Honolulu subcontractor pays more than $305K in back wages, damages to 65 workers after US Labor Department investigation

HONOLULU — M.H. Electric has paid $290,588 in back wages to 65 workers after the U.S. Department of Labor determined that the Honolulu-based subcontractor violated federal wage and hour laws at 10 federally funded construction projects awarded in Hawaii between 2012 and 2014 by the Hawaii Air National Guard and the U.S. Departments of the Navy, Army and Veterans Affairs. In resolving the department's allegations, the company also paid an additional $14,507 in back wages and damages for overtime violations under the Fair Labor Standards Act.

The department's Wage and Hour Division found M.H. Electric violated the Davis-Bacon and Related Acts and Contract Work Hours and Safety Standards Act. The company failed to pay its employees for their overtime hours in a timely manner. Instead, the employer systematically "banked" those overtime hours at straight-time wage rates for future use as vacation or sick time, or to be used when employees worked less than 40 hours. That violated the overtime standards of both the CWHSSA and the FLSA, which require that an employer pay time and one-half for hours worked beyond 40 in a workweek.

"Federal contractors owe it to taxpayers to comply with all applicable laws, including paying their workers fairly and fully," said Terence Trotter, district director for the Wage and Hour Division in Honolulu. "In this case, we appreciate the cooperation shown by M.H. Electric to help resolve the matter expeditiously and to commit to future compliance with applicable labor standards."

Agency investigators also established that M.H. Electric failed to maintain an appropriate ratio of experienced electricians while employing lower paid apprentices at the federal sites, in violation of labor laws regulating federal contracts. In addition, the company illegally deducted from workers' pay the cost of special gate passes needed to enter the Joint Base Pearl Harbor-Hickam.

The Davis-Bacon Act requires that all contractors and subcontractors performing work on federal and certain federally funded construction projects pay their laborers and mechanics at least the prevailing wage rates associated with their occupation, as determined by the secretary of labor.

The CWHSSA applies to contractors and subcontractors with federal service contracts and federally funded and assisted construction contracts exceeding $100,000. It requires 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.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers are required to maintain accurate time and payroll records.

For more information about the FLSA, DBA, the CWHSSA and other federal laws, contact the Wage and Hour Division's Honolulu District Office at 808-541-1360 or call the division's toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd/.