$241,000 in Back Wages for 22 Construction Workers for Misclassification and Denial of Proper Compensation

Tuesday, May 24, 2011

The U.S. Department of Labor has recovered $240,987 in back wages for 33 electricians employed by now-defunct Deco Electrical Contractors Inc., following an investigation that found the employees had been misclassified as lesser-paid laborers and denied proper compensation for all hours worked, in violation of the prevailing wage requirements of the Davis-Bacon and Related Acts.

At the time of the investigation, Deco Electrical Contractors was performing as a contractor on the city of Hialeah’s Elderly Affordable Housing Project, a public-works construction project partially funded through the U.S. Department of Housing and Urban Development and subject to provisions of the DBRA.

“When contractors bid on a federally funded project, they agree to pay the prevailing wages as listed in the contract’s Davis-Bacon wage determination,” said Will Garnitz, director of the Miami District Office of the Labor Department’s Wage and Hour Division. “This case demonstrates that the Labor Department will use every tool available to ensure those working on federally funded projects receive their proper wages.”

An investigation conducted by the Wage and Hour Division’s Miami office found that the contractor had improperly classified electricians as laborers, and then paid them less than the prevailing wage rates and fringe benefits guaranteed under the terms of the contract. As a result, the contractor was found to owe $240,987 in unpaid wages and fringe benefits. Because Deco Electrical Contractors is no longer in business, the back wages have been paid by the company’s surety bond insurer.

Under the DBRA, contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair - including painting and decorating - of public buildings or public works must pay their workers no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area.

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