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More than 700 workers underpaid for overtime at Indiana RV maker get $1.1 million in back pay

By Adam Yahya Rayes, IPB News | Published on in Business, Economy, Government, Statewide News
(Alliance RV)

Several hundred workers are getting a payout from Elkhart-based Alliance RV after federal investigators found the manufacturer “failed to pay proper overtime.”

In a press release, the Department of Labor said $1,158,536 in back pay recovered from Elkhart-based Alliance will be split between 710 workers.

The assembly-line workers “produced recreational travel haulers, towable trailers and 5th wheel campers under the Paradigm, Valor and Avenue brand names.”

Those workers were paid on a “piece rate” basis. That often means workers are paid based on the number of goods they produce split across the hours they worked, rather than a flat hourly wage.

The federal Fair Labor Standards Act still requires “piece rate” employers to pay a minimum overtime bonus for each piece completed after 40 hours.

According to HR firm ADP, employers have two options under the law. They can pay an extra 0.5 percent for each hour after 40 on top of the full regular piece rate. Or they can “pay 1.5 times the piece rate for each piece produced during the overtime hours. The piece rate must be the one actually paid during non-overtime hours and must be enough to yield at least the minimum wage per hour.”

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An investigation found the company “paid less for each piece in weeks when workers worked more than 40 hours,” according to the DOL.

“No matter how they pay, employers must ensure that they comply with overtime obligations and compute overtime wages correctly,” said Jessica Looman, principal deputy wage and hour administrator, in the release. “These recovered back wages are significant and will go a long way to help these workers. We are glad that Alliance RV has now changed its practices to ensure they pay their workers correctly.”

The department offers employers an iOS and Android “timesheet app” that can help ensure they calculate overtime correctly.

Alliance began production at a 110-acre Elkhart facility in 2019. The company did not respond to a request for comment in time for publication.

Contact reporter Adam at arayes@wvpe.org or follow him on Twitter at @arayesIPB.