It was paying piece rates for answering text messages that didn't add up to the $7.25 minimum hourly wage.
A directory assistance and enhanced information company with a headquarters in Hanover Township, Northampton County, has violated federal minimum wage standards since 2009, a federal judge ruled last week.
New York-based KGB USA Inc. was ordered to pay $1.3 million to nearly 15,000 current and former employees, the U.S. Department of Labor announced this morning in a news release.
The company's business process outsourcing headquarters is at 3864 Courtney St. in Hanover Township, according to the company's website. That address is cited in giving the court in the Eastern District of Pennsylvania jurisdiction in the case, according to court papers.
U.S. District Judge James Knoll Gardner said in a Feb. 7 consent decree that the company misclassified home workers, who were hired to respond to text messages from customers, as independent contractors, the Labor Department reports. The workers were paid a piece rate instead of $7.25 an hour, an investigation of the department's Wage and Hour Division revealed.
It is a violation of the Fair Labor Standards Act if piece earnings do not meet or exceed the minimum hourly rate, the news release said.
"Misclassification of workers as independent contractors is a serious threat to their livelihood," acting Secretary of Labor Seth D. Harris said in the release. "Misclassifying workers also undercuts responsible employers who must compete with unscrupulous employers who do not obey the law. The Department of Labor is committed to ensuring that employees are classified properly so that they receive both the pay they rightfully earn and the protections to which they are entitled – including minimum and overtime wages, family and medical leave, and unemployment insurance."
The investigation also revealed the company failed to keep accurate records of employees’ hours worked, in violation of the law's requirements, the department said. The company was ordered to pay the back wages and must meet minimum wage, overtime and record-keeping provisions in the future, the judge ruled.
A company spokesman didn't immediately return a phone message seeking comment. The company did agree to the decree, according to paperwork.
KGB USA is privately held and the world's largest independent provider of directory assistance and enhanced information services, the company's website says.
Founded in 1992, it employs more than 10,000 "global associates," including an extensive work-at-home organization, according the website.
Archives editor KJ Frantz and staff writer Sarah Wojcik contributed to this report.