Following an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD), fuel distributor Macro Companies Inc., engaged in hurricane recovery activities in Puerto Rico, has paid more than $1.1 million in back wages to 219 employees.
The payments cover violations to the overtime provisions of the Contract Work Hours and Safety Standards Act, the fringe benefits provisions of the McNamara-O’Hara Service Contract Act (SCA), and the recordkeeping provisions of the Fair Labor Standards Act (FLSA), the federal agency confirmed.
WHD investigators found that the Broussard, LA, company paid employees performing hurricane recovery activities a fixed salary per day, without regard to the number of hours that they actually worked.
This practice resulted in overtime violations under CWHSSA when these employees worked beyond 40 hours in a workweek but were not paid an additional overtime premium, as the law requires.
The employer also failed to pay employees benefits required by the SCA, and failed to record the number of hours they worked, as required by the FLSA.
Macro Companies Inc. will work with WHD to ensure that their pay practices in other projects and contracts outside of Puerto Rico comply with the law, the agency noted.
“No contractor should gain an economic advantage by paying workers below the wages and fringe benefits required on a contract,” said José R. Vazquez, district director of the WHD’s Caribbean district office.
“Not only does this practice undercut what the workers involved are legally owed, it results in unfair competition for contractors who play by the rules,” he said. “Violations can be avoided, and we encourage employers to reach out to the Department of Labor for guidance.”
The SCA requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates (including prospective increases) contained in a predecessor contractor’s collective bargaining agreement.
CWHSSA requires that contractors on federal service contracts in excess of $100,000 pay workers overtime after 40 hours worked in a workweek.
The FLSA requires that covered, non-exempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time-and-one-half their regular rates for hours worked beyond 40 per week, and must also keep employee time and pay records.