U.S. Department of Labor Investigation Recovers $3.5 Million in Back Wages and Benefits to Employees at a Long Beach, California, Company

LONG BEACH, CA – California Cartage Company LLC – based in Long Beach, California – will pay $3,573,074 to 1,416 employees after the U.S. Department of Labor Wage and Hour Division (WHD) found the company violated federal contract provisions of the McNamara-O’Hara Service Contract Act (SCA).

WHD investigators determined California Cartage Company LLC violated the SCA by failing to pay prevailing wages, and required health and welfare benefits, to employees for work performed at a Centralized Examination Station operated for the U.S. Customs and Border Protection (CBP) at the Port of Los Angeles/Long Beach.

Investigators found the company also failed to apply the SCA clauses and wage determination to contracts for five subcontractors, which resulted in the subcontractors’ failure to pay required prevailing wages and fringe benefits to their employees as well. The contract required certain hourly rates, depending upon the positions workers held, and also required the payment of fringe benefits, holiday, and vacation time.

California Cartage Company LLC received federal funds to provide port drayage services of cargo selected for inspection by the CBP at a centralized examination facility.

“No contractor receiving federal funds to provide services to the government should gain an economic advantage by paying workers below the wages and fringe benefits required by applicable law,” said Wage and Hour Division District Director Kimchi Bui, in Los Angeles. “Workers must be paid what they are legally owed for their work. 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 predecessor contractor’s collective bargaining agreement.

For more information about the SCA and other laws enforced by the Wage and Hour Division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by WHD.