U.S. District Court Orders Utah Drywall Company to Pay $650,000 in Back Wages, Damages, and Penalties for Willful Labor Law Violations

SPANISH FORK, UT – The U.S. District Court for the District of Utah has ordered Kyco Services LLC and its owner Kyle Morris to pay $550,000 in back wages and liquidated damages to 267 employees for willfully violating the overtime and recordkeeping provisions of the Fair Labor Standards Act (FLSA). The court also ordered the drywall company to pay $100,000 in civil money penalties.

The action follows an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD) that found Kyco Services paid employees on a piece rate, without regard to the number of hours that they worked. When employees worked beyond 40 hours in a week, the employer failed to pay them overtime. Company payroll records, however, falsely showed that the company paid employees hourly rates near the minimum wage, with overtime paid at time-and-one-half, and additional bonuses paid each pay period. The employer generated these records to create the appearance that they were paying overtime, when they were in reality calculating retroactively to arrive at amounts that matched the pre-determined piece rates.

“Not paying construction workers the wages they earned seriously impacts their ability to take care of themselves and their family,” said Wage and Hour Division Administrator in the Southwest, Betty Campbell. “The U.S. Department of Labor remains focused on the American workforce and employers. If violations are found we will pursue corrective action vigorously to ensure accountability, deter future violations, and prevent violators from gaining a competitive advantage. Our work levels the playing field for employers who play by the rules.”

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the toll-free helpline at 866-4US-WAGE (487-9243).

Information is also available at https://www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by the Division.

Docket No.: 18-cv-00234-DB