A Texas-based contractor agreed to pay more than $371,000 in unpaid overtime and damages to 95 workers involved in the renovation of the Maile Sky Court Hotel in Waikiki.

R&R Construction Services Corp. of Houston was found by the U.S. Department of Labor’s Wage and Hour Division to have misclassified the workers as independent contractors rather than employees. This resulted in overtime violations when R&R paid the workers fixed rates per day without regard to how many hours they worked. The workers exceeded 40 hours a week and typically worked 10-hour days, six or seven days a week, according to the Labor Department.

The settlement includes $185,688 in unpaid overtime and an equal amount in damages for a total of $371,376, or $3,909.22 per worker. Workers included painters, carpenters, plumbers, laborers and cleaners. R&R Construction has paid the Labor Department on behalf of the workers, and the money is pending disbursement.

In addition, the Labor Department assessed a civil penalty of $68,680 against R&R Construction, according to an announcement made Tuesday by the federal agency.

Last month the state Department of Labor and Industrial Relations fined R&R Construction $767,095 in response to complaints from workers and the Pacific Resource Partnership, which represents the Hawaii Regional Council of Carpenters. DLNR said by classifying the construction employees as independent contractors, R&R Construction avoided requirements to provide unemployment, workers’ compensation, temporary disability and prepaid health care insurance. R&R Construction has 20 days to appeal the fine, which was the largest ever issued by the state Disability Compensation Division.

R&R Construction General Manager Juan Trevino did not return a call Tuesday seeking comment. General contractor Selby Construction did not return an email and a phone call seeking comment. Selby hired R&R Construction as a subcontractor on the $25 million project to renovate the Maile Sky Court, which will reopen as a Holiday Inn Express. Renovations are expected to be completed in the next two months, at which point the re-branding will occur, according to a spokesman for Clearview Hotel Capital LLC, owner of the hotel.

“This case provides a great example of federal and state agencies working together on behalf of disenfranchised workers to more comprehensively safeguard their pay and work conditions,” Terence Trotter, district director of the federal Wage and Hour Division office in Honolulu, said in a statement. “We’ll remain vigilant in our efforts to find other employers utilizing similar schemes to gain a competitive advantage in the marketplace at the expense of workers and lawfully compliant employers.”

Trotter said Trevino signed a formal document on behalf of R&R Construction in which Trevino outlined specific steps he will take to come into compliance with state and federal law.

“The most important step is to characterize their workers as employees rather than independent contractors,” Trotter said.

U.S. Sen. Brian Schatz commended the U.S. Department of Labor for its action.

“The penalties underscore our zero tolerance for employers who knowingly exploit their workers and skirt the law for financial gain,” Schatz said in a statement. “It is clear that R&R Construction Services had no regard for the welfare of our residents and our state. Anyone doing business in Hawaii must comply with all employment and labor laws to protect workers and our community.”

California-based Clearview Hotel Capital, which has owned the Waikiki hotel since 2015, said it expects its contractors to adhere to the law.

“Clearview Hotel Capital takes this matter very seriously,” the company said in a statement. “We cannot speak for our contractors. However, Clearview is deeply committed to ensuring the Maile Sky Court is renovated to the highest standards by licensed and qualified workers. We expect and demand our contractors and subcontractors to follow the law and fairly compensate their workers.”

Kyle Chock, assistant executive secretary-treasurer of the Hawaii Regional Council of Carpenters, chastised Clearview for not accepting any responsibility. The Hawaii Regional Council of Carpenters conducted a six-month investigation of Maile Sky Court after learning about work site and employment irregularities from workers on the renovation project.

“While we are pleased with today’s announcement of the additional penalties levied against R&R Construction Services, we believe that Clearview Hotel Capital should also take responsibility for the abuses that have been uncovered by federal, state and county agencies,” Chock said. “It is time for owners to step up the monitoring of their projects to ensure that hardworking men and women, and our community, are not adversely impacted by the conduct of the contractors they hire.”