A recent U.S. Department of Labor (DOL) investigation recovered $3,573,074 in back wages and benefits for 1,416 employees of a Long Beach-based trucking and warehouse company.
The DOL’s Wage and Hour Division (WHD) investigators found the company violated federal contract provisions of the McNamara-O’Hara Service Contract Act (SCA). Investigators discovered the company failed to pay prevailing wages and required health and welfare benefits to employees for work performed at a Centralized Examination Station operated for the U.S. Customs and Border Protection (CBP) at the Port of Los Angeles/Long Beach. The company received federal funds to provide port drayage service of cargo selected for inspection by the CBP at a centralized examination facility.
“No contractor receiving federal funds to provide services to the government should gain an economic advantage by paying workers below the wages and fringe benefits required by applicable law,” Wage and Hour Division District Director Kimchi Bui in Los Angeles said in a press release.
According to investigators, the company also failed to apply the SCA clauses and wage determination to contracts for five subcontractors, which resulted in the subcontractors’ failure to pay required prevailing wages and fringe benefits to their employees as well.
“Workers must be paid what they are legally owed for their work. Violations can be avoided, and we encourage employers to reach out to us for guidance,” Bui said.
Employers must keep in mind the wage and hour requirements for specific industries, especially if your company has certain federal contracts. Any violation discovered by the U.S. DOL can lead to steep fines and losses for your company.
Vannessa Maravilla, Editor, CalChamber
CalChamber members can read more about Wage and Hour Requirements for Specific Industries in the HR Library. Not a member? See how CalChamber can help you.