Labor Dept. Recovers $1.1M from 2 San Diego Logistics Firms - Modern Distribution Management

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Labor Dept. Recovers $1.1M from 2 San Diego Logistics Firms

The agency said 50 workers were being paid as little as $2.43 an hour.
Sunnyvale, CA, USA - May 4, 2022: Website homepage of the U.S. D

The U.S. Department of Labor (DoL) announced March 20 it has recovered $1.1 million from two San Diego-area companies — Freig Carrillo Forwarding Inc. and ACV Logistics Inc. — for underpaying 50 Mexican nationals, some of whom the agency said were paid as little as $2.43 an hour.

Federal investigators found the employers used affiliates to pay the affected workers in Mexican Pesos by direct deposit each week, according to the DoL.

The recovery comes following investigations of Freig Carrillo Forwarding and ACV Logistics that found the employers were denying minimum wage and overtime wages to Mexican nationals working in their San Diego-area warehouses. Freig Carrillo Forwarding and owner Javier Martin Freig Carrillo were ordered by the U.S. District Court for the Southern District of California to pay $1 million in back wages and damages to 35 workers while ACV Logistics and owner Armando Carrillo agreed to a settlement with the department and paid back $70,104 in back wages and damages to 15 workers.

Both employers also paid penalty fees for their violations of the Fair Labor Standards Act, according to the DoL.

“The enforcement actions announced today are part of our ongoing effort to root out abusive labor practices by employers operating in the customs warehouse industry,” Principal Deputy Wage and Hour Administrator Jessica Looman said in a news release. “The idea that some employers are paying people working in the U.S. – regardless of where they call home – an hourly rate equal to the price of a bottle of water is intolerable. All employers should pay their workers working in the U.S. as federal, state and local laws require.”

The DoL noted that, since 2021, it has recovered more than $2.2 million from other San Diego employers after they were found to be using similar labor practices to exploit workers.

“The department’s ongoing work in this industry along the Southern border puts other U.S. employers on notice that we will not tolerate these kinds of exploitive labor practices,” Solicitor of Labor Seema Nanda said in the release. “An employee’s citizenship has no bearing on whether the Fair Labor Standards Act’s protections apply to them. We will continue to combat wage theft aggressively on behalf of all workers covered by the statute.”

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