A federal court in California has approved a judgment ordering a customs warehouse logistics company to pay $235,000 in back wages and penalties after an investigation found the employer illegally paid warehouse workers as little as $3.38 per hour.

Premar Global Warehouse Logistics employed 16 Mexican nationals to work as merchandise checkers in San Diego in a facility just minutes from the U.S.-Mexico border, according to investigators from the U.S. Department of Labor.

The workers were paid the equivalent of $3.38 to $5.61 per hour in pesos and received no overtime even though they averaged 45 to 51 hours a week, investigators said.

“This case is a wake-up call to the customs warehouse industry. Paying a workforce as little as $3 an hour will not be tolerated,” said Ruben Rosalez, an investigator with the department’s Wage and Hour Division.

“The U.S. Department of Labor will use every legal vehicle in our authority to ensure people working on U.S. soil are paid fairly and that employers who underpay workers do not gain an unfair competitive advantage over employers who comply with the law.”

The investigation found Premar — which operates with Export Dynamics de Mexico in Tijuana, Mexico — violated minimum wage, overtime and record-keeping requirements of the Fair Labor Standards Act (FLSA), according to a release.

The U.S. District Court for the Southern District of California in San Diego ordered that Premar, Export Dynamics and Premar’s owner, Tomas Martinez Leal, pay $154,100 in overtime back wages and $75,900 in minimum wage back wages to the 16 workers.

FreightWaves reached out to officials with Premar Global Warehouse Logistics, but they did not immediately reply for a request for comment.

The court also affirmed the $5,000 civil monetary penalty against Premar Logistics that the division assessed for the employer’s disregard of FLSA requirements.

Attorneys with the department negotiated a resolution of the investigation and the terms of the consent judgment.

The investigation is part of a federal and state compliance initiative to review similar operations along the U.S.-Mexico border.

Outreach events, administrative depositions of operators and interviews with employees held in 2020 and 2021 revealed that wage violations, including paying stateside workers a flat rate in pesos, appear to be widespread in the industry, according to investigators.

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