Havpak Inc., a Malvern-based packaging company, has been ordered to pay a total of $358,000 in back wages, damages and a “willful violations” penalty for failing to pay overtime to 126 employees provided by local temporary employment agencies from 2015 to 2018.
Havpak, whose big corporate clients include Procter & Gamble (which has lauded the company for “supplier excellence”) and drug manufacturers, will pay the workers $158,230 in back wages; another $158,230 in liquidated damages; and a civil money penalty of $41,580.
The penalty is “for the willfulness of the violations” after U.S. Department of Labor Wage and Hour Division investigators found violations of the federal Fair Labor Standards Act at Havpak locations in Malvern and King of Prussia, according to a Labor Department statement.
Havpak officials, including owner James Hess, did not return calls to the Malvern office. Havpak lists the 43 Great Valley Parkway location as its headquarters on its Web site. Havpak also has locations in King of Prussia; San Leandro (Silicon Valley), California; Shanghai, China; and Erie, Pa. The company directly employs around 10 in King of Prussia and 80 in Malvern, not counting temps or contractors, according to the Labor Department.
Since its founding in 1991, the company has expanded from boxing or wrapping finished products, to adding engineering and other services. It advertises plastic injection molding, tool design, printing, form full and seal technology, blister and shrink wrapping, metal stamping and custom automation to help clients ship their products efficiently.
During the time covered by the inspection -- May 2015, around the time Havpak opened its new Malvern plant, to June 2018 -- the company hired up to 100 temp workers a day through area staffing agencies to do production work for clients, according to the labor department.
Three of the agencies whose workers Havpak used -- DDT Packing Inc. and TTM Packing Inc., both in Philadelphia, and L&D Staffing in Springfield - “paid temporary staff straight time for all of the hours that they worked, including those in excess of 40 hours in a workweek.” These payments we made despite federal law requiring those hours to be paid “as overtime, at time-and-one-half employees’ regular rates of pay,” according to the labor department.
The use of temp agencies didn’t get Havpak off the hook when they were underpaid, James Cain, the department’s Wage and Hour director for the Philadelphia district, said in a statement.
The government found that Havpak, as a “joint employer” of the workers, is liable for overtime and damages.
Investigators also found Havpak failed to include production bonuses when calculating overtime rates, “resulting in payments at rates lower than those required by law,” and failed to post the required Fair Labor Standards Act information at the job site.