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.

 

Lockheed Martin settles wage dispute with US Coast Guard

18 wrongly classified workers receive $201K for wages owed

The U.S. Department of Labor has announced an agreement with Lockheed Martin Corp. to settle allegations that the company violated prevailing wage laws while under contract with the U.S. Coast Guard in Petaluma. Eighteen workers have been paid $201,000 in back wages by Lockheed as a result.

A Wage and Hour Division investigation determined that Lockheed violated the prevailing wage requirements of the Service Contract Act by improperly classifying technical instructors/course developers in job categories that did not reflect the duties they performed. As a result of the improper classification, the company paid incorrect prevailing wages.

“Government contracts specify in detailed language how pay and benefits are to be determined. Employers must follow these rules, so that workers are paid correctly,” said Susana Blanco, district director for the Wage and Hour Division in San Francisco. “Government contractors, large and small, should be aware of their obligations under the law.”

The SCA applies to every contract entered into by the U.S. that has as its principal purpose services furnished by contractors. The law 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. Additional information on labor provisions and enforcement of government contracts is available at http://www.dol.gov/whd/govcontracts/.

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.

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.

Enviro & Demo Masters and Gladiators Contracting Corp. ordered debarred from federal contracts

Enviro & Demo Masters Inc. and Gladiators Contracting Corp., along with the companies’ owner Jover Naranjo and foreman Luperio Naranjo Sr., have been ordered to pay a total of $656,646 to 37 workers after failing to pay them the required prevailing wage rates and fringe benefits on a federally funded construction project in New York City. Due to the extent and willful nature of the violations, all parties have been ordered to be debarred from seeking and obtaining federal contracts for a three-year period. In a separate proceeding, the owner and foreman were found guilty in federal court in November 2013 of criminal charges related to the project, including the submission of fraudulent certified payrolls to the New York City Department of Housing Preservation and Development. They were sentenced to six and four years in prison, respectively, on April 9, 2014. They are scheduled to surrender on June 2, 2014.


“These employers deliberately and knowingly committed willful and fraudulent violations of federal government contracts law, and they cheated a largely immigrant workforce. These workers were often required to work for less than one-third of what they should have been paid, creating undue hardship for them and their families,” said Maria Rosado, the Wage and Hour Division’s district director in Manhattan. “The department will continue its effort to ensure that workers are paid the proper wages and will take action to recover payment when workers are denied their rightful compensation. We are also working to create a level playing field among employers, ensuring that unscrupulous employers that underpay workers do not gain a competitive advantage.”


Enviro & Demo Masters Inc. and Gladiators Contracting Corp. were subcontractors performing demolition work on the construction of Hobbs Court and Ciena, two federally funded affordable housing developments in East Harlem. The Hobbs and Ciena projects were part of the Metro North Rehabilitation and Redevelopment Program, which was funded in part by the U.S. Department of Housing and Urban Development under the American Recovery and Reinvestment Act of 2009 through the New York State Division of Housing and Community Renewal and the New York City Department of Housing Preservation and Development.


An investigation by the Wage and Hour Division found that Enviro & Demo Masters falsified certified payroll records by deliberately omitting employees from the payroll, instead listing family members who performed no work on the project and listing wage rates that were not paid to workers. The company also failed to pay 37 workers the prevailing wage rates for their particular job classifications and failed to pay the workers one-and-a-half times their basic hourly rates for all hours worked above 40 in a workweek.


The subcontractors disputed the Wage and Hour Division’s findings, which resulted in a hearing before a Labor Department administrative law judge in June 2012. On April 23, 2014, Administrative Law Judge Lystra A. Harris issued a decision and order affirming the Wage and Hour Division’s findings and instructing the New York City Department of Housing Preservation and Development, which withheld the funds, to release the monies to the Wage and Hour Division for payment to the workers. The decision and order will become final 40 days after issuance if no appeal is filed.


Judge Harris also found the project’s prime contractor, Hobbs Ciena Associates LP and Hobbs Ciena Housing Development Corp., jointly and severally liable for payment of the back wages by its subcontractor Enviro & Demo Masters. On a Davis-Bacon Act covered project, the prime contractor is responsible for the compliance of all subcontractors.


The Davis-Bacon Act requires that all contractors and subcontractors performing work on federal and certain federally funded projects pay their laborers and mechanics the proper prevailing wage rates and fringe benefits, as determined by the secretary of labor. The Contract Work Hours and Safety Standards Act applies to contractors and subcontractors with federal service contracts and federally funded and 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 workweek.


Source: DOL

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

Bigger efforts by small business to win contracts

Survey finds persistent firms get more results

 

By Simon Brody August 20th, 2013

Stricter agency budgets are requiring smaller businesses to work even harder to win federal contracts. A survey conducted by American Express OPEN has found that -- despite a reduction in overall bidding activity over the past five years -- smaller firms willing to compete are getting results.

Of the companies surveyed, many owned by women and minorities, increased investments of time and money in federal contracting are becoming the norm.

Data gathered found the average number of prime contracting bids declined from 19.5 in 2007-2009 to only 5.5 during 2010-2012. Small business contractors on average invested $128,638 in time and resources seeking government contracting opportunities in 2012, a 49 percent increase from 2010.

The figures did find some encouraging news, these harder working smaller companies are showing improved rates of success. Analyzing contracts won versus number of bids, the survey found “with fewer bidding opportunities, active small business contractors are bidding smarter."

The prime contracting success rate is now 55 percent, up from 41 percent three years earlier. The subcontracting success rate is 86 percent, dipping slightly from the 90 percent reported in 2007-2009.

American Express OPEN based their findings on an online questionnaire completed in February and March by 684 small business owners active in federal contracting.
 

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