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News Release

U.S. Department of Labor Recovers $2.8 Million for 443 Employees Of Federal Contractor in New York and New Jersey After Investigation

NEW YORK, NY – After an investigation by the U.S. Department of Labor's Wage and Hour Division (WHD), federal contractor Fedcap Rehabilitation Services Inc. has paid $2,830,146 to 443 employees at 17 New York and New Jersey locations to resolve violations of the McNamara-O'Hara Service Contract Act (SCA).

WHD investigators determined that the New York City-based company failed to pay required fringe benefits into employee retirement accounts for over one year. When it eventually did, the company failed to correctly calculate and pay the proper health and welfare fringe benefits to employees for all the hours they worked at 26 Federal Plaza in New York City. WHD expanded its investigation to include 18 other federal offices and facilities served by Fedcap throughout New York and New Jersey and found violations at 17 locations. WHD also found that the employer illegally deducted third-party administrative fees from employees' pay.

"When employers receive federal funds to provide services to the government, they must comply with all applicable laws to ensure that their employees receive legally required pay and benefits," said David An, Wage and Hour Division District Director in New York City. "The McNamara-O'Hara Service Contract Act protects the wages of employees, and keeps a level playing field for employers. Violations can be avoided, and we encourage employers to reach out to us for guidance."

The General Services Administration (GSA) contracted with Fedcap Rehabilitation Services Inc. to provide the janitorial and maintenance services at federal offices and facilities.

The McNamara-O'Hara Service Contract Act requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates, including prospective increases, contained in a predecessor contractor's collective bargaining agreement.

For more information about the SCA and other laws  enforced by the Wage and Hour Division, contact the Division's toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at including a search tool to use if you think you may be owed back wages collected by WHD.

Office of the Solicitor
October 31, 2018
Release Number
Media Contact: Ted Fitzgerald
Media Contact: James C. Lally
Phone Number