WASHINGTON, D.C. – Attorney General Karl A. Racine today announced that the Office of the Attorney General (OAG) resolved two wage theft enforcement actions against two District employers that require them to pay nearly $500,000 in relief to harmed workers and penalties to the District. In a settlement with the Office of the Attorney General (OAG), Rock Spring Contracting, LLC, a construction company, is required to pay over $280,000 for allegedly misclassifying workers as independent contractors and depriving them of legally-mandated paid sick leave and overtime pay. OAG also won a judgment of more than $216,000 against J.D. Nursing and Management Services, Inc., a now-shuttered home healthcare company that stole months’ worth of wages from personal care aides.

“Our office is proud to stand up for District workers, and will not hesitate to file suit when necessary against employers that fail to pay workers what they have rightfully earned,” said AG Racine. “With important cases already under active investigation, District employers must understand that wage theft and worker misclassification are illegal and carry serious consequences.”

Wage theft is the illegal practice of denying workers the wages or benefits they have earned. Some examples of wage theft include paying workers less than the minimum wage, refusing to pay overtime, or misclassifying employees as independent contractors. Wage theft affects millions of workers nationally. It occurs across job types and income levels, though workers in low-wage jobs and immigrants are especially vulnerable to this type of exploitation.

Under the District’s wage and hour laws, businesses must pay employees a minimum wage of $14 per hour (rising to $15 per hour in July 2020), provide overtime pay, and allow workers to accrue paid sick leave. Worker misclassification is a form of payroll fraud where employers improperly categorize workers as “independent contractors” instead of direct employees. Unscrupulous companies do this to strip workers of legal protections, reduce costs, and evade paying their fair share of payroll taxes. Under the District’s Workplace Fraud Act, which applies to the construction industry, companies are required to classify most workers as employees and those who fail to do so can face significant penalties.

Settlement with Rock Spring Contracting, LLC
Rock Spring Contracting is a construction company headquartered in Kensington, Maryland. It provides drywall services at construction sites across the District. OAG opened an investigation of Rock Spring and alleged that, from 2015 through 2017, Rock Spring misclassified about 75 drywall workers as independent contractors instead of properly classifying them as employees. OAG also alleged that Rock Spring failed to pay overtime and paid sick leave.

The settlement with Rock Spring resolves OAG’s wage theft investigation and requires the company to:

• Pay $56,851.20 in restitution to workers: Rock Spring is required to pay $56,851.20 in restitution that will be used toward compensating current and former drywall workers who were not paid overtime wages and denied paid sick leave.
   
• Pay $225,000 in penalties to the District: Rock Spring is required to pay a penalty of $225,000 to the District to resolve the investigation.
   
• Implement measures to comply with the District’s wage laws: Rock Spring must implement new policies and procedures to ensure compliance with the District’s minimum wage, overtime, paid sick leave, and worker misclassification laws, as well as report on those policies and procedures to the District.

A copy of the settlement agreement is at: https://oag.dc.gov/sites/default/files/2020-01/Rock-Spring-Settlement.pdf

Judgment against J.D. Nursing and Management Services, Inc. and James N. Ibe
J.D. Nursing and Management Services, Inc. was a home healthcare service provider based in the District. The company employed personal care aides to work in the homes of District Medicaid recipients, providing hygiene services and assisted living services. In 2017, OAG filed suit against J.D. Nursing and its former CEO, James N. Ibe, for failing to pay wages to more than 20 personal care aides between September 2015 and January 2016. The aides worked for an average of over 150 hours each and were never paid for their labor.

OAG has won a summary judgment ruling from the court that requires J.D. Nursing and Ibe to:

• Pay $194,856 in stolen wages and damages to 26 workers: J.D. Nursing and Ibe were found to have illegally withheld back wages to 26 workers for a total of 3,530 hours of work. The court awarded damages totaling $194,856. This amount includes $48,714 in back pay these workers are owed, plus three times that amount in liquidated damages ($146,142). OAG will attempt to collect these amounts from the defendants in order to provide relief to those who were harmed.
   
• Pay $22,050 in penalties to the District: J.D. Nursing and Ibe were required to pay a penalty of $50 for each day they violated District law. The court found that the wage-and-hour violations took place over 441 days and assessed a $22,050 penalty to be paid to the District.

A copy of the judgment is available at: https://oag.dc.gov/sites/default/files/2020-01/JD-Nursing-Order.pdf

OAG’s Increased Efforts to Fight Wage Theft
In 2017, OAG worked with the Council of the District of Columbia to grant the agency independent authority to investigate and bring wage theft cases, and to increase penalties on employers who violate the District’s wage and hour laws. Since then, OAG has launched more than 30 investigations into wage theft and payroll fraud and has taken action against  a home health care provider, a national electrical contracting firm, KFC franchises, a cell phone store, a cafe chain, and other businesses that harmed District workers. AG Racine also recently testified before Congress and highlighted findings from an OAG report about how worker misclassification—a type of payroll fraud—hurts workers, undercuts law-abiding businesses, and cheats taxpayers. Read our latest factsheet on OAG’s work to protect District workers.

How to Report Wage and Hour Violations
Workers who believe that their rights have been violated, or that they have experienced wage theft or other wage and hour violations, can contact OAG by phone at (202) 442-9854. Workers can learn about their rights under District law and how they can get help if their rights are being violated at: https://oag.dc.gov/workers-rights.