Wage and Hour Division (WHD)
Archived News Release — Caution: Information may be out of date.
Date: March 4, 2013
Contact: Michael D'Aquino
U.S. Department of Labor
Wage and Hour Division
Release Number: 13-247-ATL (42)
US Labor Department recovers more than $226,000 in back wages, liquidated damages for 67 employees of Southeastern Painting Contractors Inc.
Painters denied overtime, prevailing wages and fringe benefits
CARROLLTON, Ga. -- The U.S. Department of Labor has recovered $226,111 in back wages and liquidated damages for 67 employees who performed work on a federally-funded project involving the construction of new schools for Marion, Bartow and Whitfield County school districts in Georgia.
The investigation, conducted by the department’s Wage and Hour Division, found Southeastern Painting Contractors Inc. of Carrollton violated the Fair Labor Standards Act’s minimum wage, overtime and record-keeping provisions, as well as the prevailing wage and fringe benefits requirements of the Davis-Bacon and Related Acts. Southeastern Painting Contractors worked as a subcontractor under both RK Redding Construction Inc., of Bremen, and Ra-Lin & Associates, of Carrollton.
“Taxpayers have a right to expect that federal contractors, who are paid with tax dollars, will comply with the law, and the department will not allow companies to abuse that trust,” said Caryl Stribling, acting district director of the Wage and Hour Division’s office in Atlanta. “This investigation underscores the department’s commitment to ensure that basic hourly rates and fringe benefits are paid to employees working on government contracts. It also protects the competitive bid process to prevent contractors from underbidding their competitors by paying less than the required wages. Everyone plays by the same rules.”
The investigation disclosed that the employer misclassified employees as independent contractors and failed to pay them overtime compensation at time and one-half their regular rates of pay for hours worked beyond 40 in a workweek, as required by the FLSA. The employer paid straight time for all hours worked. Despite the employer’s designation, none of the affected employees were found to be true independent contractors with businesses of their own. Additionally, the employer violated the FLSA’s record-keeping provision by failing to maintain records of all the hours employees worked.
Employees were also classified incorrectly for the work they performed and were paid rates below those required by the contract, in violation of the DBRA. The employer paid employees performing work as painters the lower hourly rate required for laborers, and paid some employees reduced rates as apprentices. The investigation disclosed that no recognized or approved apprenticeship program was in place. The firm also failed to pay employees hourly fringe benefits required by the contracts.
Under the FLSA, employers must distinguish employees from bona fide independent contractors. An employee, as distinguished from a person who is engaged in a business of his 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 serves. For more information, visit http://www.dol.gov/whd/regs/compliance/whdfs13.htm.
The employer has agreed to full future compliance with the FLSA and DBRA. Back wages and liquidated damages have been paid in full.
The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. The FLSA provides that employers who violate the law are, as a general rule, liable to employees for their back wages and an equal amount in liquidated damages, which are paid directly to the affected employees. Liquidated damages equal to the amount of back wages found due under the FLSA were assessed in this case.
The DBRA requires all contractors and subcontractors performing work on federal and certain federally-funded projects to pay their laborers and mechanics proper prevailing wage rates and fringe benefits as determined by the secretary of labor.
The Wage and Hour Division’s Atlanta District Office can be reached at 404-893-4600. Information about FLSA, DBRA and other federal labor laws is available by calling the division’s toll free helpline at 866-4US-WAGE (487-9243) or visiting http://www.dol.gov/whd.
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