County of Essex, private detention facility contractor to pay $4.8 million in back wages, fringe benefits to resolve labor violations

NEWARK, N.J. – One hundred and twenty-two employees at a Newark immigration detention facility will receive $4.8 million in back wages and fringe benefits from the County of Essex and one of the nation’s largest providers of re-entry and in-prison treatment services, following an investigation by the U.S. Department of Labor’s Wage and Hour Division.

After the division found the county and Community Education Center Inc. failed to pay prevailing wage and overtime rates in violation of federal labor laws, the department filed suit against both parties. Today, the department announced its Office of Administrative Law Judges approved consent findings and issued its order.

The division’s investigation revealed that – on or around Aug. 10, 2011 – prime contractor Essex County won a $129,785,750 contract from the U.S. Department of Homeland Security’s Immigration and Customs Enforcement to provide detention services for immigrant detainees at Delaney Hall Center in Newark. The county then subcontracted to Education and Health Centers of America Inc. to perform work at Delaney Hall. EHCA then awarded a subcontract to CEC to provide the services of detention and care of individuals in ICE’s custody at the facility.

From Dec. 20, 2013, to May 31, 2016, the county and CEC violated the McNamara-O’Hara Service Contract Act of 1965 by categorizing 122 detention officers improperly as operations counselors and failing to pay them the proper prevailing wage rate of $30.97 per hour required by law for that position, the investigation found. Instead, they paid $11.29 per hour based on a prior collective bargaining agreement that was invalidated by the National Labor Relations Board in December 2013.

Both employers also failed to pay fringe benefits of $4.02 per hour, the required rate for detention officers, in violation of the SCA. The total amount of back wages and benefits due for the SCA violations is $4,061,507.

The investigation further determined that the county and CEC violated the Contract Work Hours and Safety Standards Act when they did not pay 116 detention officers proper overtime wages. The employers owe a total of $738,492.13 in back wages for this violation.

“Enforcement of the prevailing wage laws levels the playing field for all contractors and protects the wages of hard-working, middle-class American workers,” said Dr. David Weil, administrator of the Wage and Hour Division. “The Wage and Hour Division will remain vigilant in its enforcement to ensure employees are paid in accordance with prevailing wage laws.”

CEC provides comprehensive management of county, state, and federal jail and detention facilities. Founded in 1996 as a detox and treatment center in Hoboken, CEC has since grown to be a national leader in the field of correctional treatment currently operating in 16 states and the Commonwealth of Bermuda.

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.

The SCA applies to every contract valued in excess of $2,500 entered into by the U.S. federal 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.

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/.