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Iowa Meatpacker Is Fined Nearly $10 Million

October 30, 2008

Meatpacker Is Fined Nearly $10 Million

State labor authorities levied nearly $10 million in fines Wednesday for wage violations at an Iowa meatpacking plant where nearly 400 illegal immigrant workers were arrested in a raid in May.

The fines against Agriprocessors Inc., one of the country’s largest kosher meatpackers, were the largest wage violations penalties ever levied in Iowa, state officials said.

About $9.6 million of the fines were for illegal paycheck deductions the company made for protective jackets and other uniforms that packinghouse workers were required to wear. Iowa inspectors found 96,436 deductions for uniforms from the paychecks of 2,001 workers, and brought fines of $100 per incident.

The workers’ wages had been reduced by $192,597, Iowa officials said.

“You cannot legally deduct for clothing required by the company,” said Kerry Koonce, a spokeswoman for Iowa Workforce Development, the state’s labor department.

Agriprocessors was also fined $339,700 for illegally deducting more than $72,000 from the paychecks of 1,073 workers for “sales tax.”

The company also failed to give final paychecks to 42 workers arrested in the raid and owes $264,786.45 in back wages, Iowa officials said.

The fines cover violations from January 2006 through June of this year, including six weeks after May 12, when immigration authorities arrested 389 workers at the Postville plant, mostly illegal immigrants from Guatemala.

“Once again, Agriprocessors has demonstrated a complete disregard for Iowa law,” Iowa’s labor commissioner, Dave Neil, said in a statement.

Last month the Iowa attorney general brought criminal charges against Agriprocessors for more than 9,300 misdemeanor child labor violations, involving 32 under-age workers. According to those charges, the company hired workers as young as 13 and put them to work using saws, knives and other equipment prohibited for young workers.

Agriprocessors’ chief executive, Bernard Feldman, said the company would fight the charges. “We have grave doubts as to the appropriateness of the claimed violations, and we also take issue with the intended sanction imposed per claim,” said Mr. Feldman, who was named to his post in September, after the child labor indictments were announced.

Also on Wednesday, a human resources manager from the Postville plant pleaded guilty in federal court in Cedar Rapids to harboring illegal immigrants and identity theft. The manager, Laura Althouse, 38, helped illegal immigrant workers obtain false resident visa numbers so they could be hired at the plant, according to her plea.

The charge of identity theft carries a mandatory two-year minimum prison sentence. Ms. Althouse also faces a maximum sentence of 12 years on the harboring charge and fines of up to $500,000. Another human resources manager, Karina Freund, faces similar charges.

Ms. Althouse is the first Agriprocessors manager to be convicted on the identity theft charge, which was also brought against many workers. In plea bargains, more than 200 immigrants pleaded guilty to lesser charges of document fraud. Most finished serving their sentences of five months in prison earlier this month, and were deported.

No federal charges have been brought against senior managers and owners of Agriprocessors. The owner, Aaron Rubashkin, and his son Sholom, the top manager of the plant at the time of the raid, have been indicted in the child labor case.