U.S. Department of Labor Investigation Results in Federal Contractor To Pay $95,000 in Back Wages to 12 Employees for Service Contract Act Violation

ELIZABETH CITY, NC – After a U.S. Department of Labor Wage and Hour Division (WHD) investigation,  Huntsville, Alabama, aviation maintenance company Y-Tech Services Inc. will pay $95,000 in back wages to 12 employees for failure to pay prevailing wage rates required for work performed under a federal contract for the U.S. Coast Guard in Elizabeth City.

WHD investigators determined that Y-Tech Services Inc. violated provisions of the McNamara-O’Hara Service Contract Act (SCA) by erroneously categorizing and paying the employees as aircraft workers when they actually performed the work of sheet metal employees, which requires the payment of higher rates. Y-Tech Services Inc. remained cooperative throughout the investigation, and worked with WHD to rectify the problems immediately.

“When employers receive federal funds to provide services to the government, they must comply with all applicable laws to ensure that their employees receive legally required pay and benefits,” said Wage and Hour Division District Director Richard Blaylock, in Raleigh. “Violations can be avoided, and we encourage employers to reach out to us for guidance.”

The SCA requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates, including prospective increases, contained in a contractor’s collective bargaining agreement.

For more information about the SCA and other laws enforced by WHD, contact WHD’s toll-free helpline at 866-4US-WAGE (487-9243) or visit the Division’s web site. WHD also offers a search tool that allows users to determine if they the Division has collected back wages owed to them.