Wage and Hour Division (WHD)
U.S. Department of Labor
PHOENIX -- The U.S. Department of Labor has debarred Scottsdale-based janitorial service company Teltara Inc. and five affiliates for failing to properly compensate employees working under contracts with the U.S. government. The debarments resulted from a series of investigations by the Phoenix District Office of the department’s Wage and Hour Division that determined the contractors had failed and then refused to pay hundreds of thousands of dollars in fringe, including health care, pension and welfare, benefits owed to employees.
The final decision and order for debarment was issued by the department’s Office of Administrative Law Judges in San Francisco. The order, in conjunction with an earlier one approving signed consent findings, resolves a lawsuit filed by attorneys with the Labor Department’s Regional Office of the Solicitor in San Francisco on behalf of the secretary of labor to enforce the McNamara-O’Hara Service Contract Act.
The Wage and Hour Division found that the companies did not make required fringe benefit payments to funds of the Laborers’ International Union of North America and the Industrial Technical Professional Employees Union, which resulted in a loss of medical coverage for 77 workers and their families for nearly a year. The employees provided janitorial and housekeeping services at the Luke Air Force Base in Arizona, Mountain Home Air Force Base in Idaho, Groton Naval Base in Connecticut, Seymour Johnson Air Force Base in North Carolina and Eglin Air Force Base in Florida.
“These contractors’ actions – or lack of actions – put vulnerable, low-wage workers and their families in serious jeopardy,” said Ruben Rosalez, regional administrator for the Wage and Hour Division in the West. “Employers enter into federal contracts knowing that they must pay these benefits. When they ignore their responsibilities, they not only cheat their own employees, they gain an unfair advantage over those employers who obey the law.”
Despite initially losing health care coverage, as a result of the department’s intervention in this case, the employees were able to retroactively submit claims for reimbursement. Teltara LLC now has paid a total of $840,225 in overdue fringe benefit payments.
The debarment applies to Teltara Inc. and two former officers, Ralph B. Wahlberg and Tom Barnes, and to the following affiliates: Teltara II LLC, Contract Acquisition Group LLC, Contract Acquisition Group (also known as CAG) Financial LLC, CAG Employer Services LLC and CAG Business Services LLC. The debarment is effective through June 6, 2015, and prevents any of the companies from entering into new federal contracts during this period.
Three other entities that were included in the Office of Administrative Law Judges’ consent findings are not subject to the debarment action because it has been established that they severed all ties with Ralph B. Wahlberg and all other corporate entities involved in the agreement. Two of them, Teltara LLC and Teltara Ndee Tribal Enterprises LLC, remain bound by terms of the consent findings but are not debarred from entering into federal contracts under the current order. The third, Pro Services-Teltara Joint Venture LLC, was required to provide proof that it had been dissolved.
The McNamara-O’Hara Service Contract Act requires contractors and subcontractors performing on federal service contracts in excess of $2,500 to pay service employees no less than the wage rates and fringe benefits found prevailing in the locality for the classification of work that they perform.
For more information about pay and benefit laws pertaining to contractors as well as other wage laws, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd.
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