Attorney General Martha Coakley’s office has reached a settlement agreement with Diaz Construction, formerly of Brockton, now of Avon, and its president, Leonel Diaz, to resolve allegations that the company violated the commonwealth’s wage and hour laws.

Under the agreement, Diaz, 47, of Bridgewater, will pay $142,000 in restitution to 129 former and current employees and a $20,000 penalty to the commonwealth.

In June 2008, the attorney general’s fair labor division began an investigation into the employment practices of Diaz Construction after receiving complaints from former employees alleging that they had not been paid the proper rate for overtime pay. A self-audit of the payroll records by the company revealed that Diaz had unintentionally failed to pay his employees time-and-a-half for overtime hours worked between July 2006 and May 2008.