Rivian subcontractors to pay nearly $400,000 in back wages to Mexican laborers building Illinois production line following state investigation



Robert Channick, Chicago Tribune
Tue, December 21, 2021

Rivian subcontractors agreed to pay nearly $400,000 to resolve allegations they denied overtime wages to 54 Mexican laborers building a new production line at the EV startup’s plant in Normal, Illinois.

The Illinois attorney general’s office announced the settlements Tuesday following a joint investigation with the Illinois Department of Labor that revealed a “chain of subcontractors” employed an “elaborate arrangement” to allegedly avoid overtime pay to Mexicans working on visas at electric vehicle plants in the U.S., including the Rivian facility.

“Any company doing business in our state must follow laws that require workers to be fairly compensated for the hours they work,” Illinois Attorney General Kwame Raoul said in a news release. “This settlement should send a message that employers cannot hide behind subcontractors to avoid responsibility for stolen wages.”

A Rivian spokeswoman did not return a request for comment Tuesday.

The investigation found that after Rivian hired Guangzhou Mino Equipment to build out its production line, the China-based company then subcontracted work to Spain-based IT8 Software Engineering, which then further subcontracted to Mexico-based LAM Automation to obtain much of the workforce for the job. The subcontractors helped laborers in Mexico obtain visas to do construction work at Rivian and other EV plants in the U.S., according to the attorney general’s office.

While LAM was responsible for issuing payments to the workers, Mino and IT8 “shared significant control” over the 54 workers at Rivian’s Normal plant, who typically worked between 60 and 80 hours per week, according to the attorney general’s office. Illinois law requires an overtime premium of 150% of regularly hourly wages above 40 hours worked in a week, which the LAM employees allegedly did not fully receive.

The workers started at the Rivian plant in late May, and the investigation was launched in early July after receiving a tip about potential overtime pay violations, a spokesperson for the attorney general’s office said Tuesday.

Under the settlements, Mino and IT8 agreed to pay $145,000 each in overtime wages and penalties to the 54 employees who worked at the Normal plant. In addition, LAM agreed to pay $100,000 to the workers. Illinois minimum wage law allows employees to recover up to triple the amount of damages for any underpayment of wages. The attorney general’s office said the settlements total 270% of the overtime wages the employees were entitled to receive.

Founded in 2009, Rivian is building an electric truck and SUV, as well as 100,000 custom EV delivery vans for Amazon, an investor in the company. California-based Rivian has nearly 3,900 employees working at its sole production facility, a former Mitsubushi plant in Normal, a college town about 130 miles south of Chicago.

The newly public company, which raised $13.7 billion through a massive initial public offering last month, launched production in September, and is struggling to keep up with demand for its $70,000 EV trucks. Rivian announced last week it is planning to build a second $5 billion assembly plant in Georgia.