$175,602 in Back Wages for Wage and Hour Violations by Contractor Partially Financed by Department of Energy

Friday, April 19, 2013

The U.S. Department of Labor has recovered $175,602 in back wages for 13 employees of Didion Milling, where workers were constructing an ethanol production facility in Cambria. The project was funded in part by a $5.6 million grant from the U.S. Department of Energy. An investigation by the department’s Wage and Hour Division found that the contractor violated prevailing rate, fringe benefit and overtime provisions of the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act.

The investigation disclosed that Didion failed to pay construction employees rates required for the categories of work they performed on the project, and further failed to pay required fringe benefits. Some laborers performing work on the job site were paid $14.41 per hour, when the required rate was $22.59. When employees performed work in more than one job category in a week, they were sometimes paid the same rate for all hours worked, rather than the employer paying specific rates for specific jobs, as required. Investigators also found that the company failed to pay employees overtime compensation at time and one-half the proper prevailing wage rates for hours worked beyond 40 in a week.

Additionally, Didion Milling failed to maintain accurate records reflecting hours worked in specific job classifications, failed to maintain records of fringe benefit contributions and failed to submit a signed statement of compliance and weekly payroll reports on the project.

The Davis-Bacon Act 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 DBA-covered project, the prime contractor is responsible for the compliance of all subcontractors. Requiring prevailing wages on these contracts protects local contractors from being underbid by those from other areas who may otherwise be able to recruit and bring in less expensive labor.

The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts over $100,000. These require contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rate of pay for all hours worked over 40 in a workweek.

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