Investigations by the U.S. Department of Labor 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).
Pay violations in the case 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.
“Employers must pay employees all the wages they have legally earned,” said a representative of the Department of Labor. “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, the parent companies 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, the companies 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.
If you have been misclassified as an independent contractor and work more than 40 hours per week, you may be entitled to overtime pay. Contact the attorneys at Pechman Law Group with any questions at 212-583-9500.