The California Department of Industrial Relations’ Division of Labor Standards Enforcement was said to have uncovered multiple potential violations.

Impact Logistics was issued a $499,000 citation for failure to provide itemized wage statements to employees. It was also issued a Notice to Discontinue labor law violations for failure to maintain time records. Premier Warehousing Ventures was issued a Notice to Discontinue reporting time violations and other violations.
“Our investigation is ongoing,” said California Labor Commissioner Julie Su. “We will assess all wages owed to the workers and work with the employers to ensure compliance going forward.”

“Warehouse workers do some of the most backbreaking jobs in our economy. Their work is often hidden from public view and there is constant pressure to work faster, which can lead to abuse. In this case, workers were paid piece rate to unload containers. Piece rate workers must receive at least minimum wage and overtime for all hours worked,” Su added. “California law also requires that all employees receive wage statements that explain the basis for their paycheck. This is to help workers identify if they've been cheated out of their hard-earned wages. Proper wage statements were not provided to these workers.”

“There have been times when we’ve worked up to 16 hours a day and we don’t even earn a minimum wage,” said Juan Chavez, one of the workers in the class action suit, said at the press conference, through a translator. Another issue, he said, is that there is no way to tell how the amount on his pay stub was calculated. "We don’t know how that amount has been arrived at too tally our wages,” he said.

This pay issue could be very interesting, as almost surely records would eventually allow a valid comparison of the pieces moved and hours worked versus what the workers were actually paid.

In fact, Tennessee-based Impact Logistics touts the piece rate program in its promotional pieces.

“Our trained and qualified associates are paid on a performance pay scale based upon work completed,” says the narrator in a company video, heard over Bachman Turner Overdrive's classic "Takin’ Care of Business." “The result is highly motivated, fairly compensated, loyal associates working in your operation,” the video adds.

Impact’s chief operating officer Brett Veach says the company is cooperating with the audit.

Dan Fogleman, a Walmart spokesman, told Huffington Post last week that the company is "not involved in this matter." He added, "The contracts we have in place with third parties require that they follow the law, and that’s something we fully expect."

A spokeswoman for Schneider said in a statement on the California investigation that "We believe that we are in full compliance with applicable laws and regulations. We expect our vendors to fulfill their responsibilities as well."

Earlier this summer, Warehouse Workers United had alleged abusive conditions in many Inland Empire DCs, and asked the California OSHA office to investigate conditions there.

With these two recent incidents, companies across the country should take a look at their DC operating conditions and the practices of their staffing agencies and third parties to ensure satisfactory working conditions and legal compliance.

What do you think of this latest incident of what appears to be abusive conditions in a major DC? How common is abuse by warehouse staffing agencies - if at all? Let us know your thoughts in the Feedback section below.