$945,000 Paid in Back Wages by Government Contractor for Failure to Pay Prevailing Wage Rates

Friday, August 28, 2015

Federal law requires government contractors to pay their workers the prevailing wage rates and fringe benefits in their geographic area.  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.

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.

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