US Labor Department investigation finds Capitol Hill cafeteria workers illegally denied more than $1M in wages by federal food service contractors

WASHINGTON – Hundreds of workers who prepare and serve meals for Capitol Hill lawmakers and their staffs in the U.S. Senate cafeterias will receive more than $1 million in back wages after a U.S. Department of Labor investigation found their employers failed to pay prevailing wages required of federal contractors.

The department’s Wage and Hour Division announced today that Restaurant Associates and its subcontractor, Personnel Plus, will pay 674 workers $1,008,302 in back wages. The division found the two employers violated the McNamara-O’Hara Service Contract Act when they improperly classified workers – paying them for lower-paying jobs than they actually performed – and required employees to work prior to their scheduled starting times without compensation. Paying below the required rates also caused the companies to fail to pay the workers overtime at the proper rates.

“Employers given the opportunity to earn a profit by providing a service to the government at a cost to the tax payer have a legal obligation to follow the letter of the law, especially when it comes to paying their workers,” said the department’s Wage and Hour Division Administrator David Weil. “Workers in the restaurant industry are among the lowest-paid workers in our economy. Most struggle to afford life’s basic expenses and pay their bills; they shouldn’t have to deal with paychecks that don’t accurately reflect their hard work and the wages to which they are legally entitled.” 

The agency also determined the employers failed to pay required health and welfare benefits and violated the SCA’s recordkeeping requirements.  

Investigators found that Restaurant Associates’ failure to pay workers proper overtime and failure to maintain a record of hours employees worked prior to their scheduled shifts also violated the Fair Labor Standards Act.  

“Enforcement of the prevailing wage laws levels the playing field for all contractors and protects the wages of hard-working employees,” said Mark Watson, Regional Administrator for the Wage and Hour Division in the Northeast. “These contractors’ actions put vulnerable, low-wage workers and their families in jeopardy. The division will remain vigilant in its enforcement of these laws to protect both workers and employers.”  

The division is reviewing the findings to determine whether to seek debarment of the employers from obtaining contracts with the federal government in the future.

The SCA applies to every contract valued in excess of $2,500 entered into by the U.S. Government or the District of Columbia, the principal purpose of which is to furnish services in the U.S. using service employees. Contractors and subcontractors performing on covered service contracts must observe minimum wage and safety, health and welfare benefits and maintain certain records.

The FLSA requires that covered, nonexempt workers be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus one and one-half times their regular rates of pay for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records.

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