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Secretary of Labor Thomas E. Perez
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News Release

WHD News Release: [06/14/2011]
Contact Name: John M. Chavez
Phone Number: (617) 565-2075
Release Number: 11-0691-NEW

US Labor Department recovers $1.3 million in back wages and fringe benefits for employees of Chelsea, Mass., contractor working on Long Island, NY

CAL Construction and owner debarred from federal contracts for 3 years

WESTBURY, N.Y. — The U.S. Department of Labor has recovered $1.3 million in unpaid prevailing wages and fringe benefits for 67 employees of CAL Construction Co. Inc., a Chelsea, Mass.-based contractor, for work performed on a Long Island, N.Y., low-income housing project funded in part by the American Recovery and Reinvestment Act of 2009. The company and owner Cesar A. Lemus, in addition to making this payment, have been debarred from bidding or working on future federally funded contracts for a period of three years.

"The Labor Department will not tolerate federal contractors taking advantage of workers," said Secretary of Labor Hilda L. Solis. "Debarring contractors such as CAL Construction from future contracts helps to ensure a level-playing field. We will hold companies doing business with the federal government accountable for complying with the law."

The Long Island District Office of the department's Wage and Hour Division, located in Westbury, conducted an investigation that found CAL Construction and Lemus willfully violated the Davis-Bacon and Related Acts by underpaying employees performing a variety of trades, including carpentry, painting, tile work and building laborer work on the Bedell Terrace Apartments rehab project in Hempstead, N.Y., from December 2009 to the end of October 2010. The company also violated provisions of the Copeland Act and the Contract Work Hours and Safety Standards Act.

The Recovery Act incorporates provisions of the DBRA, which requires the payment of prevailing wages and benefits to laborers and mechanics employed on federal and certain federally funded projects. The division's investigation found that some workers were paid only a fraction of the prevailing wages and fringe benefits due, frequently 50-60 percent less per hour than the required prevailing wage rates, and that the company paid workers both on and off the books. CAL Construction also failed to pay required fringe benefits to its nonunion workers, as well as to members of two local trade unions that supplied some additional workers to the housing project.

Workers who were transported to the Bedell Terrace project from their homes in Massachusetts were not paid the cost of their lodging by CAL Construction, resulting in additional violations of the DBRA's prevailing wage requirements.

CAL Construction also violated the provisions of the Copeland Act by submitting falsified certified payrolls to the government. Additionally, the company did not pay workers time and one-half the base rate of pay for hours worked over 40 in a workweek, a violation of the CWHSSA. Furthermore, it required many employees to pay back a portion of their wages to the company each week, and coerced employees into not cooperating with the Wage and Hour Division during the course of the investigation.

A Labor Department administrative law judge has issued an order approving consent findings agreed to by CAL Construction, Lemus and the Wage and Hour Division resolving this matter.

The prime contractor on the Bedell Terrace Apartments project was Omni of NY LLC, while the first tier subcontractor was Renewal Construction Services LLC. CAL Construction was a subcontractor to both of those companies on the project. The Labor Department is continuing to review a number of other subcontractors on the Bedell Terrace project to determine their compliance with the DBRA.

For more information about the DBRA, CWHSSA and other federal laws administered by the Wage and Hour Division, call its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd/.