3 customs warehouses at San Diego border ordered to pay over $1.9 million in back wages and penalties

Three customs warehouses near the San Diego-Tijuana border were ordered to pay more than $1.9 million in back wages and fines after attorneys with the U.S. Department of Labor investigated their employment practices.

The companies paid employees who crossed from Mexico to work in their Otay Mesa warehouses using Tijuana-based affiliates who paid in pesos and at rates as low as the equivalent of $2.50 in dollars per hour, according to a news release issued by the U.S. Department of Labor. That’s well below the federal minimum wage of $7.25.

The department also noted the employees were not paid for overtime work.

“Through our enforcement efforts, these San Diego employers have come to realize that they cannot avoid federal labor protections simply because their employees return home across the border at the end of the workday,” said Solicitor of Labor Seema Nanda. “We encourage others in this industry to take heed and avoid the costly consequences of worker exploitation by paying their employees as legally required.”

The judge-ordered payments are the result of consent judgments filed in federal court in San Diego.

A.G.A. Investments II Inc., operating as Columbia Export Group, and owner Arturo Ruffo will be required to pay $267,408 in minimum wages and $648,269 in overtime to 60 employees as well as $34,958 in penalties.

OMG Freight Forwarders, OMG Global Logistics and owner Oscar Mayer will have to pay $233,141 in minimum wages and $588,932 in overtime to 31 employees. They will also pay $10,921 in penalties.

Atlas Freight ForwardingInc. was ordered to pay $111,584 in minimum and overtime back wages to 13 employees and $10,790 in penalties.

A.G.A. Investments II Inc., along with Mexico-based counterpart PDSA, said in a joint statement that they chose to resolve the matter without litigation, but they “do not concede that citizens of Mexico who are employed by a Mexican entity and cross the border are automatically and necessarily covered by U.S. wage and hour laws.”

“A.G.A. is a U.S.-based company that only employs U.S. workers,” the statement says. “A.G.A. complies with all applicable U.S. laws regarding its employees. The Department of Labor’s (DOL) investigation targeted Mexican customs inspectors, who are Mexican citizens employed by a Mexico-based company (PDSA), some of whom cross the border to comply with Mexican customs law Article 54 by inspecting goods located at A.G.A.’s warehouse. The DOL started targeting the customs broker industry in 2019. These workers have been traditionally paid pursuant to Mexican employment laws, which has been an industry practice for over 40 years.”

Oscar Mayer, OMG Freight Forwarders, OMG Global Logistics and Atlas Freight Forwarding Inc. did not respond to requests for comment on the situation.

The consent judgment includes an injunction against violating U.S. labor law in the future.

The Department of Labor noted that it had a similar case against Premar Global Warehouse Logistics in 2021.

The department said that it regularly works with the Consulate General of Mexico in San Diego on these kinds of issues.

“Paying warehouse workers below minimum wage and failing to pay overtime are illegal practices that should never be tolerated,” said Carlos González Gutierrez, Consul General of Mexico in San Diego. “May these cases remind us all, both workers and employers, that once the worker crosses the Mexico-U.S. border, U.S. labor law applies and will be soundly enforced.”

He encouraged Mexican workers to contact the consulate if they need support or legal advice.