Baron and Budd Pursuing Misclassified Workers Case

Misclassification of Workers Could Be Cheating Federal Government, Employees Out of Millions

DALLAS--(BUSINESS WIRE)-- Baron and Budd has filed a lawsuit against M.S.J.E. Enterprises, a car delivery company, in a Texas federal district court for violating a number of wage and hour laws, and possibly cheating dozens of employees out of fair pay and the federal government out of significant taxes and other fees. In this case, workers were incorrectly classified as independent contractors when, under federal law, they should have been classified as employees. Unfortunately, it is a common practice for companies to misclassify workers as independent contractors instead of employees to avoid paying overtime wages, payroll taxes, social security withholdings, minimum wage and other fees and taxes that come with running a business.This practice is likely costing workers in various industries millions of dollars in lost overtime wages and the federal government millions of dollars in taxes and social security contributions.

Allen Vaught (Photo: Business Wire)

“In the M.S.J.E. case, the company employed around 70 workers. It was their job to pick up and deliver cars to various customers, which were usually rental car companies or car dealers,” said Allen Vaught, head of Baron and Budd’s FLSA litigation section. “In many cases, employees worked up to six days a week and far in excess of 40 hours per week. They were paid by the car instead of by the hour, and since they were paid only $8 per car, the wages these employees typically earned was below minimum wage.”

According to the Fair Labor Standards Act (FLSA), a federal law that governs wages and hours, if a worker is “economically dependent” on the company, as opposed to being in business for himself/herself, then that worker is an employee. Employees are entitled to overtime and other FLSA protections. Employers cannot get out of their FLSA obligations by calling an employee an independent contractor.

Not only are these individuals being cheated out of the pay guaranteed them by law, the federal government is also being cheated out of the money it is due. With the many financial issues our country faces today, the government has been stepping up investigation and prosecution of employers who incorrectly classify employees as independent contractors to avoid paying taxes.Additionally, whistleblowers who report illegal payroll practices that defraud the federal government of tax revenue may be entitled to a percent of the recovery and their identities are kept anonymous. Baron and Budd attorneys are currently working on a number of whistleblower and FLSA cases.

If you think that similar violations are occurring your workplace, or even if you are not certain, contact Baron and Budd attorney Allen Vaught at 1.866.496.1225 or at [email protected]. Your call is free and confidential.Federal law is clear that your employer cannot retaliate against you for investigating or pursuing wages due under the FLSA.

About Baron & Budd, P.C.

The law firm of Baron & Budd, P.C., with offices in Dallas, Baton Rouge, Austin, Los Angeles and Miami, is a nationally recognized law firm with a 30-year history of "Protecting What's Right" for people, communities and businesses harmed by negligence. Baron & Budd's size and resources enable the firm to take on large and complex cases. The firm represents individuals, governmental and business entities in areas as diverse as water contamination, Gulf oil spill, Qui Tam, California Proposition 65 violations, dangerous medications and medical devices, Chinese drywall, insurance claims, commercial litigation, securities fraud and asbestos-related illnesses such as mesothelioma.

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