US Department of Labor Recovers $633k In Back Wages for 84 Workers for Violations by District of Columbia Development Site’s Subcontractors

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: March 20, 2023
Release Number: 23-462-PHI

Investigators also find some employers falsified records at Southeast residential development
WASHINGTON – The U.S. Department of Labor has recovered $633,029 in back wages for 84 workers denied their full wages and benefits by subcontractors involved in construction of an affordable housing development funded by the District of Columbia.

Three offices of the department’s Wage and Hour Division conducted investigations of six subcontractors hired to work on The Bridge project in the district’s southeast section by the development’s general contractor, McCullough Construction and its first-tier subcontractors. The division found the employers violated the Davis- Bacon Act, Contract Work Hours and Safety Standards Act, and the Fair Labor Standards Act.

The division recovered $292,193 in back wages for 14 employees of MTZ Electric Service LLC of Laurel, Maryland, after determining the subcontractor misclassified workers as independent contractors, failed to pay prevailing wage rates and the required overtime premium, failed to provide health and welfare fringe benefits, and violated recordkeeping requirements when it omitted workers from certified payroll records and falsified certified payroll records. Colonial Electric Company Inc. of Harwood, Maryland – the first-tier subcontractor that hired MTZ Electric – agreed to pay the back wages.

To resolve the case, MTZ’s owner, Victor Martinez, signed a consent agreement to accept debarment, which prohibits the employer from bidding on federally funded construction projects for a period of three years.

The division also recovered $253,146 in back wages for seven workers of Igloo Construction Inc. in Westminster, Maryland. Investigators found the employer failed to pay proper prevailing wages and fringe benefits, falsified certified payroll records, and hired a labor broker who failed to report its workers on weekly certified payroll records. The division held the first-tier contractor – Titan Mechanical Inc. of Manassas Park, Virginia – liable for the back wages because they failed to include the required Davis-Bacon labor standards’ clauses in their subcontract with Igloo.

(Read More)

 

1200px-DOL_WHD_logo.svg

US Department of Labor Finds Honolulu Contractor Failed to Pay Correct Wages, Fringe Benefits to 46 Employees on Federally Funded Projects

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: August 2, 2022
Release Number: 22-1586-SAN

Investigation recovers $156K in back wages, benefits for Tunista Services LLC’s workers

HONOLULU – A U.S. Department of Labor investigation has recovered $156,837 in back wages from a Honolulu contractor who paid 46 workers lower wages than the law allows for the type of work they performed under federal contracts awarded by U.S. Marine Corps, Navy, Army and Coast Guard in Hawaii.

The department’s Wage and Hour Division determined that Tunista Services LLC failed to pay truck drivers, material handling laborers, warehouse specialists, forklift operators, service order dispatchers, janitors and other workers the correct wage rates set by federal law for their services. Instead, the employer paid several workers lower hourly rates than required for their occupations, in violation of the McNamara-O’Hara Service Contract Act.

Tunista Services also violated the provisions in the act – which governs employee pay standards for contractors and subcontractors on federally funded contracts – when they failed to provide the required health benefits, sick leave pay, holiday pay and vacation pay.

In addition, the employer violated the Contract Work Hours and Safety Standards Act, which requires overtime pay for hours over 40 in a workweek. The employer based its overtime calculations on the lower, incorrect wage rate and failed to pay the full overtime due.

The $156,837 recovery includes $84,995 for paying incorrect occupational wages, $56,596 for underpayment of fringe benefits, $14,791 reimbursement for unpaid sick leave and $455 in overtime pay for the affected workers.

“Federal contractors who fail to pay correct wages and fringe benefits shortchange workers, reduce their labor costs illegally and gain unfair advantage over their law-abiding competitors,” said Wage and Hour Division District Director Terence Trotter in Honolulu. “We strongly encourage all federal contractors to review their own pay practices and ensure they comply with the law.”

Learn more about the division, including its search tool to learn if you are owed back wages collected by the division. For confidential compliance assistance about the Service Contract Act and the Contract Work Hours and Safety Standards Act, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Help ensure hours worked and pay are accurate by downloading the department’s Android and iOS Timesheet App for free.

(See Article)

Two Florida companies underpaid workers $175,000. Now, one can’t bid on federal contracts (FL)

Posted by National Alliance for Fair Contracting on

BY DAVID J. NEAL
MARCH 05, 2020 06:54 AM

Two Florida electrical contractors paid $175,413 in back wages and fringe benefits to workers after they violated numerous federal guidelines while working on a West Palm Beach apartment building.

The Department of Labor said Monday the back compensation went to 46 workers or $3,813.32 per worker of Tampa’s Southern Integrated Systems and subcontractor West Palm Beach’s J & Brothers Electrical Corp. This all happened while working on Royal Palm Place in West Palm Beach.

Also, Southern is debarred or banned from bidding on federal contracts for three years.

The company run by manager Jason Dinger, according to state of Florida records, didn’t pay electricians overtime when they earned it, Labor said.

On top of that, Southern “submitted falsified certified payroll records that failed to report accurately all the hours employees worked on the project. Although the employees worked overtime every workweek, the certified payroll did not reflect those hours.”

J & Brothers, run by Juan Vincente Escalante, also tried some shucking and jiving with payroll records. Labor’s Wage and Hour Division investigators saw records that said overtime hours had been paid properly, “despite the employer’s admission that they paid their workers at straight-time rates for all the hours that they worked.”

When some workers spent part of the day or week on other projects, J & Brothers didn’t keep a proper record when they were working on the Royal Palm, a federal project – thus requiring paying the area’s prevailing wages and fringe benefits – and when they were on another project. There was no way for J & Brothers to pay employees accurately.

The “prevailing wages” requirement comes from Davis Bacon and Related Acts. Paying straight time for all hours worked, when there should’ve been overtime violates the Fair Labor Standards Act and the Contract Work Hours and Safety Standards Act (CWHSSA).

(Read More)

Contractors, Your Subcontractors’ Wage And Hour Practices Are Your Business

Posted by National Alliance for Fair Contracting on

J.D. Supra
March 20, 2019

A prime or general contractor may be held jointly and severally liable for any violations, including wage and hour violations, by its subcontractors if the contractor is found to be a joint employer with the subcontractor under applicable federal or state law. As most contractors who work on construction projects covered by the federal Davis-Bacon Act (DBA) (direct contracts) and DBA Related Acts (federal funding or loan guarantees) (together, DBRAs) know, a prime or higher tier contractor is jointly and severally liable for violations by its subcontractors without the requirement of a joint employer finding. Many state prevailing wage laws (which require that wages for construction workers on public works projects be paid according to published wage scales) mirror the DBRAs’ liability law. The consequences for violations of the DBRAs, which are enforced by the U.S. Department of Labor (DOL), include back pay, penalties under the Contract Work Hours Safety Standards Act (CWHSSA) for overtime violations, and debarment from holding or working on any government contracts (after a referral and hearing process) for a period of up to three years.

For these reasons, contractors on DBRAs-covered projects should include terms and language in their subcontracts to help ensure their subcontractors are complying with the DBRAs regarding proper classification of workers, accurate timekeeping, timely payment of the correct prevailing wages and benefits based on job classification and hours worked, proper payment of overtime under CWHSSA, and the submission of accurate certified payroll. While rare, in addition to holding the prime or higher tier contractor responsible for payment of back pay and CWHSSA penalties for subcontractor violations if the subcontractor cannot pay or will not pay, the DOL has debarred prime contractors that have failed to properly monitor their subcontractors with respect to the DBRAs’ requirements.

District of Columbia; Maryland

For construction contractors who work on projects in the District of Columbia (D.C.) or Maryland, there is even more reason to mind the pay practices of subcontractors. In the last few years, both of these jurisdictions have enacted laws that, like the DBA, hold higher tier contractors jointly and severally liable for their subcontractors’ violations of local wage and hour laws.

In D.C., the local wage and hour laws specify that prevailing wages are covered, and can be recovered, in addition to local minimum and overtime wages.

The potential damages that can be recovered are crushing. In D.C., in addition to back pay, a contractor can be liable for an additional three times the back pay in damages (or quadruple recovery) as well as attorneys’ fees and additional penalties. In Maryland, the liability is slightly less, back pay plus two times the back pay in damages (or triple recovery) as well as attorneys’ fees and penalties.

(Read More)