Home/S.D. New York/Macks USA, Inc v. United States Department of Labor

Macks USA, Inc v. United States Department of Labor

District Court, S.D. New York·Decided December 23, 2024·No. 1:23-cv-07476·Unknown

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK MACKS USA, INC., ET AL., 23-cv-7476 (JGK) Plaintiffs, ORDER - against - U.S. DEPARTMENT OF LABOR, ET AL., Defendants. JOHN G. KOELTL, 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. Dated: New York, New York Fes December 23, 2024 a ie G. Koeltl United States District Judge

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

MACKS USA, INC., AND MUJEEB RAHMAN Plaintitis, No. 23-cv-7476 (JGK) -\V- UNITED STATES DEPARTMENT OF LABOR, AND JULIE SU, ACTING SECRETARY OF LABOR, IN HER OFFICIAL CAPACITY, Defendants.

DEFENDANTS’ PREJUDGMENT INTEREST REPORT 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 (“WHD”) 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 at3% 5/1/2016 - 5/1/2018 5/1/2018 - 1/1/2019 at5% 1/1/2019 - 8/1/2019 at 6% 8/1/2019 - 8/1/2020 at5% 8/1/2020 - 5/1/2022 at3% 5/1/2022 - 8/1/2022 at4%

' 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/employers-and-advisers/plan-administration-and- compliance/correction-programs/vfcp/table-of-underpayment-rates,

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 at 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: [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

2 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 post- judgment interest calculations in cases involving district court judgments).

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