US Labor Department sues Little Rock, Arkansas, electrical contractor for failing to pay federal contract workers properly

LITTLE ROCK, Ark. — The U.S. Department of Labor has filed a lawsuit with the Office of Administrative Law Judges against LRE Royal Electrical Contractors Inc. and its owner, George E. Smith, to recover $345,077 in back wages for 61 electrical workers. The action also seeks to prevent the company and Smith from obtaining federal contracts for three years.

The filing alleges Smith and his company, doing business as both LRE Electrical Contractors and LRE Electrical, violated the Davis-Bacon and Contract Work Hours and Safety Standards Acts when they paid electrical workers less than the applicable prevailing wage rates and corresponding overtime wages for work performed as part of four government contracts.

The Wage and Hour Division's Little Rock District Office found that LRE Electrical and Smith did not register electrical workers in approved apprenticeship programs, but classified and paid workers as apprentices. The company and Smith also failed to pay these workers wage rates included in the contracts, which are based on the work an employee actually performs.

"Government contracts specify clearly how pay and benefits must be determined. Employers are required to adhere to these rules and pay workers correctly," said Cynthia Watson, Wage and Hour administrator in the Southwest. "Contractors know these obligations when they bid on government contracts, and when the contracts are awarded."

The DBA requires all contractors and subcontractors working on federal and certain federally funded projects to pay their laborers and mechanics proper prevailing wage rates and fringe benefits, as determined by the U.S. secretary of labor. Prime contractors are also responsible for compliance by subcontractors and lower-tier subcontractors.

The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts exceeding $100,000. It requires contractors and subcontractors to pay laborers and mechanics one and one-half times their basic rates of pay for all hours worked over 40 in a workweek. The premium charged to employers for overtime hours when an employee works beyond 40 per week encourages employers to hire more workers on these contracts, thus creating jobs, rather than working fewer employees longer hours.

For more information about the DBA, CWHSSA and other federal wage laws, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243), or the division's Little Rock office at (501) 221-4600. Information is also available at http://www.dol.gov/whd.