Wage and Hour Division (WHD)
U.S. Department of Labor
US Labor Department's Wage and Hour Division launches labor law enforcement effort at Fort Bliss in El Paso, Texas
Agency aims to ensure compliance by contractors, subcontractors
FORT BLISS, Texas -- The U.S. Department of Labor's Wage and Hour Division has launched a concentrated law enforcement effort at Fort Bliss in El Paso to promote compliance with labor law standards, such as the Davis-Bacon and Related Acts and the Fair Labor Standards Act, by contractors and subcontractors working on a multibillion-dollar construction project.
The division is conducting investigations at multiple project sites throughout the 1,700-square-mile Army installation, which includes the Fort Bliss Military Reservation, McGregor Range Complex and White Sands Missile Range. Investigators are reviewing employment practices, pay records and circumstances of joint employment to identify and remedy common violations. Typical violations in the construction industry include failing to pay prevailing wage rates, failing to pay employees for all hours worked, paying piece-work rates that result in pay below the minimum wage, failing to pay overtime compensation, and misclassifying DBRA- and FLSA-covered employees as independent contractors to circumvent wage laws.
"This enforcement effort focuses on contractors and all levels of subcontractors to determine whether they are complying with federal wage laws, including those requiring the payment of locally prevailing wages and classifying employees properly," 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 their 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."
The misclassification of employees as independent contractors is an alarming trend, particularly in industries such as construction that often employ low-wage, vulnerable workers and in which the Wage and Hour Division historically has found significant wage violations. In 2011, the division collected more than $5.3 million in back wages for minimum wage and overtime violations that resulted from employees being misclassified as independent contractors or otherwise not treated as employees.
Increasingly, large companies such as developers and prime contractors coordinate production but subcontract the work out to smaller companies. These subcontractors either employ workers on-site or further subcontract out skilled trades such as carpentry, electrical work, plumbing and roofing. Because these smaller companies have many competitors, they face an intense pressure to lower the cost of their services at the expense of workers' wages and employment conditions.
Under the FLSA, an employment relationship must be distinguished from a strictly contractual one. An employee – as distinguished from a person who is engaged in a business of his or her own – is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business that he or she serves. For more information, visit http://www.dol.gov/whd/regs/compliance/whdfs13.htm.
The Davis-Bacon Act requires all contractors and subcontractors performing work on federal and certain federally funded projects to pay their laborers and mechanics the proper prevailing wage rates and fringe benefits as determined by the secretary of labor. In addition, the Contract Work Hours and Safety Standards Act requires contractors and subcontractors to pay laborers and mechanics one and one-half times their basic rates for all hours worked over 40 in a week.
Prior to launching this initiative, the Labor Department engaged in outreach and education activities to inform both workers and employers in the El Paso area of their rights and responsibilities. Department representatives met with employer trade organizations and unions, and will continue to conduct events with worker advocacy groups and employer associations. Wage and Hour Division Deputy Administrator Nancy Leppink traveled to El Paso in November and, along with a panel of regional division staff, met with contracting officials and contractors to address specific questions about government contract work.
For more information about federal wage laws, call the division's toll-free helpline at 866-4US-WAGE (487-9243) or its Albuquerque office at 505-248-6100. Information also is available on the Internet at http://www.dol.gov/whd.
U.S. Department of Labor releases are accessible on the Internet at www.dol.gov. The information in this news release will be made available in alternate format (large print, Braille, audio tape or disc) from the COAST office upon request. Please specify which news release when placing your request at (202) 693-7828 or TTY (202) 693-7755. The Labor Department is committed to providing America’s employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit www.dol.gov/compliance.