UPDATED: The U.S Department of Labor recovered $154,009 in back wages and liquidated damages from Primex Plastics Corp after the company failed to include bonus payments while calculating overtime for 743 workers.
Primex officials say the issue relates to a quarterly bonus program that the company implemented during the pandemic, which was resolved and closed out by the Department of Labor in February 2024.
Primex agreed to pay the back wages and damages. The Office of Administrative Law Judges also are requiring the company to pay $128,589 in civil penalties to the department due to the willful nature of the violations.
"Employers must pay qualified workers overtime for hours over 40 in a work week and include non-discretionary bonuses, such as those based on attendance or on quality and accuracy of work, when calculating overtime wages," said Steven Salazar, wage and hour division district director, in a news release. "Our investigation found Primex Plastics Corp. left bonuses out of their overtime calculations and, in addition to being liable for more than $150,000 in wages and damages, the company paid significant penalties for their violations."
This is not the first time Primex Plastics has violated federal overtime regulations. The other incidents were in 2002, investigators recovered $3,246 for two salaried workers legally owed overtime and in 2010-2011 Primex Plastics failed to include bonuses in its calculations for overtime for hourly employees. Those violations resulted in the company having to pay $203,960 in back wages to 991 workers.
Primex Plastic released a statement to its customers on Oct. 3 explaining the issue. Officials complained that the Department of Labor put out a news release on the case now, months after it was resolved.
"We were not aware of the press release until we were contacted by the Atlanta Journal Constitution for comment. The information from the DOL is skewed and very misleading," Darin Dubbs, the digital marketing coordinator at Primex Plastics, told Plastics News.
When the COVID-19 pandemic hit, Primex was faced with difficult decisions, but the company did not request governmental assistance or lay off employees. Primex used the guidance given by the Department of Labor and implemented a supplemental quarterly bonus program.
The Department of Labor ended up disagreeing with the program the company had put in place. During the Department of Labor's investigation, it claimed the bonuses should have been considered overtime.
The extra pay averaged out to less than $100 per employee.
"Primex remains perplexed as to why the Department of Labor insisted on seeking penalties and more than six months after resolution, decides to publicize," Primex Plastics wrote in the company's response to its customers.
The response is concluded with ensuring its customers they are dedicated to ensuring its employees are compensated fairly and that the company follows all relevant payroll regulations.
Primex ranks at No.18 in Plastics News' North American film and sheet manufacturers with estimated $630 million in related sales.