Investigations by the U.S. Department of Labor’s Wage and Hour Division (WHD) have resulted in the recovery of $5,579,939 in back wages and benefits owed to 993 employees of nine subcontractors that provided power generator operation support for hurricane recovery efforts in Puerto Rico. WHD investigators found that the subcontractors violated requirements of the McNamara-O’Hara Service Contract Act (SCA), the Contract Work Hours and Safety Standards Act (CWHSSA), and the Fair Labor Standards Act (FLSA).
As part of the resolution of these investigations, Louis Berger U.S. Inc. and its parent entity Louis Berger Group Inc. – both based in Morristown, New Jersey – have paid $5,030,449 to resolve the SCA and CWHSSA violations while the subcontractors have paid $549,490 for the FLSA violations found by WHD.
WHD investigators discovered violations that included failing to pay employees fringe benefits required by the SCA, and failing to pay required wages to employees misclassified as independent contractors. Additionally, the practice of paying employees flat rates regardless of the number of hours that they worked resulted in overtime violations when those workers exceeded 40 hours in a week, without being paid overtime. WHD cited recordkeeping violations for employers’ failure to maintain a record of the number of hours employees worked.
“Employers must pay employees all the wages they have legally earned,” said Wage and Hour Division Caribbean District Director Jose Vazquez. “These employees – many of whom live in Puerto Rico – have been instrumental in restoring electric power to communities. These back wages will greatly help them to rebuild and support the long-term recovery of the local economy.”
In addition to paying the back wages, Louis Berger US Inc. and Louis Berger Group Inc. have agreed to implement new procedures to ensure pay practices fully comply with applicable laws, and to ensure the compliance of subcontractors with the SCA, CWHSSA, and the FLSA on federal contracts. For three years, Louis Berger U.S. Inc. and Louis Berger Group Inc. have agreed to:
- Appoint an internal compliance manager to oversee subcontractors’ compliance on certain prevailing wage contracts, including the accurate classification of workers;
- Provide subcontractors’ employees with written notice of their job classifications, applicable wage rates, overtime rates, and a description of their fringe benefits;
- Pay wages and fringe benefits found due subcontractor employees if subcontractors fail to pay;
- Include applicable labor standards clauses and SCA wage determinations in subcontracts on certain federal prevailing wage contracts;
- Provide training for employees and subcontractors’ managers and foreman about the applicable requirements of the SCA, CWHSSA, and FLSA; and,
- Implement anti-retaliation provisions.
The U.S. Department of Labor recently filed a consent findings and order, which includes these and other measures that are part of an extensive compliance agreement. The Chief Administrative Law Judge of its Office of Administrative Law Judges has approved the consent findings and order.
The nine subcontractors found in violation include:
- Kallberg Industries LLC, Fort Lauderdale, Florida
- Kennett Consulting LLC, Weston, Florida
- Bluesource LLC, Durham, North Carolina
- Suncoast Resources, Houston, Texas
- Automated Controls and Power LLC/ACP LLC, Lafayette, Louisiana
- HP Services Corp., Cupey, Puerto Rico
- LMD and Assoc. LLC, Charleston, South Carolina
- DK&J Enterprises Inc. doing business as Roy and Dot’s Towing, Rialto, California
- Able Innovations Inc., Wooster, Ohio