Three international logistics and transportation companies in the San Diego border region recently agreed to pay nearly $840,000 in back wages, damages and penalties after federal investigators alleged they “willfully and recklessly” deprived dozens of workers of their proper pay, including paying some workers less than $3 per hour.
A fourth company facing a similar federal probe allegedly ferried workers away from a warehouse when investigators arrived and then fired some of them in order to keep them from speaking with investigators, according to a Fair Labor Standards Act lawsuit filed last week by the U.S. Department of Labor.
That federal lawsuit and the three recent settlements are part of a series of ongoing investigations that began in 2019 and have led to the recovery of more than $5 million in back wages and damages for more than 300 workers, according to the Department of Labor. Officials say those investigations, led by the department’s Wage and Hour Division, have uncovered a pattern of wage theft and labor abuses by firms that employ Mexican workers at warehouses along the border in San Diego.
“The U.S. Department of Labor is committed to continuing its years-long effort to bring the customs broker, warehouse and logistics industry into compliance with the federal workplace guarantees of minimum wage and overtime,” Marc Pilotin, the department’s western regional solicitor, said in a statement. “Far too many employees who work in these cross-border operations continue to be cheated out of their lawful wages under U.S. law. The department will do all in its power to protect the rights of all people working in our country.”
Some of the companies who have come under investigation have asserted that the workers in question are employed by Mexican firms, live in Mexico and are paid properly under Mexican labor laws.
According to a consent judgment signed in March, the firm Ruffo de Alba Forwarders LP failed to pay its workers the federal minimum wage of $7.25 per hour and denied overtime pay to employees who worked more than 40 hours per week. In some cases, the company, a customs broker providing logistic and transportation services, paid workers as little as $3.27 per hour in Mexican pesos, according to the Labor Department.
The company agreed in the consent judgment to pay 14 workers a total of $445,798 in back wages and damages. The company also agreed to pay $8,645 in penalties and hire an independent third party to conduct annual Fair Labor Standards Act training.
An attorney who represented the company in the matter was not available to comment.
SAI Logistics Experts Inc., another customs broker involved in assisting the cross-border transport of goods, denied Mexican workers required overtime wages and paid some workers as little as $3.86 per hour in pesos, according to the Labor Department. The company agreed in a consent judgment signed last month to pay 13 workers a total of $318,249 in unpaid regular and overtime wages and damages. Like the other firm, SAI Logistics Experts also agreed to pay a $8,645 penalty and hire an independent third party for annual federal fair labor law training.
It was unclear in court records if the company had an attorney who could comment on its behalf.
Moving Technologies of America Inc., a transportation and distribution subsidiary of Vadeto Group LLC, failed to pay five of its employees the minimum wage and paid some as little as $2.77 per hour, according to the Labor Department, which said the company’s owner tried to mask the workers’ employment status in various ways, including hiring them under a Mexican-based subsidiary of Vadeto Group.
Federal investigators recovered $75,132 — half for back wages and half for damages — for the five affected employees from Moving Technologies of America. In 2020, the company paid $12,225 to four workers who had been denied overtime pay.
It was unclear if the company had an attorney who could comment on its behalf.
Last week, the Labor Department filed a federal lawsuit against NBG Logistics Alliance Inc. alleging similar labor violations. The government agency also sought an injunction against the company, which has locations in San Diego and Calexico, to keep it from interfering in its investigation and from firing or threatening workers who participate in the investigation.
Attorneys representing the company did not immediately respond to a request for comment Friday afternoon.
Last year, a company that agreed to pay more than $1 million in back wages to 35 Mexican workers disputed any wrongdoing and criticized investigations of this kind by the Labor Department.
That company, Freig Carrillo Forwarding Inc., said in a statement through its attorney that the workers who were allegedly underpaid were Mexican citizens employed by a Mexico-based company, and only crossed the border to inspect goods to comply with Mexican customs laws.
“Freig Carrillo does not concede that citizens of Mexico who are employed by a Mexican entity and cross the border are automatically and necessarily covered by U.S. wage and hour laws,” the company said last year. “We are not aware of any court that has ruled that U.S. laws apply to these Mexican citizens in these circ*mstances and would encourage the DOL and the court system to work on this clarification for the benefit of the entire customs broker industry.”
The Consulate General of Mexico in San Diego, which often works with the Labor Department during such investigations, urged any workers with similar concerns to contact the consulate at (619) 231-3847 or proteccionsdi@sre.gob.mx.
