updated 11/18/2008 3:12:51 PM ET 2008-11-18T20:12:51

The former owners of a New Bedford leather goods factory raided last year by immigration agents will pay $850,000 to workers — including illegal immigrants — to settle a lawsuit claiming the company violated wage laws, attorneys said Tuesday.

Michael Bianco Inc. will pay more than $600,000 to 764 former employees for unpaid wages and overtime to settle the lawsuit filed in May 2007. The remaining money will go for such things as legal fees and contributions to community groups that work with immigrants.

"This agreement should send a message to other companies that they have to follow labor laws regardless of workers' immigration status," said Audrey Richardson, an attorney at Greater Boston Legal Services, which filed the lawsuit.

Some of the illegal immigrants arrested in raid who will benefit from the settlement have returned to Guatemala, El Salvador and Honduras; others are still in the U.S. Greater Boston Legal Services is trying to locate former workers who would receive the money.

In March 2007, agents raided Michael Bianco and arrested 361 workers, mostly women from Central America, on federal immigration charges. Earlier this month, company owner Francesco Insolia pleaded guilty to harboring and concealing illegal immigrants.

According to the lawsuit, the company tried to avoid paying overtime by giving workers paychecks from Michael Bianco for day shift work and checks from a bogus second company, called Front Line Defense, for evening shift work.

The separate checks made it appear that workers who put in long hours had not exceeded the 40-hour-a-week mark that triggers overtime pay.

The lawsuit also alleged Michael Bianco had so few time clocks that workers waited in long lines to clock in, then were illegally docked 15 to 30 minutes pay if they were even one or two minutes late.

Workers also were not paid for time spent waiting in line to clock out — sometimes up to a half hour, the lawsuit said.

According to court documents, Insolia created Michael Bianco, Inc., in 1985 to manufacture handbags and leather goods. The company grew from 85 employees in 2001 to 650 by 2006, and it was awarded almost $230 million in U.S. Department of Defense contracts.

The company was sold to Fenton, Mo.-based Eagle Industries more than a year ago.

Immigrant advocates had criticized the March 2007 raid for separating families and leaving children without proper care. U.S. Immigration and Customs Enforcement said the raid was properly handled.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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