US Labor Department files suit against Northwest Title Agency to recover $230,688 in unpaid wages and benefits for 10 employees on HUD project

Lawsuit seeks to debar company from bidding on federal projects in the future

WHITE BEAR LAKE, Minn. — An investigation by the U.S. Department of Labor's Wage and Hour Division has determined that White Bear Lake-based Northwest Title Agency Inc. failed to pay $230,688 in prevailing wage rates and fringe benefits to 10 workers, in violation of the Service Contract Act. The employees worked on real estate closings for U.S. Department of Housing and Urban Development-owned projects in Minnesota.

"Contractors that do business with the federal government have an obligation to pay their employees the required contractual rates and benefits," said Theresa Walls, the Wage and Hour Division's district director in Minneapolis. "When employers fail to do so, the department will not hesitate to pursue legal action, including debarment, to ensure employees working on federally funded projects are properly paid."

The department filed a lawsuit with the Office of Administrative Law Judges against Northwest Title Agency, Chief Operating Officer Joel Holstad and Chief Executive Officer Wayne Holstad, alleging violations of the SCA's prevailing wage and fringe benefit provisions and seeking payment of the back wages and benefits. The company held the HUD contract from April 2010 through April 2011, with an additional option year through April 2012. The complaint also seeks to prohibit Northwest Title Agency from bidding on federal contracts in the future.

The complaint also alleges that Northwest Title Agency failed to notify the employees that work performed on the HUD contract was subject to SCA requirements. The investigation also found violations of the SCA's record-keeping provisions for failing to maintain an accurate record of hours worked or to segregate hours for contract work from noncontract work.

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 prevailing wage rates and fringe benefits found in the locality, or the rates, including prospective increases, contained in a predecessor contractor's collective bargaining agreement. The department issues wage determinations on a contract-by-contract basis in response to specific requests from contracting agencies. These determinations are incorporated into the contract. Additional information on labor provisions and enforcement of government contracts is available at http://www.dol.gov/whd/govcontracts/.

For more information about federal wage laws, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd.