The owner of Heits Building Services of Central and Northern New Jersey is facing a federal lawsuit for violating labor laws at the expense of the company’s workers. Giuseppe Grammatico has been accused of selling “franchises” to individuals, then treating them like employees instead of independent contractors.
According to the lawsuit, Grammatico heads Grammatico Enterprises Inc. which provides cleaning services through Heits Building Services for customers around New Jersey. He has been charging workers $8,250 to acquire their own cleaning franchise and clean for his clients. However, rather than being treated as independent franchise owners, all monies and contracts were handled by Grammatico.
As pled in the lawsuit, Heits Building Services assigned contracts to franchise owners, collected payments from clients and paid workers their wages after taking a percentage for “management fees.” Workers were prohibited from contacting new clients and were also required to use cleaning products purchased from Heits. The suit also claims that workers did not receive overtime pay.
The lawsuit accuses Grammatico of implementing this particular business model to avoid paying fair wages and overtime. Grammatico denies this claim and purports that many other businesses classify franchises the same way. Moreover, the defendant asserts that his business model benefits franchise owners by providing them with the necessary training and support they need to be successful.
The Labor Department disagrees. In recent years, both federal and regional authorities such as New Jersey’s Wage and Hour Labor Division have grown increasingly aware of the uptrend in what is known as employee misclassification. The independent contractor misclassification is one of the most increasingly common type of labor violations. Employee misclassification deprives workers of wages and benefits and contributes to an unfair business advantage for companies that misclassify workers. If the Labor Department wins the lawsuit against Grammatico, affected workers should recover back wages for unpaid overtime and unpaid Social Security contributions.
Philadelphia Overtime Lawyers at Sidkoff, Pincus & Green Represent Employees in Fair Labor Violation Lawsuits
Our team of Philadelphia overtime lawyers at Sidkoff, Pincus & Green have represented employees in FLSA claims for unpaid overtime. Please call 215-574-0600 or contact us online today to schedule your consultation.