Mexican guest workers hired by a contractor with more than $9 million in state contracts to maintain the shoulders and medians of rural Mississippi roadways were cheated out of their wages. A federal lawsuit on behalf of six workers alleged that the contractor broke federal racketeering laws.
The lawsuit describes how Culpepper Enterprises and its president, Kathy Culpepper, used the nation’s H-2B guest worker program to hire the workers but failed to pay the wages that were promised and reported to the U.S. Department of Labor, which oversees the program. These false statements to the federal government by Culpepper and its labor recruiter, North American Labor Services, violate the Racketeer Influenced and Corrupt Organizations Act.
Culpepper Enterprises of Collins, Mississippi, employed the workers from 2012 to 2014 to fulfill contracts with the Mississippi Department of Transportation. The contractor pledged to pay guest workers the prevailing wage for the area, a legally required wage to ensure employers don’t use the guest worker program to undercut local workers.
Instead of paying the prevailing wage – which ranged from $10.26 per hour in 2012 to $11.11 in 2014 – the H-2B workers were paid the federal minimum wage of $7.25 per hour. In one year, they were underpaid by almost $6 an hour in overtime pay. Culpepper pushed their wages even lower than the minimum wage by illegally deducting fees for equipment, protective gear and overpriced housing.
The company worked with North American Labor Services to recruit seasonal workers from Mexico – each year attesting to the Department of Labor that there was no local labor to fill the positions. Under the H-2B program, workers cannot change jobs. This means if their employer cheats them out of wages or is abusive, they often must choose between continuing to work or returning home, typically in debt from the various fees paid to secure the job.
Defendant North American Labor Services dissolved as a corporation in 2009, but its agents, Jon and Cheri Clancy, continued to do business. They are also named as defendants in the lawsuit. Culpepper Enterprises dissolved as a corporation in 2014.