Employee Alleges Traincroft Uses Per Diem ‘Ploy’ to Avoid Paying Overtime

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Traincroft, Inc. faces a proposed class and collective action wherein an employee claims he and other workers have not been paid proper overtime wages.

According to the 12-page case out of Massachusetts federal court, Traincroft, a staffing agency who supplies workers for the aerospace, engineering, medical, and design and drafting industries, has paid employees at their straight-time rate for every hour worked in excess of 40 each week instead of their time-and-a-half overtime rate.

The plaintiff, an aircraft mechanic who works for the defendant in Roswell, New Mexico, says he is paid $26 per hour for every hour worked, regardless of whether he puts in more than 40 hours per week.

“Traincroft simply paid the applicable straight time rate without any overtime premium whatsoever,” the complaint scathes.

The lawsuit claims Traincroft’s “straight time for overtime” pay policy violates both federal and New Mexico law.

The case goes on to claim that Traincroft has attempted to disguise its allegedly unlawful pay policies through a “well-known ploy for evading the [Fair Labor Standards Act’s] overtime requirements” that involves labeling most of its employees’ hourly wages as a “per diem.” The plaintiff says that when he was hired in September 2020, Traincroft labeled his “Taxable Wage Per Hour” as “$9.00 for the first 40 hours.” Additionally, the plaintiff was paid a “Per Diem Rate Per Hour” of $17.00 “for the first 40 hours only,” the suit alleges.

According to the case, the plaintiff’s “per diem” rate is tied to the number of hours he works, such that his “regular rate” equates to $26.00 per hour, an amount considered his “Taxable Wage Per Hour” plus his “Per Diem Rate Per Hour.” Nevertheless, Traincroft pays the plaintiff an “Overtime Rate Per Hour” of $26.00 instead of the $39.00 per hour overtime rate required by federal and state law, the suit says.

The lawsuit claims the defendant alters the ratio of the two rates to maintain the plaintiff’s $26.00 per hour rate, further evidencing Traincroft’s use of its “Taxable Wage” and “Per Diem” rates to avoid overtime wage requirements, the plaintiff contends.

“When New Mexico increased its minimum wage, Traincroft raised [the plaintiff’s] ‘Taxable Wage’ to $10.50, but dropped his ‘Per Diem’ to $15.50 an hour,” the complaint expounds.

According to the suit, Traincroft has applied the same allegedly unlawful pay policy to all of the workers the plaintiff seeks to represent despite being aware of its obligation to pay proper time-and-a-half overtime wages.

The lawsuit looks to cover all hourly Traincroft employees who were paid “straight time” for overtime within the past three years and all hourly Traincroft employees in New Mexico who were paid “straight time” for overtime.

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