DOL finds federal contractor misclassified workers as independent contractors

Employees due more than $135K in back wages

 

Employer name: Pegasso Construction & Floor Covering LLC

Investigation site: Office at 1746 Hazel Wood Drive, Marietta, Ga., 30067 and various jobsites including Ft. Gordon army base in Augusta, Ga.

Investigation findings: Investigators from the department's Wage and Hour Division found that Pegasso misclassified all of its workers as independent contractors. This unlawful practice resulted in violations of the Fair Labor Standards Act, the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act. The employer paid many of these workers on a weekly salary basis without regard for the number of hours worked. In some cases this salary, when divided by the number of hours worked, was not sufficient to meet the current federal minimum wage of $7.25 per hour. The contractor also failed to pay legally required overtime when these employees worked beyond forty hours in a workweek. As a result of these violations of the minimum wage and overtime provisions of the FLSA, Pegasso owes 151 employees back wages of $135,819. The firm also violated the DBRA and CWHSSA, which apply to the federally financed work done at Fort Gordon, by not accurately completing the required certified payrolls and by failing to pay overtime to one worker.

Resolution: Pegasso has agreed to future compliance with DBRA, CWHSSA and the FLSA and to pay the back wages. The employer has also put all workers on his payroll and will properly classify them as employees.

Quote: "Misclassification of employees as independent contractors cheats workers of wages and benefits to which they would otherwise be entitled to under the law, subsequently hurting our economy. It also leads to unfair competition because businesses that play by the rules operate at a disadvantage to those that don't. We will continue to work to ensure that workers receive the wages they have rightfully earned."
— Eric Williams, Wage and Hour Division Atlanta District Office Director

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

Federal contractor pays nearly half of a million dollars in back wages

Guards denied prevailing wages, fringe benefits and overtime compensation

 

Employer name: PTS of America LLC doing business as Prisoner Transportation Services of America, Nashville, Tennessee

Investigation sites: PTS corporate headquarters, Nashville, Tennessee; Phoenix-Mesa Gateway Airport, Mesa, Arizona; Alexandria International Airport, Alexandria, Louisiana; and San Antonio International Airport, San Antonio, Texas.

Investigation findings: PTS of America LLC is a prisoner extradition company and an international transporter of detainees. The firm is a subcontractor of CSI Aviation Services Inc., a prime contractor for the U.S. Immigration and Customs Enforcement at several airports.

Wage and Hour Division investigators found that PTS violated the McNamara O'Hara Service Contract Act by failing to pay detention officers the required prevailing wages along with health and welfare fringe benefits. Additionally, the contractor violated the Contract Work Hours and Safety Standards Act by failing to properly calculate and pay overtime compensation to 77 employees. As a result of these violations, PTS owed 204 employees back wages of $430,788 under the SCA and an additional $14,927 in overtime back wages under CWHSSA. PTS also violated Executive Order 13495 by failing to offer jobs to three employees who were employed with the previous contractor. The order requires that workers on a federal service contract who would otherwise lose their jobs as a result of the completion or expiration of a contract be given the right of first refusal for employment with the successor contractor.

Resolution: CSI Aviation Services Inc. has paid a total of $445,715 in back wages, which is being distributed to 204 employees. Under the SCA, a contractor is held financially responsible for monetary wage violations committed by its subcontractors. PTS has agreed to future compliance with SCA, CWHSSA and the Fair Labor Standards Act. Additionally, the company agreed to rehire the three workers who were not offered jobs and paid back wages to them as part of separate administrative action by the National Labor Relations Board.

Quote: "Enforcement of the prevailing wage laws levels the playing field for all contractors and protects the wages of hard-working, middle-class American workers. The Wage and Hour Division will remain vigilant in its enforcement to ensure employees are paid in accordance with prevailing wage laws." said Nettie Lewis, director of the division's Nashville District Office. "We are pleased that we were able to successfully collaborate with the contracting agency and the prime and subcontractor to get these hardworking employees the wages they rightfully earned."

Source: DOL

Lighting Services Inc. excluded from federal contracts for 3 years

Honolulu electrical contractor owes workers more than $1.2M in back wages,
submits false records and attempts to obstruct investigators 

 

A federal electrical contractor, Lighting Services Inc. will pay 38 electricians/technicians more than $1.2 million in back wages after U.S. Department of Labor's Wage and Hour Division investigators determined the company did not pay required prevailing wages to workers at Marine Corps Base Hawaii in Kaneohe Bay. The division also found the employer submitted falsified payrolls and told workers to provide false information to investigators.

Lighting Services Inc. violated the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act and, as a result, the company and owner Scott Wilks are excluded from obtaining federal contracts for three years.

"Businesses that benefit from federal dollars have a responsibility to play by the rules, and that includes paying employees legally required wages," said U.S. Secretary of Labor Thomas E. Perez. "Having a federal contract is a privilege, not a right. And we will remain steadfast in our enforcement of laws that level the playing field for those employers who are doing the right thing."

Investigators found that Lighting Services and Wilks committed multiple egregious violations, including:

• Instructing employees to misrepresent to investigators the type of work that they did
• Requiring employees to falsify time records
• Failing to list numerous workers on certified payroll records
• Paying rates more than $20/hour below required wage rates

The department's regional solicitor in San Francisco brought charges against the contractor, seeking payment of back wages and debarment from federal contracts. The department resolved the charges and obtained appropriate remedies through consent findings approved by an administrative law judge last month.

"An employer cannot reduce its labor costs by underpaying workers the required wage standards in a federally funded construction contract," said Terence Trotter, the division's district director in Hawaii.

"Just as standards of quality must be met on completed electrical work, employers must also adhere to federal standards that safeguard the electricians' pay and working conditions."

The DBRA requires that all contractors and subcontractors performing work on federal and certain federally funded construction projects pay their laborers and mechanics at least the prevailing wage rates associated with their occupations, as determined by the secretary of labor. The CWHSSA, which applies to federal service contracts and federally funded and assisted construction contracts exceeding $100,000, requires workers to be paid one and one-half times their basic rate of pay for all hours worked over 40 in a workweek.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

 

U.S. DOL sues electrical contractor for failing to pay federal contract workers properly

The U.S. Department of Labor has filed a lawsuit with the Office of Administrative Law Judges against LRE Royal Electrical Contractors Inc. and its owner, George E. Smith, to recover $345,077 in back wages for 61 electrical workers. The action also seeks to prevent the company and Smith from obtaining federal contracts for three years.

The filing alleges Smith and his company, doing business as both LRE Electrical Contractors and LRE Electrical, violated the Davis-Bacon and Contract Work Hours and Safety Standards Acts when they paid electrical workers less than the applicable prevailing wage rates and corresponding overtime wages for work performed as part of four government contracts.

The Wage and Hour Division’s Little Rock District Office found that LRE Electrical and Smith did not register electrical workers in approved apprenticeship programs, but classified and paid workers as apprentices. The company and Smith also failed to pay these workers wage rates included in the contracts, which are based on the work an employee actually performs.

“Government contracts specify clearly how pay and benefits must be determined. Employers are required to adhere to these rules and pay workers correctly,” said Cynthia Watson, Wage and Hour administrator in the Southwest. “Contractors know these obligations when they bid on government contracts, and when the contracts are awarded.”

The DBA requires all contractors and subcontractors working on federal and certain federally funded projects to pay their laborers and mechanics proper prevailing wage rates and fringe benefits, as determined by the U.S. secretary of labor. Prime contractors are also responsible for compliance by subcontractors and lower-tier subcontractors.

The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts exceeding $100,000. It requires contractors and subcontractors to pay laborers and mechanics one and one-half times their basic rates of pay for all hours worked over 40 in a workweek. The premium charged to employers for overtime hours when an employee works beyond 40 per week encourages employers to hire more workers on these contracts, thus creating jobs, rather than working fewer employees longer hours.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

US DOL recovers back wages for workers on federally funded construction projects

Larino Masonry Inc. and owners debarred from bidding on federal contracts

The U.S. Department of Labor has secured $2,904,000 in back wages for laborers and mechanics who worked on federally funded construction projects in four New York City boroughs.

A federal administrative law judge approved a settlement requiring Larino Masonry Inc., based in Newark, New Jersey, to pay $1,945,000 in back wages to workers at projects in Manhattan and the Bronx for violating the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act. In a separate, but related case, Larino also agreed to an order to pay $959,000 to workers at projects in Brooklyn and Queens.

Larino admitted that it failed to pay its workers the legally required prevailing wage, fringe benefits and overtime, and submitted falsified certified payrolls to a contracting agency. In addition to paying back wages, Larino and its company president Juan Luis Larino and vice president Maria Larino have been barred from bidding on federal contracts for the next three years.

“Taxpayers should expect that federal contractors understand their obligations and comply with the law,” said Maria Rosado, director of the Wage and Hour Division’s New York City District Office, which investigated the federally funded projects. “When Larino Masonry or any other employer violates labor laws, they cheat their employees and gain an unfair advantage over employers who obey the law. We will hold them accountable.”

“The department’s investigations and litigation demonstrate a commitment to ensuring workers are paid the wages to which they are legally entitled and a level playing field for employers doing business with the government,” said Jeffrey Rogoff, the department’s regional solicitor of labor in New York.

An investigation by the department’s Wage and Hour Division found that Larino Masonry failed to pay the required prevailing wage and fringe benefits to 67 laborers and mechanics on the Hobbs Ciena Project in Manhattan. The Hobbs Ciena Project involved the construction of a nine-story building at 305-307 E. 102nd St. and the rehabilitation of five buildings at 306-324 E. 100th St. in Manhattan. Larino was a first-tier subcontractor to Lettire Construction Corp.

An additional investigation found the same violations affecting 62 laborers and mechanics working on the Claremont Project at 282 E. 171st St. and 1421 College Ave. in the Bronx. Larino was a second-tier subcontractor at the site where, company officials admitted, some skilled tradesmen, such as power equipment operators, were paid as general laborers.

Further investigations found Larino committed violations of the DBRA and CWHSSA on the federally funded 97 Crooke Ave. Reverend Dan Ramm Residence in Brooklyn, where 50 workers were paid improperly, and at the Council Towers VI multifamily housing project in Queens, which found 49 workers owed back wages.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

Corrections Corp. of America violated federal service contract laws

US Department of Labor recovers more than $8M in unpaid wages and benefits for hundreds of California prison employees

Federal prison subcontractor Corrections Corp. of America has paid more than $8 million in back wages and fringe benefits to 362 current and former prison guards, maintenance workers and administrative personnel employed at California City Correctional Center, a federal correctional facility in California City, following an investigation by the U.S. Department of Labor’s Wage and Hour Division.

The investigation conducted by the division’s Los Angeles District Office established that Corrections Corp. of America violated the Service Contract Act and the Contract Work Hours and Safety Standards Act by failing to pay proper prevailing wages, health and welfare benefits, overtime and holiday pay. The investigation uncovered record-keeping violations under the Fair Labor Standards Act.

“Many of the workers, some of whom commuted up to two to three hours to keep our communities safe, will receive more than $30,000 in back pay,” said Ruben Rosalez, regional administrator for the division’s West region. “This recovery sends a message to the prison industry and others that we are watching for workplace violations.”

The SCA applies to every contract entered into by the United States that has as its principal purpose services furnished by contractors. The SCA requires that contractors and subcontractors performing services on covered federal contracts in excess of $2,500 must pay their service workers no less than the wages and fringe benefits prevailing in the locality.

The CWHSSA requires federal service contracts and federal and federally assisted construction contracts over $100,000 to cover contracts to pay laborers and mechanics one and one-half times their basic rate of pay for all hours worked over 40 in a workweek. This act also prohibits unsanitary, hazardous or dangerous working conditions on federal and federally financed and assisted construction projects.

Source: EEOC

This information is intended to be educational and should not be considered legal advice on any specific matter.

Malino Construction barred from bidding on federal contracts for up to 3 years

US Labor Department investigations result in more than $415,000 in back wages for workers on Detroit Palmer Park Square HUD project

U.S. Department of Labor investigations have resulted in over $415,000 in back wages for more than 90 employees performing construction work on the federally funded Palmer Park Square affordable housing in Detroit. The investigations, conducted by the department’s Wage and Hour Division, were part of a multiyear strategic enforcement initiative aimed at combating widespread labor violations on federally funded construction projects in the Detroit area, such as affordable housing construction projects funded by the U.S. Department of Housing and Urban Development.

The investigations found that Malino Construction and several project subcontractors violated provisions of the Davis-Bacon and Related Acts, the Contract Work Hours and Safety Standards Act and the Fair Labor Standards Act. The companies failed to pay prevailing wages, fringe benefits and overtime to construction workers on the project, failed to keep accurate time and payroll records for employees, and provided falsified, certified payroll records to the government.

Due to the extent and willful nature of the violations, Detroit-based Malino Construction, the prime contractor on the project, has been debarred from bidding on federal contracts for up to three years.

“These are tough economic times for the people of Detroit, and the last thing we need is for the workers who are helping to rehabilitate this city to be denied their rightful wages and benefits. With our ongoing initiative, we are working with the Michigan State Housing Development Authority and the Detroit Housing Commission to ensure federal labor law compliance on taxpayer-funded projects,” said Timolin Mitchell, director of the Wage and Hour Division’s Detroit District Office. “The resolution of these investigations, and the debarment of Malino Construction from bidding on future federal taxpayer-funded projects, will help ensure that local prevailing wages and working conditions are not undercut by contractors who violate the law.”

Malino Construction contracted with several other companies for general construction work on the Palmer Park Square multifamily housing units in Detroit that were constructed in 2012 and 2013. On a DBA project, the prime contractor is responsible for the compliance of subcontractors and lower-tier subcontractors. Under the strategic enforcement initiative, 19 investigations focused on the companies working on the project. All contractors found in violation have agreed to comply with applicable wage laws in the future.

Prevailing wage standards provide a safety net of fair wages to workers, their families and communities, and enable local contractors and subcontractors to compete on a level playing field. The Wage and Hour Division’s Detroit office is continuing its strategic enforcement initiative this year to ensure compliance with the wage and fringe benefit requirements that apply to federal and federally assisted contracts.

The DBA requires all contractors and subcontractors performing work on federal and certain federally funded projects to pay their laborers and mechanics the proper prevailing wage rates and fringe benefits, as determined by the secretary of labor.

The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts over $100,000. These require contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rates of pay for all hours worked over 40 in a workweek.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

DOL finds unpaid wages due to workers hired to transport veterans to VA medical centers

An investigation by the U.S. Department of Labor’s Wage and Hour Division has determined that Topeka, Kansas-based Assisted Transportation Inc. failed to pay $616,187 in prevailing wages, fringe benefits and overtime to 52 employees, in violation of the Service Contract Act and Contract Work Hours and Safety Standards Act. The employees provided wheelchair van services to veterans, transporting them between their homes and the Marion and Evansville, Indiana, VA Medical Centers.

“Assisted Transportation received government funding to provide services for our nation’s veterans. It has a legal and moral obligation to abide by the rules of the signed contract that requires proper pay to employees for work performed,” said Norma Cervi, the Wage and Hour Division’s director in St. Louis. “Government contracts include specific requirements regarding pay and benefits. Contractors are aware of these obligations when they bid for jobs and when contracts are awarded. Taxpayers have a right to expect that federal contractors, who are paid with tax dollars, will comply with the law.” The department has filed an administrative complaint with the Office of Administrative Law Judges seeking the back wages due.

Investigators from the division’s St. Louis District Office found that 51 shuttle bus drivers were misclassified as taxi cab drivers and were generally due an additional $3 to $5 per hour. In addition, the company allegedly only paid drivers the prevailing wage when a veteran was in the vehicle. All other time, such as wait time and time spent completing maintenance and paperwork, was considered noncontract time and paid at a lower hourly rate. These practices created fringe benefit violations. Additionally, Assisted Transportation failed to include health and welfare benefits with driver’s holiday pay. One employee was misclassified as a travel clerk when he performed the work of a motor vehicle dispatcher.

The company violated the overtime provisions of the CWHSSA by failing to classify the drivers properly under the SCA and pay legally required overtime at time and one-half the employees’ correct rates for all hours worked over 40 in a workweek. Additional information on labor provisions and enforcement of government contracts is available at http://www.dol.gov/whd/govcontracts/.
Assisted Transportation, which operates facilities in Marion and Evansville, is a subcontractor of Logistic Services LLC, based in Topeka, Kansas.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

Garcia Forest Service debarred from federal contracts for 3 years following DOL investigation

A U.S. Labor Department investigation has resulted in the debarment of Garcia Forest Service LLC, and its president, Samuel Garcia, from eligibility for further service contracts with any U.S. government agency for three years. The investigation found that the Rockingham, N.C.-based company violated the McNamara-O'Hara Service Contract Act and the Contract Work Hours and Safety Standards Act by failing to pay fringe benefits, minimum wage, overtime and holiday pay to workers hired for a reforestation project in the Superior National Forest in Minnesota. Administrative Law Judge Kenneth A. Krantz issued the debarment order in Newport News, Va. The consent findings were filed by the department's Regional Office of the Solicitor in Chicago.

"Contractors that do business with the federal government have an obligation to abide by the law, pay their employees the required contractual rates and benefits, and keep accurate and complete required records," said Laura A. Fortman, principal deputy administrator of the Wage and Hour Division. "The Service Contract Act requires debarment when violations are found unless the high standard of 'unusual circumstances' is met. Debarring this employer illustrates the department's commitment to vigorous enforcement of government contracting laws and helps level the playing field for law-abiding employers."

Garcia Forest Service entered into a contract in 2007 with the U.S. Forest Service, an agency of the U.S. Department of Agriculture, for reforestation services, such as planting seedlings and clearing brush in the Superior National Forest. The company primarily uses the H-2B Visa Program to recruit and employ foreign guest workers to perform seasonal work under its contracts.

An investigation by the department's Wage and Hour Division's district office in Minneapolis found that the company violated the SCA and the CWHSSA by failing to ensure hours worked were accurately reported resulting in minimum wage violations, not paying required fringe benefits, overtime and holiday pay. The company and its president, Garcia, cooperated fully with the Wage and Hour Division during its investigation and subsequently paid 12 workers $27,489 in back wages.

Garcia Forest Service had previously been investigated by the Wage and Hour Division regarding three contracts during the period of 2005-2006. That investigation found the company had failed to pay holiday pay under these contracts. The company provided back wages to the effected employees as a result of the investigation.

The SCA applies to every contract entered into by the United States or the District of Columbia, the principal purpose of which is to furnish services in the United States through the use of service employees. The SCA requires that contractors and subcontractors performing services on covered federal contracts in excess of $2,500 must pay their service workers no less than the wages and fringe benefits prevailing in the locality.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

William J. Lang Land Clearing pays more than $106,000 in back wages following a US Department of Labor investigation

Contractor denies employees prevailing wages, fringe benefits on federally funded project

William J. Lang Land Clearing has been found liable for $106,897 in back wages to 23 employees of the Beaverton heavy equipment company because of an investigation by the U.S. Department of Labor’s Wage and Hour Division. The department found that the company performed work on six federally funded road projects in Michigan, and a departmental administrative law judge issued a decision and ordered the company to pay the back wages that the District Court for the Eastern District of Michigan and the U.S. Court of Appeals for the Sixth Circuit had previously determined were owed to employees.

The investigation found that William J. Lang Land Clearing misclassified power-equipment operators, which resulted in them being paid less than the required prevailing wages and fringe benefits for work on a federally funded project for the Michigan Department of Transportation. This violated the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act. Because the company failed to pay the correct prevailing wage rate, overtime compensation was also calculated inaccurately, in violation of the CWHSSA. The company also improperly took credit toward its fringe benefits requirement by averaging its employee health insurance costs on an annual basis. The department filed an order of reference against the company after the case did not settle administratively.
 
“The resolution of this case will provide long overdue wages to power-equipment operators, who were denied prevailing wages during this contract,” said Timolin Mitchell, director of the Wage and Hour Division’s Detroit District Office. “Enforcement of the prevailing wage laws levels the playing field for all contractors and ensures that workers bring home the wages they have rightfully earned. The department will not be deterred from recovering wages due, even when it takes several years.”

The Michigan Department of Transportation, the contracting agency, has released $84,095 for payment of back wages due that it withheld from payments to the employer during the course of the litigation. William J. Lang Land Clearing has paid the additional wages owed of $22,802.

The Davis-Bacon Act requires all contractors and subcontractors performing work on federal and certain federally funded projects to pay their laborers and mechanics the proper prevailing wage rates and fringe benefits, as determined by the secretary of labor. On a Davis-Bacon Act covered project, the prime contractor is responsible for the compliance of all subcontractors.

The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts of more than $100,000. These require contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rate of pay for all hours worked over 40 in a workweek.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

Employer failed to pay prevailing wage rates on US Department of Energy contract

The U.S. Department of Labor has recovered $175,602 in back wages for 13 employees of Didion Milling, where workers were constructing an ethanol production facility in Cambria. The project was funded in part by a $5.6 million grant from the U.S. Department of Energy. An investigation by the department’s Wage and Hour Division found that the contractor violated prevailing rate, fringe benefit and overtime provisions of the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act.

“The hourly rates paid to many of these workers fell substantially below those required for the categories of work they performed. Not only does this practice undercut what is legally owed to the workers involved, it results in unfair competition,” said Theresa Walls, director of the Wage and Hour Division’s Minneapolis District Office. “Enforcement of the prevailing wage laws levels the playing field for all contractors working on federally funded projects and protects good, local middle-class jobs.”
 
The investigation disclosed that Didion failed to pay construction employees rates required for the categories of work they performed on the project, and further failed to pay required fringe benefits. Some laborers performing work on the job site were paid $14.41 per hour, when the required rate was $22.59. When employees performed work in more than one job category in a week, they were sometimes paid the same rate for all hours worked, rather than the employer paying specific rates for specific jobs, as required. Investigators also found that the company failed to pay employees overtime compensation at time and one-half the proper prevailing wage rates for hours worked beyond 40 in a week.
 
Additionally, Didion Milling failed to maintain accurate records reflecting hours worked in specific job classifications, failed to maintain records of fringe benefit contributions and failed to submit a signed statement of compliance and weekly payroll reports on the project.

The Davis-Bacon Act requires all contractors and subcontractors performing work on federal and certain federally funded projects to pay their laborers and mechanics the proper prevailing wage rates and fringe benefits as determined by the secretary of labor. On a DBA-covered project, the prime contractor is responsible for the compliance of all subcontractors. Requiring prevailing wages on these contracts protects local contractors from being underbid by those from other areas who may otherwise be able to recruit and bring in less expensive labor.
 
The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts over $100,000. These require contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rate of pay for all hours worked over 40 in a workweek.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

US Labor Department investigates BBC Foundations & Flatwork, finds more than $137,000 in back wages due to 31 employees

Contractor denies employees prevailing wages, fringe benefits on federal transit project

BBC Foundation & Flatwork LLC has paid $137,705 in back wages to 31 employees of the Carleton concrete company for performing work on a federal transit project in Toledo, Ohio. An investigation by the U.S. Department of Labor’s Wage and Hour Division found that the contractor violated the Fair Labor Standards Act, Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act.

“In this competitive contracting environment, no contractor should gain an economic advantage by paying workers below the wages and fringe benefits required on a federally funded construction project. Not only does this practice undercut what is legally owed to the workers involved, it results in unfair competition,” said Timolin Mitchell, director of the Wage and Hour Division’s Detroit District Office. “Enforcement of the prevailing wage laws levels the playing field for all contractors and ensures that workers bring home the wages they have rightfully earned.”

Investigators found BBC Foundation & Flatwork paid employees less than the required prevailing wages and fringe benefits for work on a Federal Transit Administration project to build a new Toledo Area Regional Transit Authority facility, violating the DBRA and CWHSSA. BBC, performing work on this project as a subcontractor to The Garrison Co., of Farmington Hills, falsified certified payroll documents it submitted to the contracting agency in an attempt to show payment at the required rates by recording fewer hours than were actually worked. This practice also resulted in a failure to pay employees overtime, since the falsified payroll forms indicated employees worked less hours than they actually did. As a result of these violations of the CWHSSA, liquidated damages were computed and notification was forwarded to the Federal Transit Administration.

Investigators also found violations of the FLSA including a failure to pay employees overtime compensation at time and one-half their regular rates of pay for hours worked beyond 40 in a week. The employer operated under two different business names and failed to combine hours worked when employees performed work under both companies during the same workweek. Additionally, BBC did not maintain time records documenting daily and weekly numbers of hours worked, as required.
The company has paid the back wages found due in full. BBC further agreed to comply with the FLSA, the DBRA and the CWHSSA in the future, and to implement a system to monitor payroll for overtime hours.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week.

The Davis-Bacon Act requires all contractors and subcontractors performing work on federal and certain federally funded projects to pay their laborers and mechanics the proper prevailing wage rates and fringe benefits, as determined by the secretary of labor. On a Davis-Bacon Act covered project, the prime contractor is responsible for the compliance of all subcontractors.

The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts over $100,000. These require contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rate of pay for all hours worked over 40 in a workweek.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

CH Inc. to pay 35 employees nearly $269,000 in benefits, back wages following US Labor Department investigation

Bureau of Prisons’ contractor fails to pay required fringe benefits, overtime

CH Inc. has agreed to pay 35 employees $268,899 in fringe benefits and overtime back wages following an investigation by the U.S. Department of Labor’s Wage and Hour Division, which found that the contractor violated provisions of the McNamara O’Hara Service Contract Act and the Contract Work Hours and Safety Standards Act in its performance of work on a contract with the Federal Bureau of Prisons.

“In this competitive contracting environment, no contractor should gain an economic advantage by failing to pay workers fringe benefits on a prevailing wage contract,” said Michael Staebell, director of the Wage and Hour Division’s Des Moines District Office. “Enforcement of the prevailing wage laws levels the playing field for all contractors and protects the wages of hard-working, middle-class American workers. The Wage and Hour Division will remain vigilant in its enforcement to ensure employees are paid in accordance with prevailing wage laws.”


The investigation found that CH Inc. failed to pay required fringe benefits of up to $3.59 per hour to any employee they considered a part-time employee on the contract, in violation of the SCA. SCA makes no distinction, with respect to its compensation provisions, between temporary, part-time and full-time employees. Such fringe benefits are required for all employees on covered contracts, for all hours paid up to 40 hours per week. The division also found violations of CWHSSA when the company failed to properly calculate and pay overtime rates for hours worked beyond 40 in a workweek.   Council Bluffs-based CH Inc. holds the contract with the Federal Bureau of Prisons to provide employees, such as security guards, food service workers and case managers to a federal residential re-entry facility in Council Bluffs. The company has agreed to pay the back wages found due in full and to comply with the SCA and CWHSSA in the future. 

The McNamara-O’Hara Service Contract Act requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates, including prospective increases, contained in a predecessor contractor’s collective bargaining agreement. Requiring prevailing wages on these contracts protects local contractors from being underbid by those from other areas who may otherwise be able to recruit and bring in less expensive labor. It benefits local employees and local economies and supports good, local middle-class jobs.

The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts over $100,000. These require contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rate of pay for all hours worked over 40 in a workweek. The overtime premium charged to employers for hours worked by an employee beyond 40 per week encourages them to hire more employees on these contracts, thus creating jobs, rather than working fewer employees longer hours.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

US Labor Department investigation finds more than $73,000 in back wages due 15 employees of Eagle Electric Inc.

Company paid substandard rates on federal contract, denied fringe benefits

Eagle Electric Inc. in Houma has paid $73,605 in back wages to 15 current and former employees following an investigation by the U.S. Department of Labor’s Wage and Hour Division, which found violations of the Fair Labor Standards Act, Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act. The company failed to pay employees prevailing wage rates, proper overtime, and fringe benefits for work on a federally financed construction contract to perform electrical services on the Assumption Parish Community Center for the Assumption Parish Police Jury in Napoleonville.
 
“Employers who enter into federal contracts are required to pay prevailing wages and benefits to workers in accordance with stated federal guidelines for the localities in which they live,” said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. “When employers ignore their responsibilities, they not only cheat their own employees, they gain an unfair advantage over those employers who obey the law. The department’s action in this case, and the back wages found due, should put other contractors on notice to ensure that they are paying their employees in compliance with the law.” The investigation by the division’s New Orleans District Office determined that Eagle Electric Inc. failed to pay employees the required prevailing wages and fringe benefits applicable to the classifications of work they performed on the project. Workers performing electricians’ work were paid laborers’ rates, which are lower, and were not paid fringe benefits as required by DBRA. Paying improper hourly rates also created overtime violations when premium pay was based on rates that were too low. Additionally, the investigation found that the employer failed to maintain records, as required by the FLSA.
Eagle Electric performed work on the project, funded by the Department of Housing and Urban Development, as a subcontractor of Lincoln Builders of Baton Rouge Inc. The company agreed to future compliance with the FLSA, DBRA and CWHSSA, and has paid the back wages found due in full.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers are required to maintain accurate time and payroll records.

The DBRA requires all contractors and subcontractors performing work on federal and certain federally funded projects to pay their laborers and mechanics proper prevailing wage rates and fringe benefits as determined by the secretary of labor.

The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts exceeding$100,000. It requires contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rate of pay for all hours worked over 40 in a week.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

 

US Labor Department investigation finds more than $73,000 in back wages due 15 employees of Eagle Electric Inc.

Eagle Electric Inc. in Houma has paid $73,605 in back wages to 15 current and former employees following an investigation by the U.S. Department of Labor’s Wage and Hour Division, which found violations of the Fair Labor Standards Act, Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act. The company failed to pay employees prevailing wage rates, proper overtime, and fringe benefits for work on a federally financed construction contract to perform electrical services on the Assumption Parish Community Center for the Assumption Parish Police Jury in Napoleonville.

“Employers who enter into federal contracts are required to pay prevailing wages and benefits to workers in accordance with stated federal guidelines for the localities in which they live,” said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. “When employers ignore their responsibilities, they not only cheat their own employees, they gain an unfair advantage over those employers who obey the law. The department’s action in this case, and the back wages found due, should put other contractors on notice to ensure that they are paying their employees in compliance with the law.”

The investigation by the division’s New Orleans District Office determined that Eagle Electric Inc. failed to pay employees the required prevailing wages and fringe benefits applicable to the classifications of work they performed on the project. Workers performing electricians’ work were paid laborers’ rates, which are lower, and were not paid fringe benefits as required by DBRA. Paying improper hourly rates also created overtime violations when premium pay was based on rates that were too low. Additionally, the investigation found that the employer failed to maintain records, as required by the FLSA.

Eagle Electric performed work on the project, funded by the Department of Housing and Urban Development, as a subcontractor of Lincoln Builders of Baton Rouge Inc. The company agreed to future compliance with the FLSA, DBRA and CWHSSA, and has paid the back wages found due in full.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers are required to maintain accurate time and payroll records.

The DBRA requires all contractors and subcontractors performing work on federal and certain federally funded projects to pay their laborers and mechanics proper prevailing wage rates and fringe benefits as determined by the secretary of labor.

The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts exceeding$100,000. It requires contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rate of pay for all hours worked over 40 in a week.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.