Sacramento manufacturer ordered to pay workers $260,000 in overtime after investigation

A pallet manufacturer in Sacramento must pay back more than $260,000 in unpaid overtime wages to 31 employees after a Labor Department investigation found the company in violation of federal labor law.

Martinez Pallets Incorporated and owner Miguel Arturo Cruz failed to pay employees time-and-a-half for hours worked in excess of 40 per week, investigators with the department’s Wage and Hour Division found. The company “willfully attempted to evade” overtime provisions of the Fair Labor Standards Act and hid these violations by paying employees in cash or on separate paychecks for extra hours, the agency found.

Investigators also discovered the Rio Linda-based company allowed two underage employees – a 16-year-old and a 17-year-old – to illegally operate woodworking machines and forklifts. Federal labor law considers both of these tasks as “hazardous occupations” for minors.

Martinez was fined nearly $14,500 for the child labor and overtime violations.

“We want to put the word out and educate the public, but we also want employers to know that we’re committed to enforcing federal labor law especially when it comes to low-wage workers and minors,” said Cesar Avila, Sacramento district director for the Wage and Hour Division.

The division learned about the employer’s alleged misconduct after an employee called a multi-state hotline operated by the Employment Education and Outreach Alliance, known as EMPLEO. The hotline mainly assists Spanish-speaking workers with workplace issues.

Avila said he believed this was the first time Martinez Pallets had been investigated by the division.

“First and foremost, we want future compliance,” he said.

Martinez Pallets did not return a call seeking comment.