Over a year after B & D Contracting Inc., a Houma-based staffing agency catering to the energy and maritime fabrication industry, agreed to pay more than $1.6 million in back wages to some 1,500 employees, knowledge about illegal “per diem” pay schemes remains low amongst employers and employees in our region. According to a NOLA.com/The Times-Picayune report, the case was one of the first under a federal crackdown on illegal pay schemes that have cheated thousands of welders, electricians and other craft workers at Gulf Coast shipyards out of millions of dollars in overtime pay. The U.S. Department of Labor Wage and Hour Division says that with the increase in the use of subcontractors and staffing agencies, “lead companies” are skirting key parts of the employer/employee relationship – including benefits like workers’ comp, payroll taxes, and overtime pay. In the B & D Contracting case, and in many others like it, federal investigators highlight one pay scheme in particular that has proliferated among temporary staffing agencies serving Gulf Coast shipyards. Employers will label part of employee wages as “per diem” expense reimbursements rather than regular wages, thus avoiding paying overtime and lowering overall payroll.
Read full coverage from NOLA.com here.