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News Release

US Air Force drone and surveillance system contractor pays nearly $1M in back wages to 900 employees across the country

US Department of Labor finds General Atomics violated federal wage requirement

SAN DIEGO — Federal law requires government contractors to pay their workers the prevailing wage rates and fringe benefits in their geographic area. On the books for half a century, the law ensures that companies do not make their services less costly at the expense of their workers, or drive down wages for other area workers.

General Atomics Aeronautical Systems, Inc., a San Diego-based manufacturer of unmanned aircraft and surveillance systems under contract with the U.S. Air Force, has learned the U.S. Department of Labor's Wage and Hour Division is watching and will take action when laws are being broken.

A departmental investigation found General Atomics violated the federal wage requirements in paying 901 employees at job sites throughout the U.S., including the China Lake Naval Weapons Center in Ridgecrest, Calif. As a result, the company has paid $945,000 in back wages to these workers.

"Failing to pay the correct prevailing wages hurts workers, and it also negatively affects other contractors who pay proper wages," said David Weil, administrator of the Wage and Hour Division. "We appreciate that General Atomics was cooperative throughout the investigation and immediately came into compliance. They also ensured that all employees working on their contracts were paid back wages once the issues were brought to their attention."

Investigators determined General Atomics paid employees assigned to work outside of their home areas the prevailing wage rates for the area where they were based, not the area in which they worked. In a number of cases, the required wages at the remote job sites were higher than the wages the workers were actually paid. General Atomics' time-tracking system tracked hours and job numbers on which employees worked on, but the system did track not work site locations. The employer then failed to adjust the prevailing wages paid to employees when they worked away from their home base.

General Atomics agreed to pay its employees the highest prevailing wage among all of its job sites going back for a six-year period. They have since upgraded their time-keeping system to ensure that employees are paid the correct wages depending on the location of the job site.

The company produces unmanned aircraft systems and tactical reconnaissance radars as well as advanced high resolution surveillance systems. As suppliers that furnish military testing services and logistical support under contract with the Air Force, General Atomics is subject to the requirements of the McNamara-O-Hara Service Contract Act.

The SCA requires that contractors and subcontractors performing services on covered federal contracts in excess of $2,500 must pay their service workers no less than the wages and fringe benefits prevailing in the locality, or rates contained in a predecessor contractor's collective bargaining agreement.

For more information about federal wage laws administered by the Wage and Hour Division, call the agency's toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd.

WHD News Release: [08/27/2015]
Contact Name: Leo Kay or Jose A. Carnevali
Phone Number: (415) 625-2630 or x2631
Email:
Kay.Leo.F@dol.gov or Carnevali.Jose@dol.gov
Release Number: 15-1448-SAN