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Secretary of Labor Thomas E. Perez
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News Release

WHD News Release: [05/15/2012]
Contact Name: Elizabeth Todd or Juan Rodriguez
Phone Number: (972) 850-4710 or x4709
Release Number: 12-0745-DAL

US Labor Departmentís Wage and Hour Division undertakes enforcement initiative at military installations in Oklahoma

OKLAHOMA CITY — The U.S. Department of Labor's Wage and Hour Division has launched an enforcement initiative focused on Oklahoma's major military installations — Fort Sill Army Base and Altus Air Force Base — to inform workers of their rights and ensure compliance by government contractors with federal labor laws such as the McNamara-O'Hara Service Contract Act, Davis-Bacon and Related Acts, and the Fair Labor Standards Act.

This initiative will focus particularly on contractors and subcontractors providing services that rely on the labor of low-wage and vulnerable workers, such as construction, security, landscaping, janitorial and building maintenance, and food services workers. In fiscal year 2011, the Wage and Hour Division's Oklahoma City District Office conducted investigations of more than 50 employers working on government contracts within its jurisdiction, resulting in more than $180,000 in back wages recovered for more than 100 employees.

"This enforcement initiative focuses on contractors and all levels of subcontractors to determine compliance with federal wage and hour laws, including those requiring the payment of locally prevailing wages and the proper classification of employees," said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. "Taxpayers have a right to expect that federal contractors — who are paid with tax dollars — will comply with the law, and the Labor Department will not allow companies to abuse that trust. This initiative underscores the message that the department will use all enforcement tools available, including debarment, to ensure a level playing field. Honest companies must not be placed at a competitive disadvantage."

Federally funded contracts are awarded to employers from a variety of industries to perform essential services for the maintenance and day-to-day operation of U.S. military bases. Federal contracts also are awarded for the construction, alteration and repair of military bases and facilities. Increasingly, prime contractors on federal construction or service projects coordinate production or performance but then subcontract the work out to smaller companies. These subcontractors either employ workers on-site or further subcontract out skilled trades. Because these smaller companies have many competitors, they face intense pressure to lower the cost of their services at the expense of workers' wages and employment conditions.

To identify violations, investigators are interviewing employees and conducting thorough reviews of employment practices, pay records and circumstances of joint employment. When violations are found, the division will enforce the law through litigation, civil money penalties, liquidated damages and debarment from future government contract opportunities to recover workers' wages, ensure accountability among all responsible parties and deter future violations.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers are required to maintain accurate time and payroll records.

The Service Contract Act applies to every contract entered into by the United States or the District of Columbia, the principal purpose of which is to furnish services in the United States through the use of service employees. Contractors and subcontractors performing on such federal contracts must obey minimum wage, and safety and health requirements, and also must maintain certain records unless a specific exemption applies.

Typical SCA violations include the underpayment of service workers due to misclassification; erroneously considering workers exempt without regard to the rules in 29 Code of Federal Regulations Part 541; failing to make timely payment of wages or fringe benefit contributions; a lack of proper record keeping when cash payments are made to satisfy fringe benefit requirements; and failing to notify service employees of the applicable wage and fringe benefit requirements, or failing to post the "Notice to Employees Working on Government Contracts" containing this information in a prominent and accessible place at the work site.

The Davis-Bacon and Related Acts apply to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration or repair (including painting and decorating) of public buildings or public works. These contractors and subcontractors must pay their laborers and mechanics employed under the contract no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area.

DBRA violations can include the misclassification of laborers and mechanics; failing to pay the full prevailing wage, including fringe benefits, for all hours worked (including overtime hours); inadequate record keeping, such as not counting all hours worked or not recording hours worked by an individual in two or more classifications during a day; and failing to maintain a copy of bona fide apprenticeship program and individual registration documents for apprentices.

Information on establishments investigated will be included in the division's enforcement database, which can be viewed online at http://ogesdw.dol.gov. For more information about federal wage laws, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243) or its Oklahoma City office at 405-231-4158. Information also is available at http://www.dol.gov/whd/.