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Leachville Staffing Firm Gets Square with Labor Department

3 min read

The U.S. Department of Labor last week said an Arkansas staffing company paid more than $708,000 to settle Fair Labor Standards Act violations — but one of the company’s owners says he’s not heard from the department about its investigation.

In a news release last week, the department said Wallace Rush Schmidt Inc. of Leachville had paid $708,922 in back wages to its employees to settle the violations, which allegedly took place in 2016 in Louisiana. The company has not been fined. 

Wallace Rush Schmidt, which also does business as Wallace Resource Systems and Wallace Staffing & Labor, is owned by Arkansas Sen. David Wallace, Eddie Schmidt of Louisiana and Howard Gerald Rush III of Colorado.

Wallace told Arkansas Business on Wednesday that the department didn’t communicate its findings to the company. 

“In the last two years, we’ve had a payroll of nearly $10 million, and they’re saying that [$708,922] of it was late,” Wallace said. “I went back and looked at my records when they released that. I don’t know what they’re talking about … I don’t know where they got that number, but it must be part of the $10 million that we paid out.”

The department told Arkansas Business on Thursday that the company missed payroll, a violation whether it was missed by one day or 100 days. Wallace Rush Schmidt did not make payroll until after the agency became involved, according to the department. 

The department’s Wage and Hour Division said in the release that Wallace’s company settled overtime, minimum wage and record-keeping violations of the act. The division said investigators found that the company “failed to maintain complete and accurate records,” which led to its failure to pay 1,393 employees hired to help with cleanup after flooding in Louisiana in 2016.

“Investigators determined that limited access to technology likely contributed to a delay in site supervisors’ ability to submit employee time sheets that left many workers unpaid for weeks,” the division said in a news release.

Wallace said the company worked with the Labor Department in 2016 to resolve employees’ complaints.

“They would give us a name, and we’d check it out,” he said. “And we would say, here’s our time sheet, let’s see their time sheet or see what they’re claiming. The vast majority of those folks didn’t have a mistake. We might’ve had 40 or 50 that had a mistake — a few hours — and we paid those.”

Wallace admitted that there might have been delays in getting some people paid. But he added that “if there were 1,393 people that had not been paid, they’d be standing in front of my office and calling us.” 

In all, every employee has been paid, Wallace said, with the exception of one who has been sent two checks and hasn’t cashed them.

Wallace Rush Schmidt filed for Chapter 11 bankruptcy reorganization in March 2017 in U.S. Bankruptcy Court in New Orleans. The company was tied to a bus crash in 2016 in Louisiana that killed three people and injured dozens more, the New Orleans Advocate reported.

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