SAN DIEGO – Since 2021, the U.S. Department of Labor (USDOL) has seen a disturbing increase in wage theft committed by customs brokers, freight-forwarding, and logistics companies near the Mexican border. This trend was reflected in recent investigations in San Diego, which recovered nearly $840,000 from 32 employees. One employer paid some of them less than $3 an hour.
The Wage and Hour Division of the Department determined that Ruffo De Alba Forwarders LP and SAI Logistics Exports Inc. and Moving Technologies of America Inc. had willfully and recklessly underpaid the affected workers and violated many provisions of the Fair Labor Standards Act.
Marc Pilotin, Regional Solicitor of Labor in San Francisco, said that the U.S. Department of Labor was committed to continuing their years-long efforts to bring the customs brokers, warehouses and logistics industry into compliance to the federal workplace guarantees of overtime and minimum wage. “Under U.S. laws, far too many employees working in these cross-border activities continue to be cheated of their legal wages.” The Department will do everything in its power to protect all workers in our country.
The division investigators found the following violations by each employer:
- Ruffo de Alba Forwarders LP is a customs brokerage that provides logistic and transportation services. It failed to pay workers the minimum wage of $7.25 per hour and denied overtime pay to employees who traveled to the U.S. from Mexico. In some cases the employer paid workers as low as $3.27 an hour in Mexican pesos. To settle the matter the department obtained a settlement agreement in the U.S. District Court for the Southern District of California. The court ordered Ruffo de Alba Forwarders, and its owner Andres Ruffo, to pay $14 workers $222 899 in wages and $445 798 in damages, as well as $8 645 in penalties for their misbehavior towards the department. The court also ordered that the employers hire an independent third party to conduct FLSA annual training.
- SAI Logistics Experts Inc. also a broker who assists in the cross-border transport of goods, denied Mexican workers overtime wages and failed meet federal minimum wage requirements. The employer paid Mexican employees as little as $3.86 an hour in Mexican pesos. The same court entered a consent judgment ordering SAI and its agent to pay $318.249 to 13 workers in minimum wage, overtime, and liquidated damages, and to pay $8,645 to the department in penalties. The court also ordered the company to hire a third-party independent to provide FLSA education at least once per year.
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Moving Technologies of America Inc. in San Diego is a subsidiary of Vadeto Group LLC that provides transportation and distribution services. It failed to pay federal minimum wages for five employees, and instead paid them in Mexican pesos. Some workers were even paid as little as $2.77 an hour. After its investigation, the division assessed $3,324 as penalties for willful and repeated disregard for the law. It recovered $75,132, which represented $37,566 of back wages and a similar amount in damages, for five employees. In 2020, after discovering that MTA had denied four workers the required overtime pay, the division recovered a total of $12,225. The investigation also found that:
In an attempt to defend his company’s actions Edgar Vargas claimed that the workers were “independent contract workers” paid by OGEID Formacion Empresarial SA DE CV, a Vadeto Group subsidiary in Mexico. Investigators discovered this was another Vadeto group subsidiary and established the joint-employer relation between the two companies.
Vargas attempted to conceal the workers’ employment status, assigning them code numbers that they could use instead of their names to sign the company’s visitor’s log.
The company allegedly retaliated by ordering Mexican workers who had cooperated with the investigators not to return to the facility under investigation. This led the division to send MTA a cease-and-desist letter for such illegal retaliatory action.
Since 2021, more than 300 employees of customs warehouses, logistics, and freight forwarding companies in the San Diego region have been compensated with more than $5,000,000 in damages and back wages.
“Companies along U.S. Southern Border who mistakenly think they can exploit Mexican Nationals by paying illegally lower wages should take notice of the results of these investigations,” said Wage and Hour Division district director Min Park-Chung, in San Diego. The Wage and Hour Division, in collaboration with the Consulate of Mexico in San Diego, is working to root out employers who exploit and abuse workers for profit. This includes educating Mexican nationals about their rights as employees, including the right not to be intimidated or threatened.
For consular protection, legal advice or additional support, the Consul General of Mexico at San Diego, Alicia G. Kerber Palma, encourages workers to contact her consulate by calling 619-231-3847.
In a similar case, the Department’s Office of the Solicitor in the Southern District of California filed a lawsuit on June 21, 2024 against NBG Logistics Alliance Inc. after the Wage and Hour Division found that the employer had ferried workers to a fast-food restaurant when investigators arrived at an NBG warehouse. The employees were told to return home to Mexico and prevented from meeting investigators on site. Several of the workers were fired shortly thereafter. The department is seeking a preliminary order prohibiting further retaliation and interference in the investigation.
The San Diego District Office of the division investigated these cases and the Office of the Solicitor of San Francisco negotiated the settlements on behalf of the Department.