U.S. Department of Labor Investigation Results in Federal Contractor Paying $178,784 in Back Wages to Employees at Georgia Work Site

Staff Report From Georgia CEO

Friday, September 27th, 2019

An investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD) has led Red Cedar Enterprises Inc. to pay $178,784 in back wages and fringe benefits to eight employees after the employer violated provisions of the McNamara-O’Hara Service Contract Act (SCA), at a Robins Air Force Base work site in Warner Robins, Georgia.
WHD investigators determined the Miami, Oklahoma-based technical support services company incorrectly classified employees performing technical writer duties as production control clerks and other lower-paid job titles. These erroneous classifications resulted in the employer paying these employees at rates lower than those required by law for the work actually performed. WHD also found that Red Cedar Enterprises failed to pay the required fringe benefit rates to some employees after a contract amendment.
“Contractors that bid on government contracts must be aware of and adhere to all applicable laws when paying their employees,” said Wage and Hour Division District Director Eric Williams, in Atlanta, Georgia. “We provide a number of tools to help employers understand and comply with the labor requirements on government contracts. Our education and enforcement work in this area levels the playing field for all contractors who perform work for the government.”
The SCA 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.