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Secretary of Labor Thomas E. Perez

News Release

WHD News Release: [08/05/2014]
Contact Name: Scott Allen or Rhonda Burke
Phone Number: (312) 353-6976
Email:
Allen.Scott@dol.gov or Burke.Rhonda@dol.gov
Release Number: 14-1133-CHI

US Labor Department investigations result in more than $415,000 in back wages for workers on Detroit Palmer Park Square HUD project

Malino Construction barred from bidding on federal contracts for up to 3 years

DETROIT — U.S. Department of Labor investigations have resulted in over $415,000 in back wages for more than 90 employees performing construction work on the federally funded Palmer Park Square affordable housing in Detroit. The investigations, conducted by the departmentís Wage and Hour Division, were part of a multiyear strategic enforcement initiative aimed at combating widespread labor violations on federally funded construction projects in the Detroit area, such as affordable housing construction projects funded by the U.S. Department of Housing and Urban Development.

The investigations found that Malino Construction and several project subcontractors violated provisions of the Davis-Bacon and Related Acts, the Contract Work Hours and Safety Standards Act and the Fair Labor Standards Act. The companies failed to pay prevailing wages, fringe benefits and overtime to construction workers on the project, failed to keep accurate time and payroll records for employees, and provided falsified, certified payroll records to the government.

Due to the extent and willful nature of the violations, Detroit-based Malino Construction, the prime contractor on the project, has been debarred from bidding on federal contracts for up to three years.

"These are tough economic times for the people of Detroit, and the last thing we need is for the workers who are helping to rehabilitate this city to be denied their rightful wages and benefits. With our ongoing initiative, we are working with the Michigan State Housing Development Authority and the Detroit Housing Commission to ensure federal labor law compliance on taxpayer-funded projects," said Timolin Mitchell, director of the Wage and Hour Division's Detroit District Office. "The resolution of these investigations, and the debarment of Malino Construction from bidding on future federal taxpayer-funded projects, will help ensure that local prevailing wages and working conditions are not undercut by contractors who violate the law."

Malino Construction contracted with several other companies for general construction work on the Palmer Park Square multifamily housing units in Detroit that were constructed in 2012 and 2013. On a DBA project, the prime contractor is responsible for the compliance of subcontractors and lower-tier subcontractors. Under the strategic enforcement initiative, 19 investigations focused on the companies working on the project. All contractors found in violation have agreed to comply with applicable wage laws in the future.

Prevailing wage standards provide a safety net of fair wages to workers, their families and communities, and enable local contractors and subcontractors to compete on a level playing field. The Wage and Hour Division's Detroit office is continuing its strategic enforcement initiative this year to ensure compliance with the wage and fringe benefit requirements that apply to federal and federally assisted contracts.

The DBA 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.

The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts over $100,000. These require 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 rates of pay for all hours worked over 40 in a workweek.

For more information about the DBA, the CWHSSA and other federal laws, contact the Wage and Hour Division's Detroit District Office at 313-309-4516 or call the division's toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd.