For the last several years, workers for a building services contractor maintained HAC services, electrical and lighting systems, elevators, fire safety equipment and internal mail distribution at a federal building in Jamaica under a federal contract with the Social Security Administration. The contract was worth $3.4 million in its final year.
The U.S. Department of Labor’s Wage and Hours Division review of the contract found Dellow Corp. failed to pay 14 workers their prevailing wages for the jobs they performed at the Joseph A. Addabbo Federal Building and did not pay proper fringe benefits to the International Union of Operating Engineers Union Local 30, per a collective bargaining agreement.
By doing so, the Hawaiian-based company isolated the McNamara-O’Hara Service Contract Act.
To resolve the matter, the department’s Office of Administrative Law Judges approved consent findings and ordered Dellew Corp. and owners Druscilla Lewis and Kelsey Lewis to comply with the terms of an enhanced five-year compliance agreement intended to ensure future compliance with the Service Contract Act and prevent future violations.
The department’s Office of the Solicitor negotiated the release of $783,616 withheld on the contract prior to litigation.
Specifically, the Wage and Hour Division determined that the contractor failed to pay the employees $47,705 in prevailing wages and $1,102,266 in required health and welfare fringe benefits.
The Wage and Hours Division credited Dellew for $366,377 in payments made during its investigation and requested that the Social Security Administration withhold $783,616 in contract payments to cover the balance.
“Enforcement of prevailing wage laws protects the wages of hard-working, middle-class workers in America,” Wage and Hour Division District Director Jorge Alvarez said. “Violations of the Service Contract Act and other federal wage laws are preventable if employers and employees know and understand their responsibilities and rights under the law. We encourage them to contact the Wage and Hour Division to learn more.”
The Consent Findings and Order requires the employers to hire an independent monitor, knowledgeable of the Service Contract Act and its requirements, whose duties include the following:
- Conducting regular compliance reviews and training
- Reviewing wage determinations and time and payroll records
- Setting up a confidential hotline for employees to report noncompliance
- Investigating allegations of noncompliance
- Providing twice-yearly compliance certification to the Wage and Hour Division
“The U.S. Department of Labor is committed to ensuring employees are paid the wages they have rightfully earned and federal contractors comply with the law,” Regional Solicitor of Labor Jeffrey Rogoff said. “When employers fail to do so, we will pursue appropriate legal means on behalf of the workers and the law.”