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Secretary of Labor Thomas E. Perez
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News Release

WHD News Release: [11/15/2012]
Contact Name: Michael D'Aquino
Phone Number: (404) 562-2076
Release Number: 12-2187-ATL

US Department of Labor recovers more than $787,000 in back wages for 124 workers following investigations at Nissan plant in Smyrna, Tenn.

Investigations find contractors on federally funded project violated Davis-Bacon and Related Acts, Contract Work Hours and Safety Standards Act

SMYRNA, Tenn. — The U.S. Department of Labor has recovered $787,548 in back wages for 124 employees who performed work on a federally funded project at the Nissan plant in Smyrna. The investigations were conducted by the department's Wage and Hour Division, found that five contractors violated provisions of the Davis-Bacon and Related Acts as well as the Contract Work Hours and Safety Standards Act, which resulted in the workers being underpaid and not receiving fringe benefits to which they were entitled.

"The misclassification of employees as independent contractors is unacceptable, and something we see all too often in industries that employ vulnerable workers and in which we've historically found significant wage violations," said Nancy J. Leppink, deputy administrator of the Wage and Hour Division. "The federal government's financial support for significant work projects benefits businesses and is also meant, through Davis-Bacon, to maintain a level playing field among employers. Honest employers who play by the rules have a difficult time competing against scofflaws who gain an advantage by underpaying their workers. And workers and their families lose when they are denied the wages they rightfully deserve."

Investigators found that Complete Automation of Lake Orion, Mich., misclassified 48employees as independent contractors and failed to include them on the company's certified payroll. As a result, those employees were paid less than the required DBRA prevailing wage rates and fringe benefits. The employer also violated the CWHSSA when overtime compensation was paid at a lower rate to the workers because of their misclassification. The employer has paid the workers a total of $512,724 in back wages.

Jesco Inc. of Fulton, Miss., improperly classified 34 workers as plumbers rather than pipefitters, resulting in those employees receiving less than the required DBRA prevailing wage rates for the type of work they actually performed. The employer violated the CWHSSA by incorrectly paying overtime compensation based on lower rates. Additionally, the employer required some workers to pay for lodging, which resulted in them receiving less than the prevailing wage and fringe benefits. The company has paid the workers a total of $234,701 in back wages.

T.W. Frierson Contractor Inc. of Nashville, Tenn., improperly classified36 sheet metal and ironworkers as laborers, resulting in those employees receiving less than the required DBRA prevailing wage rates for the type of work they actually performed as well as incorrect overtime pay under the CWHSSA. The company has paid the workers a total of $34,033 in back wages.

Electronics Automation Corp. of Columbus, Ohio, has paid five millwrights $5,455 in back wages for improperly classifying them as laborers, resulting in those employees receiving less than the required DBRA prevailing wage rates for the type of work they actually performed as well as incorrect overtime pay under the CWHSSA.

Custom Window Covering of Antioch, Tenn., has paid one employee $635 in back wages for failing to pay the correct DBRA prevailing wage rate and fringe benefits for the work performed.

"Workers employed on federally funded projects deserve their full pay as required under federal law," said Sandra Sanders, director of the division's Nashville District Office. "Employers are well aware of their obligations to pay prevailing wage rates when they enter such contracts. These investigations underscore the Labor Department's commitment to ensure that proper prevailing wages and fringe benefits are paid to employees working on government contracts. Other employers accepting taxpayer money to perform work on federally financed projects should take this as an opportunity to assess their own payroll practices to verify that they are paying their employees in compliance with federal law."

All of the contractors have agreed to full future compliance with the DBRA and CWHSSA, and to correct all issues identified by these investigations.

The DBRA requires all contractors and subcontractors performing work on federal and certain federally funded projects to pay their laborers and mechanics proper prevailing wage rates and fringe benefits as determined by the secretary of labor.

The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts exceeding$100,000. It requires contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rate of pay for all hours worked over 40 in a week. This act also prohibits unsanitary, hazardous or dangerous working conditions on federal and federally financed and assisted construction projects.

The Wage and Hour Division's Nashville office can be reached at 615-781-5343. Information on the DBRA, CWHSSA and other wage laws is available by calling the division's toll-free helpline at 866-4US-WAGE (487-9243) or visiting http://www.dol.gov/whd/.