U.S. Labor Department Secures More Than $3 Million in Back Wages And Benefits for Employees of Bankrupt Federal Contractor

BALTIMORE, MD – A Virginia company that provided human resources and other services to federal agencies nationwide paid more than $3 million in back wages and fringe benefits to resolve the findings of a U.S. Department of Labor Wage and Hour Division investigation.

FPMI Solutions Inc. (FPMI) of Alexandria, Virginia, violated the prevailing wage and fringe benefits provisions of the McNamara-O’Hara Service Contract Act (SCA) and failed to pay $3,159,214 in prevailing wage and health and welfare benefits to 167 employees working in the Washington, D.C. area, the investigation determined.

The company failed to pay employees and independent contractors during several payroll periods from early June 2016 to October 2016, according to the Wage and Hour Division. When the Department learned that the company filed for Chapter 11 bankruptcy protections, its Office of the Solicitor actively participated in the case, which was handled in the U.S. Bankruptcy Court for the Eastern District of Virginia. Department attorneys negotiated with the debtor and purchaser on cash collateral and sale terms, advocating for the payment of salaries and benefits owed as well as retention in employment, where possible, with the purchaser. On Sept. 30, 2016, the company was sold.

“During court proceedings and the acquisition process, the Wage and Hour Division and the Office of the Solicitor intervened to ensure that federal contract funds were withheld to cover the payrolls that FPMI failed to make,” said Baltimore District Office Director Mark Lara. “Our goal was to protect the interests of workers and to level the playing field for companies who play by the rules.”

During the time period covered by the investigation, FPMI Solutions had contracts with 11 federal agencies including the U.S. Departments of Labor, Justice, and Health and Human Services, as well as the Environmental Protection Agency and Federal Communications Commission.

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.

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/