also enforces the Migrant and Seasonal Agricultural Worker Protection Act, the Employee Polygraph Protection Act, the Family and Medical Leave Act, wage garnishment provisions of the Consumer Credit Protection Act, and a number of employment standards and worker protections as provided in several immigration related statutes. Additionally, WHD administers and enforces the prevailing wage requirements of the Davis-Bacon Act and the Service Contract Act and other statutes applicable to federal contracts for construction and for the provision of goods and services.

The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.