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Archived News Release — Caution: Information may be out of date.

Press Releases

Date:  February 9, 2015

Contact:  Leo F. Kay or Jose A Carnevali

Phone:  415-625-2630 415-625-2631

U.S. Department of Labor
Wage and Hour Division
Release Number: 14-2268-SAN

US Department of Labor recovers $106K in fringe benefits for workers on federally financed construction projects

Avcon Constructors Inc. fails to fund benefit plans for 19 employees

SAN FRANCISCO -- An investigation by the U.S. Department of Labor’s Wage and Hour Division discovered that Napa-based Avcon Constructors Inc. did not make timely benefit plan payments on behalf of 19 employees working at the San Francisco Veterans Affairs Hospital and the Training Exercise Warehouse at Fort Hunter Liggett. Employees on these projects were working on federally financed contracts subject to Davis-Bacon and Related Acts regulations. The DBRA requires that contributions to funds for bona fide fringe benefits must be made at least quarterly.

“Taxpayers have the right to expect that federal contractors understand their obligations and comply with the law,” said Susana Blanco, director for the department’s Wage and Hour division in San Francisco. “The department works to ensure workers are paid proper wages and benefits in a timely manner. The agency will take action to recover payment when workers are denied their rightful compensation. We do so to create a level playing field for employers, ensuring those who shortchange workers do not gain a competitive advantage.”

The DBRA 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. On a Davis-Bacon Act project, the prime contractor is responsible for the compliance of subcontractors and lower-tier subcontractors.

The DBA “prevailing wage” is a combination of the basic hourly rate and any fringe benefits listed in a DBA wage determination. The contractor’s obligation can be met by paying at least the prevailing wage listed in the contract wage determination and each laborer and mechanic the applicable prevailing wage entirely as cash wages or by a combination of cash wages and employer-provided bona fide fringe benefits. Prevailing wages, including fringe benefits, must be paid on all hours worked on the work site.

For more information about the DBA and other federal laws, contact the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at


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