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Warehouse, Logistics Companies Pay $840K in Wage Theft Investigations

Some workers were paid less than $3 per hour.

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SAN DIEGO – Since 2021, the U.S. Department of Labor has seen a troubling increase in wage theft by customs brokers and freight-forwarding and logistics companies operating near the Mexican border, a trend reflected in three recent investigations in San Diego that recovered nearly $840,000 for 32 employees, some of whom one employer paid less than $3 per hour.

The department’s Wage and Hour Division determined that Ruffo de Alba Forwarders LP, SAI Logistics Exports Inc. and Moving Technologies of America Inc. willfully and recklessly shortchanged the affected workers and violated numerous provisions of the Fair Labor Standards Act.

“The U.S. Department of Labor is committed to continuing its years-long effort to bring the customs broker, warehouse and logistics industry into compliance with the federal workplace guarantees of minimum wage and overtime,” said Regional Solicitor of Labor Marc Pilotin in San Francisco. “Far too many employees who work in these cross-border operations continue to be cheated out of their lawful wages under U.S. law. The department will do all in its power to protect the rights of all people working in our country.”

Specifically, division investigators found violations by each employer as follows:

  • Ruffo de Alba Forwarders LP, a customs broker providing logistic and transportation services, failed to pay at least an hourly minimum wage of $7.25 to workers and denied required overtime pay for hours over 40 in a workweek to employees who traveled from Mexico to the U.S. In some cases, the employer paid workers as little as $3.27 per hour in Mexican pesos. To settle the matter, the department obtained a consent judgment in the U.S. District Court for the Southern District of California that ordered Ruffo de Alba Forwarders and owner Andres Ruffo to pay 14 workers $222,899 in wages owed and an equal amount in damages totaling $445,798, as well as $8,645 in penalties for their misconduct to the department. The court also ordered the employers to hire an independent third-party to conduct FLSA training annually.
  • SAI Logistics Experts Inc., also a broker assisting the cross-border goods transport, denied Mexican workers their required overtime wages and failed to meet federal minimum wage requirements. The employer paid Mexican workers as little as $3.86 per hour in Mexican pesos. A consent judgment entered by the same court ordered SAI and its agents to pay $318,249 in minimum wage, overtime and liquidated damages owed to 13 workers and pay the department $8,645 in penalties. The court also required the company to hire an independent third-party to provide FLSA training at least once a year.
  • Moving Technologies of America Inc., a transportation and distribution subsidiary of Vadeto Group LLC in San Diego, failed to pay five employees federal minimum wages as required, instead paying them in Mexican pesos and some workers as little as $2.77 per hour. Following its investigation, the division recovered $75,132 — representing $37,566 in back wages and an equal amount in damages — for five employees and assessed $3,324 in penalties for its willful and repeated disregard of the law. In 2020, the division recovered $12,225 for four workers after finding MTA denied them required overtime pay. In addition to recovering back wages, the investigation found the following:
    — In attempting to defend the company’s actions, owner Edgar Vargas alleged the workers were “independent contractors” paid by OGEID Formacion Empresarial SA DE CV in Mexico, which investigators learned was another Vadeto Group subsidiary and established a joint-employer relationship between the two companies.
    — Vargas tried to mask the workers’ employment status by assigning them code numbers to use in place of their names when signing the company’s visitors’ log.
    — The company allegedly retaliated against Mexican workers who cooperated with investigators by ordering them not to return to work at the facility under investigation, which led the division to issue MTA a letter to cease-and-desist such illegal retaliatory actions. 

Since 2021, the department has recovered more than $5 million in back wages and damages for more than 300 workers employed by customs warehouse, logistics and freight forwarding employers operating in the San Diego area.

“Companies along the U.S. southern border that mistakenly believe they can exploit Mexican nationals by paying illegally low wages should take note of the outcome of these investigations,” said Wage and Hour Division District Director Min Park-Chung in San Diego. “To root out employers who abuse and exploit workers for profit, the Wage and Hour Division is working closely with the Consulate General of Mexico in San Diego to educate Mexican nationals in the region about their rights as workers, including the right to report labor violations without fear of threats and intimidation.”

The Consul General of Mexico in San Diego Alicia G. Kerber-Palma urges workers to contact the consulate at 619-231-3847 or email [email protected] for additional support, consular protection or legal advice. 

In a related case, the department’s Office of the Solicitor filed a lawsuit against NBG Logistics Alliance Inc. in the Southern District of California on June 21, 2024, after the Wage and Hour Division discovered that the employer ferried employees to a local fast-food restaurant quickly when investigators showed up at an NBG warehouse. The employees were then told to return to Mexico, preventing them from meeting with investigators onsite. The company later fired some of the workers shortly after. The department seeks a preliminary injunction forbidding further retaliation against workers and interference with the investigation. 

The division’s San Diego District Office investigated these cases, and the Office of the Solicitor in San Francisco negotiated the consent judgments on behalf of the department.

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