Knoxville News-Sentinel (01/10/12) News Sentinel Staff

Knoxville, TN-based Custom Security Solutions Inc. has agreed to pay $62,038 in back wages to 34 security guards as a result of an investigation by the U.S. Labor Department’s Wage and Hour Division. The regulatory agency found the employees were improperly classified as independent contractors and denied minimum wage and overtime wages due under the Fair Labor Standards Act.

The Wage and Hour Division said its investigators determined that the 34 employees were paid a “straight time” rate for all hours worked instead of time and one-half their hourly rates for hours over 40, as required by the FLSA. “The misclassification of employees as independent contractors is an alarming trend, particularly in industries that often employ low-wage, vulnerable workers and in which the Wage and Hour Division historically has found significant wage violations,” the Labor Department said in a statement.