Investigations by the U.S. Department of Labor’s Wage and Hour Division have resulted in the recovery of nearly $5.6 million 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, the agency announced.
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.
The nine subcontractors
found in violation are:
- Kallberg Industries LLC, Fort Lauderdale,
- Kennett Consulting LLC, Weston, Florida;
- Bluesource LLC, Durham, North Carolina;
- Suncoast Resources, Houston, Texas;
- Automated Controls and Power LLC/ACP LLC,
- 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; and,
- Able Innovations Inc., Wooster, Ohio.
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
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 José Vázquez. “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
- 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 was approved — that includes these and other measures that are part of an extensive compliance agreement.