The Department of Labor yesterday announced one of the largest wage violation settlements ever reached for U.S. poultry workers. A federal court ordered a network of California poultry processors and distributors to pay $4.8 million in back wages and damages to 476 workers. They must also pay $221,919 in penalties.
Under the terms of the settlement, the employers must also forfeit $1 million in profits earned from the sale of hot goods tainted by oppressive child labor and pay penalties of $171,919 for child labor violations. The companies were under a temporary restraining order and an injunction that prevented them from shipping hot goods and required them to lose all profits related to tainted sales.
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The settlement happened Tuesday and comes after a monthslong Wage and Hour Division investigation that found children as young as 14 years old deboning poultry with sharp knives, violating federal child labor regulations. The employers also denied overtime wages, faked payroll records and threatened workers.
Once the companies came under the spotlight in January 2024, facility supervisors told workers they would be putting the "noose around their own necks" by talking to investigators.
Fu Qian Chen Lu and his associated businesses must pay more than $1.8 million in back wages and $3 million in damages to workers. The companies must also pay civil penalties and disgorge profits earned from the hot goods. It comes to about $1 million, which will also go to the underage workers. The court permanently forbids Lu, Bruce Shu Hua Lok and their associates from future violations. Lu and his conspirators promised to ensure future compliance. For example, the businesses must train all managers and supervisors on the Fair Labor Standards Act and hire a third-party compliance officer.
The investigation spanned eight related businesses controlled by Lu, including A1 Meat Solutions, Lotus Plus, Lotus Poultry, Farmers Process, Durfee Poultry, L & Y Food, JRC Culinary Group and Moon Poultry.
These companies supply poultry products to distributors who sell to notable companies, such as Diamond Green Diesel, Diamond Pet Foods, Foster Farms, Mars Pet Care, Perfection Pet Foods and Superior Food. These products also made it to several Nevada hotels and casinos, including Caesar's Palace and The Mirage.
The Labor Department warns distributors and customers to protect themselves against potential liability by requiring producers, manufacturers and other dealers to make sure goods are not made with oppressive child labor.
Last November, the Department of Labor hit another network of California poultry processing companies for child labor violations and recovered some $3.8 million in back wages and other damages.
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