Transair, a Honolulu-based cargo airline, faced a shutdown from the Federal Aviation Administration following a 2021 crash that raised safety concerns. The company has now paid its employees over $450,000 in back wages to settle with the U.S. Department of Labor.
The Labor Department alleged that Transair had cut pay for 250 employees during their work on a $113 million U.S. Postal Service contract. This contract involved moving mail between Hawaiian islands. A Labor Department spokesperson stated that the pay reductions occurred from October 2019 to October 2021. The back pay also covered overtime dating back to 2018.
The investigation wrapped up in December, but it took additional time to collect and give out the owed wages to the employees.
Transair stopped flying in July 2021. The FAA pulled the operating license of Rhoades Aviation Inc., which ran flights under the Transair brand. This came right after one of its Boeing 737-200 cargo planes had to make an emergency landing in the Pacific Ocean. The National Transportation Safety Board found out that the pilots turned off the good engine when one engine lost power causing the crash.
In January 2023, the FAA revoked Transair’s air carrier certificate, citing poor maintenance and safety practices that disqualified the company from continuing legal operations.
Rhoades Aviation, founded in 1982 by businessman Teimour Riahi, is a division of Trans Executive Airlines of Hawaii and operated as Transair Express. Before it shut down, it had five 737-200 cargo jets for scheduled cargo services. Trans Executive Airlines, which operates separately under the name Transair Hawaii, provides charter flights with four aging Short 360 twin turboprop aircraft.
The Department of Labor accused Rhoades Aviation of “recklessly disregarding” the Postal Service contract’s rules about paying required wages and benefits. Investigators discovered that the company paid 208 workers less than the set wage rates and did not provide proper health, welfare, holiday, or vacation benefits. Additionally, 55 workers were not paid the correct overtime wages.
Terence Trotter, a district director in the Wage and Hour Division, said that Transair failed to follow federal regulations for worker compensation. The Postal Service contract required Transair to meet both delivery standards and proper payment and benefit standards for its workers.
The Labor Department also found that Transair illegally deducted 30 minutes for lunch breaks that were never taken, which led to underreporting and underpaying overtime hours, violating the Fair Labor Standards Act.
Transair did not respond to requests for comment.
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