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-Editorial
Since 2021, the U.S. Department of Labor has observed a disturbing rise in wage theft by customs brokers and freight-forwarding and logistics companies near the Mexican border. This trend is highlighted by three recent investigations in San Diego, which recovered nearly $840,000 for 32 employees, some of whom were paid less than $3 per hour by one employer.
The department’s Wage and Hour Division found that Ruffo de Alba Forwarders LP, SAI Logistics Exports Inc., and Moving Technologies of America Inc. willfully and recklessly shortchanged the affected workers, violating numerous provisions of the Fair Labor Standards Act (FLSA).
“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, investigators found violations by each employer as follows:
Ruffo de Alba Forwarders LP, a customs broker providing logistic and transportation services, failed to pay workers at least the federal minimum wage of $7.25 per hour and denied overtime pay for hours over 40 in a workweek. Some workers were paid as little as $3.27 per hour in Mexican pesos. A consent judgment in the U.S. District Court for the Southern District of California ordered Ruffo de Alba Forwarders and owner Andres Ruffo to pay 14 workers $222,899 in back wages and an equal amount in damages, totaling $445,798, along with $8,645 in penalties to the department. The court also mandated annual FLSA training conducted by an independent third party.
SAI Logistics Experts Inc., another broker assisting in cross-border goods transport, denied Mexican workers their required overtime wages and failed to meet federal minimum wage requirements, paying some as little as $3.86 per hour in Mexican pesos. The same court ordered SAI and its agents to pay $318,249 in minimum wage, overtime, and liquidated damages to 13 workers, and $8,645 in penalties. The company is also required to hire an independent third party for annual FLSA training.
Moving Technologies of America Inc., a transportation and distribution subsidiary of Vadeto Group LLC in San Diego, failed to pay five employees the federal minimum wage, paying them in Mexican pesos, with some earning as little as $2.77 per hour. 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. In 2020, the division recovered $12,225 for four workers after finding that MTA denied them required overtime pay. The investigation also revealed the following:
Owner Edgar Vargas claimed the workers were “independent contractors” paid by OGEID Formacion Empresarial SA DE CV in Mexico, establishing a joint-employer relationship between the two companies. Vargas attempted to conceal the workers’ employment status by assigning them code numbers instead of using their names in the company’s visitors’ log. The company retaliated against Mexican workers who cooperated with investigators by barring them from returning to the facility under investigation, prompting the division to issue a cease-and-desist letter to MTA for such illegal retaliatory actions.
Since 2021, the department has recovered over $5 million in back wages and damages for more than 300 workers employed by customs warehouse, logistics, and freight forwarding employers 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 proteccionsdi@sre.gob.mx 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 transported employees to a local fast-food restaurant quickly when investigators arrived 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 workers shortly thereafter. The department seeks a preliminary injunction to prevent 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.
The division enforces the law regardless of a worker’s immigration status and can speak confidentially with callers in more than 200 languages. For more information about the FLSA and other laws enforced by the division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Download the agency’s free Timesheet App for Android and iOS devices, available in English and Spanish, to help track work hours and pay.