US Department of Labor Recovers $1.5m for Laborers, Mechanics Working On Multi-Billion-Dollar Federal Program at California Navy Base

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: March 20, 2024
Release Number: 24-468-SAN

35 contractors violated federal labor laws, shortchanging 413 workers

SACRAMENTO – Widespread violations of federal labor and contracting regulations by nearly three dozen employers with federally funded contracts at Naval Air Weapons Station China Lake resulted in the U.S. Department of Labor recovering more than $1.5 million in back wages and damages for more than 400 workers at the Ridgecrest facility.

Part of an initiative by the department’s Wage and Hour Division, the investigations sought to ensure contractors working on the $3.9 billion earthquake recovery program at NAWS China Lake met federal regulations for the employment of workers on projects supported with federal funds. The initiative seeks to bring construction employers into compliance and hold them responsible for paying workers prevailing wages and health and welfare benefits as required.

In investigations of 35 contractors spanning a two-year period, division investigators recovered more than $1.5 million in back wages and $32,291 in liquidated damages for a total of 413 workers for violations of the Davis-Bacon and Related Acts, the Contract Work Hours and Safety Standards Act, the Service Contract Act and the Fair Labor Standards Act. The division also assessed employers with $14,020 in civil money penalties as a result.

“Federal projects like these often strengthen the region’s economy, but when employers fail to pay workers all the required wages and fringe benefits they’ve earned, the full benefits are not felt,” explained Wage and Hour Division Regional Administrator Ruben Rosalez in San Francisco. “Employers unclear of their legal obligations and workers unsure of their rights can contact us to learn what it takes to comply with federal laws.”

Among the largest violators were subcontractors working on projects awarded to Environmental Chemical Corp., a Burlingame design and construction company doing business as ECC. The company was awarded two contracts as part of the Earthquake Recovery Program, including the largest construction project, the South Airfield Complex at NAWS China Lake. The subcontractors found in violation include:

  • Adecco USA Inc., a Jacksonville, Florida, recruitment and staffing service, failed to pay required prevailing wage rates, health and welfare benefits, and overtime while providing temporary staffing for food service, clerical, maintenance and housekeeping work. The division recovered $626,341 in back wages for 115 workers – some of whom were owed nearly $40,000 – for the violations.
  • Blue Knight Security & Patrol Inc., a Rancho Cordova security guard and patrol service providing security at a temporary housing site for construction workers, failed to pay overtime wages, prevailing wage rates and health and welfare benefits as required by law. The division recovered $313,045 in back wages for 54 workers.
  • Hensel Phelps, a Greeley, Colorado, commercial and institutional building contractor providing construction services, failed to pay prevailing wage rates, health and welfare benefits, and overtime compensation. The division recovered $184,172 in back wages for 37 workers.
  • ATCO Structures and Logistics, a Spring, Texas, prefabricated wood building manufacturer building living units for construction employees, failed to pay prevailing wage rates and overtime wages. The division determined ATCO owed $104,935 in back wages to seven workers.

In addition to these contractors, 31 additional contractors violated federal labor laws. View a list of all employers cited in these investigations.

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FY 2023 Davis-Bacon Act Wage Survey Plan

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Davis-Bacon Act Wage Survey Plan

The U.S. Department of Labor’s Wage and Hour Division will be asking the highway, heavy and building construction industries to participate in Davis-Bacon Act wage surveys in FY 2023 to help the agency establish prevailing wage rates, as required under the Davis-Bacon and Related Acts (DBRA).

The DBRA directs the department to set the prevailing wage rates that reflect the actual wages and fringe benefits paid to construction workers in the local area where the work is performed.

The survey plan for FY 2023 includes active construction project wage data in the following areas and is not limited to federally funded construction projects. Data collection periods are to be determined and posted online. The Wage and Hour Division strongly encourages all stakeholders to participate in these surveys.

State Construction Type Area
North Carolina Highway Statewide
Arizona Highway Statewide
Arizona Heavy Statewide
New Hampshire Building Statewide
Texas Building Metropolitan Counties: Greater San Antonio and Greater Austin
Guam All Types All Areas

Full participation by contractors and interested parties is key to setting accurate prevailing wages and developing complete wage determinations. Accurate wages and complete determinations also reduce the need for contractors to request additional labor classifications.

The best way to participate in the survey is online. The Wage and Hour Division will send notification letters to interested parties and contractors known to the agency. To be included, please submit all data by the survey-specific cutoff date. Contractors and other interested parties do not need to have received a letter to participate in the survey.

Visit our website to learn more about Davis-Bacon and Related Acts and WHD’s Davis-Bacon survey program.

AG Shapiro Calls for Federal Action to Protect Public Construction Workers

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Office of Attorney General Josh Shapiro (PA)
May 17, 2022

HARRISBURG–Attorney General Josh Shapiro and Secretary of Labor & Industry Jennifer Berrier filed comments today in support of the United States Department of Labor’s (“USDOL”) proposed updated regulations to the Davis-Bacon and Related Acts (“DBRA”).

“The Department’s proposal would put in place common-sense rules that experience shows will help enforcement agencies catch serious, intentional violations of the law,” said Attorney General Shapiro. “The men and women who build Pennsylvania’s infrastructure should be paid all of the money they have earned, and honest contractors should not have to compete on an uneven playing field with lawbreakers.”

The DBRA is intended to level the playing field among bidders for public construction contracts and protect workers. The DBRA accomplishes its goal by ensuring that all contractors working on projects that receive federal funding pay the wage rates that prevail in a given geographical region as determined by USDOL. Contractors are generally permitted to satisfy a portion of the required wage by providing qualifying fringe benefits to employees

“It’s been over 40 years since these regulations were significantly updated,” said Secretary Berrier. “These regulations will ensure that workers who perform the important and difficult work of updating Pennsylvania’s infrastructure are paid a true prevailing wage and receive the benefits they deserve.”

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PRIME CONTRACTOR ON NEW YORK FEDERAL RESERVE BANK PROJECT PAYS $420,335 IN BACK WAGES AFTER U.S. DEPARTMENT OF LABOR INVESTIGATION (NY)

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: March 29, 2019
Release Number: 19-0440-NEW

NEW YORK, NY – Tishman Interiors Corp. – the prime contractor for a renovation project at the Federal Reserve Bank of New York – has paid $420,335 in back wages to resolve violations of federal wage laws following a U.S. Department of Labor Wage and Hour Division (WHD) investigation.

WHD found Tishman, which served as the bank’s construction manager on the federally funded project, violated the Davis-Bacon and Related Acts (DBRA), the Contract Work Hours and Safety Standards Act (CWHSSA), and the Copeland Act. The company subcontracted electrical and cable installation work to subcontractors Alan Joel Communications, Crewforce, and Teksystems Management.

Investigators found the bank failed to include DBRA provisions and required wage rates in its contract with Tishman. This omission led to Tishman and the three subcontractors paying their employees at hourly rates lower than the prevailing wages for the work they performed, a DBRA violation. WHD also found all four employers violated the CHWSSA when they failed to pay required prevailing wages for overtime when employees worked more than 40 hours in a workweek. Their failure to prepare and maintain certified payroll records and to sign compliance statements in the payrolls resulted in Copeland Act violations.

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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.

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Federal contractor pays $200k in back wages to employees (WV)

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Dec 15, 2017
Charleston Gazette-Mail

A federal contractor has paid more than $200,000 in back wages to seven employees to resolve three violations of federal law.

B&F Contracting Inc. is the prime contractor for repair and renovation projects at federal buildings in West Virginia and Kentucky, according to a news release from the United States Department of Labor.

The company paid employees less than the prevailing wages required by law, failed to pay overtime to one employee, and failed to maintain required payroll records, according to
an investigation completed by employees in the department’s Wage and Hour Division.

Those actions violated the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act.

The company paid approximately $213,282 in back wages to the affected employees, and all back wages have been paid in full, according to the news release.

“The resolution of this case helps to level the playing field for federal contractors who play by rules and must not be underbid by those who do not,” District Director John DuMont, who is based in Pittsburgh, said in the release.

In addition to the back wages, the company will hire a certified public accountant to oversee its compliance with federal laws and to provide the department with copies of certified payroll records and corresponding time records on a semi-annual basis for a one-year period, according to the release.

If the company commits another violation of the same labor laws, it will be debarred from bidding on federal contracts for three years after the violation.

(See Article)

Drywall contractor owes ‘tapers’ more than $98K in back wages

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PR Drywall of Hillsboro, Oregon, underpays 7 workers in wages and overtime

U.S. Department of Labor              Wage and Hour Division

Release Number: 15-136-SAN       Date: March 3, 2015

PORTLAND, Ore. — Seven “tapers” working for PR Drywall LLC of Hillsboro will receive more than $98,000 in back wages after a U.S. Department of Labor investigation found their employer failed to pay prevailing wages and overtime payments as they worked constructing the Tualatin Marquis Assisted Living Center. Built with federal financing assistance from the U.S. Department of Housing and Urban Development, the project and its contractors were subject to the Davis-Bacon and Related Acts and the Fair Labor Standards Act.

The department’s Wage and Hour Division investigated PR Drywall, a subcontractor on the Tualatin project. The agency determined that the tapers, also called drywall finishers, who prepare and press wet compound into joints, nail or screw holes in the drywall and then cover the wet material with tape, were paid below the prevailing wage rates required by the DBRA. The employees also worked beyond 40 hours in a workweek without being paid time and one-half, as required by law.

PR Drywall was found liable for $89,525 under the DBRA for prevailing wage violations, and $8,557 under the FLSA for overtime violations.

US Department of Labor recovers $106K in fringe benefits for workers on federally financed construction projects

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Date:  February 9, 2015

U.S. Department of Labor
Wage and Hour Division
Release Number: 14-2268-SAN
 

SAN FRANCISCO — An investigation by the U.S. Department of Labor’s Wage and Hour Division discovered that Napa-based Avcon Constructors Inc. did not make timely benefit plan payments on behalf of 19 employees working at the San Francisco Veterans Affairs Hospital and the Training Exercise Warehouse at Fort Hunter Liggett. Employees on these projects were working on federally financed contracts subject to Davis-Bacon and Related Acts regulations. The DBRA requires that contributions to funds for bona fide fringe benefits must be made at least quarterly.

“Taxpayers have the right to expect that federal contractors understand their obligations and comply with the law,” said Susana Blanco, director for the department’s Wage and Hour division in San Francisco. “The department works to ensure workers are paid proper wages and benefits in a timely manner. The agency will take action to recover payment when workers are denied their rightful compensation. We do so to create a level playing field for employers, ensuring those who shortchange workers do not gain a competitive advantage.”

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US Labor Department recovers more than $87K in unpaid wages, overtime for 39 workers on federally funded construction project in Portland, Oregon

Posted by National Alliance for Fair Contracting on

U.S. Department of Labor        Date: January 28, 2015

Wage and Hour Division          Release Number: 14-2311-SAN

 
PORTLAND, Ore. — Sierra Construction Co. Inc. has agreed to pay $87,239 in back wages to 39 employees who worked on The Prescott apartment building, a federally financed construction project in Portland. U.S. Department of Labor investigators found that Sierra and two of its subcontractors failed to pay the prevailing wages required by the Davis-Bacon and Related Acts.

The department’s Wage and Hour Division determined that Sierra, the general contractor, violated the DBRA by improperly classifying workers in lower-paying positions that did not reflect all duties performed by the employees. For example, on the project carpenters and laborers spent significant time working as ironworkers, but were not paid the proper rate, which can be $7 to $15 more per hour than they were typically paid. Sierra also failed to include information listing the required DBRA wage rates in contracts with two subcontractors, who then failed to pay their employees the required prevailing wages.

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