Opinion
23-cv-7476 (JGK)
12-09-2024
MACKS USA, INC., ET AL., Plaintiffs, v. U.S. DEPARTMENT OF LABOR, ET AL., Defendants.
DAMIAN WILLIAMS United States Attorney. REBECCA L. SALK Assistant United States Attorney.
DAMIAN WILLIAMS United States Attorney.
REBECCA L. SALK Assistant United States Attorney.
ORDER
John G. Koeltl, United States District Judge.
The Court granted the defendants' motion for summary judgment on November 8, 2024. ECF No. 65. The Court has received the attached Defendants' Prejudgment Interest Report filed on December 9, 2024. See ECF No. 68. Accordingly, the Clerk is directed to enter judgment as follows:
(1) In favor of the defendants Julie A. Su, Acting Secretary, United States Department of Labor, and the United States Department of Labor, and against the plaintiffs Macks USA, Inc. and Mujeeb Rahman, jointly and severally, for back wages owed to the United States in the amount of $147,781.44, plus pre-judgment interest in the amount of $97,684.13 plus $53.34 per diem after December 10, 2024 until the final judgment is entered in this case, see ECF No. 68; plus post-judgment interest pursuant to 28 U.S.C. § 1961(a) which will accrue from the date of the final judgment in this case; and
(2) In favor of the defendants Julie A. Su, Acting Secretary, United States Department of Labor, and the United States Department of Labor, and against the plaintiffs Macks USA, Inc. and Mujeeb Rahman, jointly and severally, for a civil monetary penalty owed to the United States in the amount of $2,500.00.
The Clerk is directed to close the case.
SO ORDERED.
DEFENDANTS PREJUDGMENT INTEREST REPORT
The IRS interest rate changes quarterly, and ranged from 3-8% during the period at issue. The rates are published for each relevant period, as set forth in the interest rate chart located at: https://www.dol.gov/agencies/ebsa/empioyers-and-advisers/plan-administration-and-compliance/correction-programs/vfcp/table-of-underpayment-rates.
Defendants United States Department of Labor (“DOL”), and Julie Su, in her official capacity as Acting Secretary of Labor (collectively, “Defendants”), by and through their attorney, Damian Williams, United States Attorney for the Southern District of New York, hereby submit this Prejudgment Interest Report pursuant to the Court's Order. ECF No. 65. (“Order”). Pursuant to the Court's Order, this report contains “the calculation of the accrued prejudgment interest on the back wages owed by the plaintiffs,” as well as the authorities for interest rates and the per diem prejudgment interest amount that will accrue from the date that the report submitted until the date that judgment is entered in this case.
CALCULATIONS
As directed, the Administrator of the Wage and Hour Division (“WTID”) has determined that Plaintiffs currently owe the United States a principal balance of $147,781.44 in back wages plus $97,630.79 in prejudgment interest as of Dec. 9, 2024, for a total of $245,412.23, plus $2,500 in civil money penalties, for a grand total of $247,912.23. Attached to this Report are an updated Certificate of Indebtedness, attached as Exhibit A, and a copy of a spreadsheet showing how the interest was calculated, attached as Exhibit B. As reflected in the attached Exhibits, WHD computed prejudgment interest on the back pay award in this case using the Internal Revenue Service ("IRS”) interest rate for the underpayment of taxes under 26 U.S.C. § 6621(a)(2). which is the Federal short-term rate for the underpayment of federal taxes plus three percentage points, currently 8 percent.
WHD compounded interest quarterly, consistent with its normal practice, at the following rates, beginning with the date that Jalal's first paycheck was due on April 6, 2012, (through December 9, 2024):
4/6/2012 - 5/1/2016 at 3%
5/1/2016-5/1/2018 at 4%
5/1/2018- 1/1/2019 at 5%
1/1/2019-8/1/2019 at 6%
8/1/2019-8/1/2020 at 5%
8/1/2020-5/1/2022 at 3%
5/1/2022 - 8/1/2022 at 4%
8/1/2022- 11/1/2022 at 5%
11/1/2022-2/1/2023 at 6%
2/1/2023 - 11/1/2023 at 7%
11/1/2023 - 12/9/2024 ar 8%
AUTHORITIES FOR PREJUDGMENT INTEREST RATES
The DOL Administrative Law Judge (“ALJ”) assigned to this case directed WHD to calculate the accrued interest due on the entire amount of back wages due to Mr. Jalal on March 31, 2022. See Certified Administrative Record (“AR”) 1002 (ALJ Decision and Order ALJ No. 2017-LCA-00013 (March 31, 2022) at 13. DOL regulations require that prejudgment interest for administrative litigation before DOL ALJs and/or the Administrative Review Board (“ARB"), be calculated at the Federal short-term rate interest rate charged by the IRS on underpayment of federal income taxes. See 29 CFR 20.58(a) (“The rate of interest prescribed in section 6621 of the Internal Revenue Code shall be sought for backwages [sic] recovered in litigation by the Department.”). Pursuant to I.R.C. § 6621(a)(2), the underpayment rate is the sum of the federal short-term rate plus 3 percentage points. As the ARB has explained:
The regulatory requirement at 29 C.F.R. 20.58(a) to use the IRS rate for back wages “recovered in litigation” applies both to administrative proceedings and to enforcement of administrative decisions in federal court. Cf. Van Asdale v. International Game Technology, 763 F.3d 1089 (9th Cir. 2014) (explaining that the underpayment rate is applied to cases that proceed through the administrative process commence within DOL, while the 28 U.S.C. § 1961 rate governs postjudgment interest calculations in cases involving district court judgments).
[T]he Board has routinely awarded pre- and post-judgment interest on awards in H-1B cases, just as it does in cases arising under other remedial Department of Labor employee protection statutes (citation omitted). The rationale of compensating the
aggrieved employee for loss of the use of his/her money applies equally in all these statutes. Based on Board precedent and the remedial policies underlying the H-1B statutes and regulations, H-1B workers are entitled to pre-judgment and postjudgment compound interest on pay awards until the employer satisfies the debt.Adm'r, Wage & Hour Div. v. Government Training, LLC, ARB 16-049, 2018 WL 2927670, at *6 n.44 (ARB February 23, 2018) (quoting Adm 'r, Wage & Hour Div. v. Greater Missouri Med. Pro-Care Providers, Inc., ARB No. 12-015, slip op. at 24 (ARB Jan. 29, 2014), and citing Adm'r, Wage & Hour Div. v. Univ, of Miami, Miller Sch. of Med., ARB Nos. 10-090, -093, slip op. at 13 (ARB Dec. 20, 2011)). The ARB's practice is to award pre- and post-judgment interest in such cases to be calculated according to the procedures set forth in the ARB's earlier decision in a whistleblower case, Doyle v. Hydro Nuclear Services, ARB Nos. 99-041, 99-042, 00-012 (May 17, 2000) (ordering prejudgment and post-judgment interest at the IRS underpayment rate, compounded quarterly). See, e.g.,Mao v. Nasser Engineering & Computing Services, ARB No. 06-121, slip op. at 11-12 (ARB Nov. 26, 2008) (affirming back pay award in H-1B case and ordering interest to be calculated in accordance with the procedures set forth in 26 U.S.C. § 6621, as articulated in Doyle).
Courts routinely uphold such awards. See, e.g, Huang v. Administrative Review Board, USDOL, 579 Fed.Appx. 228, 2014 WL 3906772 (5th Cir. Aug. 12, 2014) (per curiam), cert, denied, No. 14-8370 (U.S. Apr. 6, 2015) (affirming ARB decision, which, in part, ordered WHD to calculate both pre- and post-judgment interest on the damages award); Sharkey v. Lasmo (AUL Ltd.), 214 F.3d 371, 375 (2d Cir. 2000) (noting that where a damages award includes compensation for lost wages, it is ordinarily an abuse of discretion not to include pre-judgment interest as the basis for the prejudgment interest calculations).
PER DIEM AMOUNT
The Court has also directed the Administrator to calculate the per diem prejudgment interest amount that will accrue “from the date the report is submitted until the date that judgment is entered in this case.” Based on the IRC § 6621(a)(2) interest rate of 8% until 12/31/24, the additional per diem amount will be $53.34/day until that date. Additional interest may be due after 12/31/24 depending on what the IRS rate is for the upcoming quarter and when the Court issues its final judgment.
CONCLUSION
Defendants respectfully request that the Court order Plaintiffs to pay the United States the principal balance of $147,781.44 in back wages plus $97,630.79 in prejudgment interest as of Dec. 9, 2024, for a total of $245,412.23, plus $2,500 in civil money penalties, for a grand total of $247,912.23, as set forth in the attached Certificate of Indebtedness.
(Exhibit Omitted)