Wage and Hour Division (WHD)
U.S. Department of Labor
SAN ANTONIO -- The U.S. Department of Labor has entered into consent findings providing for the payment of $222,542 in back wages owed to 230 employees of Kyu Chul Shin, doing business as Kenís Cleaners in San Antonio. The company violated the requirements of the McNamara-OíHara Service Contract Act (SCA) and the Contract Work Hours and Safety Standards Act (CWHSSA).
ďKenís Cleaners failed to pay the prevailing wage rate and overtime and also misclassified employees,Ē said Cynthia Watson, regional administrator in the Southwest for the Labor Departmentís Wage and Hour Division. ďWe are pleased that the judgment not only includes payment of more than $220,000 in back wages to workers, but debars the company for three years from receiving federal government contracts.Ē
In July 2007, a complaint was filed before the Department of Laborís Office of Administrative Law Judges alleging that the federal contractor had failed to properly pay service employees. The case resulted from an investigation, covering a period of more than two years, by the departmentís Wage and Hour Division office in San Antonio. The division found that Kenís Cleaners failed to pay prevailing wage rates to employees performing laundry, dry cleaning and clothing alterations at Army and Air Force exchange centers at Lackland Air Force Base, Fort Sam Houston and Randolph Air Force Base in San Antonio.
The company since has filed for bankruptcy. The department will be working with the bankruptcy court to ensure these workers receive the back wages owed.
The investigation determined that Kenís Cleaners failed to pay the required wage determination rates, vacation benefits, health and welfare benefits, and overtime for hours worked over 40 in a week. Additionally, the company failed to keep accurate payroll records.
Under the SCA, contractors and subcontractors performing on federal service contracts in excess of $2,500 must pay their service workers no less than the wages and fringe benefits prevailing in the locality. The CWHSSA requires the payment of time and one-half the basic rate of pay for all hours worked more than 40 in a workweek. Contractors must ensure that subcontractors are fully informed of the requirements under federal government contract labor laws.
For more information about the SCA and other federal prevailing wage laws, call the Wage and Hour Division in San Antonio at 210-308-4515 or the divisionís toll-free helpline at 866-4US-WAGE (487-9243). Information is also available on the Internet at http://www.wagehour.dol.gov.
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