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RV manufacturer investigated for failing to pay overtime wages

This week, the United States Department of Labor issued a press release detailing an investigation into unpaid overtime wages by Alliance RV. The investigation found that over the course of two years, Alliance failed to properly compensate more than 700 of its warehouse workers for piece-rate work they did beyond the standard 40-hour work week.

In total, the DOL found that $1.15 million in wages were missing. They demanded that Alliance issue back payments to the affected workers.

Who is Alliance RV?

Alliance RV is a relatively new manufacturer, with its first production facility breaking ground in 2019. The company is headquartered in the “RV capital of the world”—Elkhart, Indiana—right near the monolithic Thor Industries. They primarily specialize in luxury fifth wheels and trailers and offer three distinct product lines: Paradigm, Valor, and Avenue.

Alliance prides itself on its company mission statement “Do the Right Thing,” which they proudly hang from its warehouse facility’s walls. The Department of Labor’s findings seems to question this statement’s authenticity.

Overtime wage laws for piece-rate

Rather than paying a flat hourly rate to its workers, Alliance RV pays employees for each product they produce. Theoretically, this is to incentivize production efficiency as it generally results in higher pay the harder you work.

The Fair Labor Standards Act declares that employees’ piece-rate pay divided by the hours they work must still meet minimum wage laws. Additionally, they must receive bonus pay for every piece they produce outside of the standard 40-hour work week. In this regard, employers have two options:

  • Pay an extra 0.5% on everything earned outside of 40 hours
  • Increase the piece-rate pay 1.5 times

According to the Department of Labor’s press release, “Alliance RV LLC paid less for each piece in weeks when workers worked more than 40 hours.” 710 workers were affected by this, and a total of $1,158,536 was incorrectly calculated.

The result

Upon finalizing this investigation, Alliance RV immediately issued backpay to the uncompensated team members. With the case settled, Principal Deputy Wage and Hour Administrator Jessica Looman stated, “We are glad that Alliance RV has now changed its practices to ensure they pay their workers correctly.”

At this time, it’s unclear if Alliance intentionally withheld the proper overtime pay from its workers, or if it was a clerical error that had gone unchecked. The company declined to comment to any media outlets.

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R. Yvalion
2 months ago

The dealership where I’ve purchased all of my RVs carries Alliance products. The service guys have told me they would avoid them. Several of them–the guys that do the work, not service writers, feel they are very poorly constructed in the areas that count. I personally think they are also way overpriced.

Joseph
2 months ago

I’ve looked at their RVs, and I wouldn’t hesitate to buy their product!

Upon finalizing this investigation, Alliance RV immediately issued backpay to the uncompensated team members.”

I’m not going to judge whether it was intentional or not. Bottom line is, they made it right – Immediately. Sounds like a financially secure company with positive cash flow.

Stay safe and always follow FLSA laws,

Joe

Jeff
2 months ago
Reply to  Joseph

Bottom line is, they got caught and payed up to prevent more bad publicity!

John
2 months ago

While I certainly don’t agree with how or what Alliance did I certainly wouldn’t rule out buying one of their RV’s. From what I’ve read and after talking with Alliance owners I would most definitely buy one of their brands. They seem to be one of the very few manufacturers that isn’t building junk. So if you don’t want to even consider buying, then it looks to me like you might be cutting your nose off to spite your face.
If this is, in fact, how they operate then they won’t be in business very much longer. Time will tell.

R. Hoff
2 months ago

At a recent Portland RV Show we viewed the Alliance product and was impressed with the overall appearance and feel of their product. However after reading this article we will be unlikely to support the company. Their loss.

Rob
2 months ago

Piece rate isn’t about “efficiency”. It’s about getting as much product out there as possible, regardless of quality. A writer can bust out entire chapters in minutes, but I bet it would be utter garbage. The same with “efficiency”… the code word for “junk”.
I’d rather pay more for quality than less for shoddiness.

Spike
2 months ago

“The company declined to comment to any media outlets.”

To me, this says it all. If it was some kind of error why wouldn’t they just say so and state how they fixed it so as not to have it happen again?

I wonder how pervasive this is in other RV mfgs? I’ve read…I think right here in these newsletters…that workers in the industry cannot even figure out if they are paid correctly since the pay methodologies are so convoluted.

Piece rate is also, IMO, a major reason for poor quality. “Efficiency” is measured in jamming units through the line one way or the other. If I’m the “normal” line worker and I get more money the more I shove units on to the next guy, why fuss over doing the best quality I can? Especially when I’m being whipped and beaten by mgmt to do so.

Garland
2 months ago

Glad to read about this situation. I’m in the market for a new RV and will make sure to avoid Alliance brands. After all I want to “do the right thing.”

Jesse Crouse
2 months ago

Got caught with their hand in the cookie jar. OOP’S I mean their employees pay checks. All by accident I guess??????????

Allen
2 months ago

I just visited their website. It touts all about their experience in the RV industry as they start up their business. They also tout about the importance of positive relationships with their customers. With all the experience they brought with them, you’d think their team would understand the FLSA law! Any good business owner knows that employees make or break a company – any good business other than the RV industry, apparently. What kind of product do you think disgruntled employees are going to turn out? Unfortunately, the odds that the company will have to do something to fix the situation are in their favor, and not the customer’s, and they know it – otherwise things would’ve changed a long time ago. The fact that they refused to comment in any way shape or form, works against their credibility as well. In my mind, they have taken a number of serious steps backwards, and will need to earn the trust of the consumer all over. Or they could admit what happened and rebuild relationships

Bob p
2 months ago

Yeah a clerical error!

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