🗞️ Ford Plant Contractor Ordered to Repay $1.7 Million After Shortchanging Workers on Overtime
The Labor Department recovered $1.73 million in back overtime pay for 1,666 workers at a contractor on Ford's electric vehicle and battery campus in Tennessee after finding bonuses were excluded from pay calculations.
The U.S. Department of Labor's Wage and Hour Division has recovered $1,730,598 in back wages for 1,666 hourly employees of The State Group Industrial (USA) Ltd. Inc., a multitrade contractor working at Ford Motor Co.'s electric vehicle and battery manufacturing campus in Stanton, Tennessee.
Investigators determined that the company violated the overtime provisions of the Fair Labor Standards Act by failing to fold incentive bonuses into employees' regular rate of pay, a calculation that federal law requires when figuring out how much overtime is owed. Because the bonuses were left out, workers received a smaller overtime premium than they had earned for hours worked beyond 40 in a week. The shortfall amounted to more than $1,000 per worker on average.
The case highlights a recurring compliance issue for employers: overtime pay must generally be based on an employee's total compensation, including most nondiscretionary bonuses, not just a base hourly wage. The department pointed employers toward existing guidance on how bonuses factor into overtime pay and toward recent opinion letters addressing the same question, as tools to avoid similar violations.
The State Group, headquartered in Franklin, Tennessee, provides industrial maintenance and multitrade staffing services to manufacturers, including steel mills, power plants and automotive facilities. Neither the company's response to the findings nor any indication of an appeal was included in the department's announcement.
Key Points
- The Wage and Hour Division recovered $1,730,598 in back wages for 1,666 hourly workers.
- The contractor, The State Group Industrial (USA) Ltd. Inc., staffed Ford's electric vehicle and battery campus in Stanton, Tennessee.
- Investigators found the company excluded incentive bonuses from employees' regular rate of pay, lowering their overtime premiums.
- Affected workers were owed an average of more than $1,000 each in unpaid overtime.
- The department cited the case as part of its broader enforcement of FLSA overtime rules and pointed to compliance resources, including its PAID program, which allows employers to voluntarily report and resolve potential violations.
Primary Source Author: Wage and Hour Division, U.S. Department of Labor
Primary Source: U.S. Department of Labor news release, "US Department of Labor recovers $1.7M in back wages for 1,666 hourly employees denied overtime by multi-trade contractor"
Primary Source Link: https://www.dol.gov/newsroom/releases/whd/whd20260623
