Labor Department Recovers $450,000 in Back Pay from Transair
Transair, a cargo airline based in Honolulu, has paid back over $450,000 to its employees as part of a settlement with the U.S. Department of Labor. This action follows the airline’s shutdown by the Federal Aviation Administration (FAA) due to inadequate safety practices after a 2021 crash involving one of its freighters.
The Labor Department announced this week that Transair had underpaid 250 employees on their wages and benefits while working on a $113 million contract with the U.S. Postal Service to transport mail across the Hawaiian Islands. According to Labor Department spokesman Jose Carnevali, the wage discrepancies linked to this contract took place from October 2019 to October 2021, while the back pay for general overtime covered a three-year span dating back to 2018.
The investigation conducted by the Labor Department concluded in December, but it took additional time to recover and distribute the owed wages to the affected workers, Carnevali noted in an email.
Transair ceased operations in July 2021 after the FAA suspended the operating authority of Rhoades Aviation Inc., which operated as Transair, just days after one of its Boeing 737-200 converted freighters crash-landed in the Pacific Ocean. The incident occurred when the pilots attempted to ditch the aircraft after experiencing an engine failure. The National Transportation Safety Board found that the crew mistakenly shut down the functioning engine, leading to the crash.
In January 2023, the FAA revoked Transair’s air carrier certificate, citing the company’s failure to maintain adequate maintenance and safety standards.
Founded in 1982 by Teimour Riahi, a businessman from Iran, Rhoades Aviation is part of Trans Executive Airlines of Hawaii and operates under the name Transair Express. At the time of its closure, Rhoades Aviation was providing scheduled cargo services using five 737-200 cargo jets. Meanwhile, Trans Executive Airlines operates separately under the name Transair Hawaii with four Short 360 twin turboprop aircraft, all over 35 years old, according to public aircraft databases.
The Department of Labor charged that Rhoades Aviation “recklessly disregarded” the wage and benefit requirements outlined in the Postal Service contract. Investigators discovered that Rhoades Aviation had paid below the prevailing wage rates and failed to provide correct health and welfare benefits, as well as holiday and vacation pay to 208 workers. Additionally, it did not pay proper overtime wages to 55 employees.
“TransAir failed to comply with federal service contract regulations regarding worker compensation,” stated Terence Trotter, a district director in the Wage and Hour Division. “The federal contract with the U.S. Postal Service required Transair to uphold not only mail delivery standards but also ensure lawful payment and benefits for workers engaged in these labor-intensive services.”
The Labor Department revealed that Transair had unlawfully deducted 30 minutes for lunch breaks that were not taken, which resulted in an underreporting and underpayment of overtime hours, violating the Fair Labor Standards Act. Transair has not responded to requests for comment.
