Georgia Contractor Pays $195,000 in Back Wages, Benefits After U.S. Department of Labor Finds Violations on Federal Contract

KENNESAW, GA – After an agreement between the U.S. Department of Labor and Schadsons Corp., the Office of Administrative Law Judges in Washington, D.C., entered a consent order, affirming that the mechanical contractor violated labor provisions of the Davis Bacon and Related Acts (DBRA) and the Contract Work Hours and Safety Standards Act (CWHSSA).

As a result of the order, the Kennesaw, Georgia-based employer has paid $195,000 in back wages and fringe benefits to 21 employees, and agreed to be debarred from obtaining new federal contracts for one-and-a-half years.

The actions follow an investigation by the Department's Wage and Hour Division (WHD) that found Schadsons incorrectly classified employees as general laborers, when they actually performed more skilled work such as plumbing or pipe-fitting. In doing so, the employer paid incorrect prevailing wage rates applicable to the less-skilled job categories, and subsequently also paid incorrect overtime rates when the employees worked over 40 hours in a workweek. Schadsons also failed to pay the correct fringe benefit rates due to the affected employees as required under the DBRA.

"The U.S. Department of Labor is committed to ensuring that employees are properly classified and receive the wages they have rightfully earned for all the hours they have worked," said Wage and Hour Division District Director Eric Williams, in Atlanta. "We are also determined to ensure that employers who fail to comply with the law do not gain an unfair competitive advantage over those who do. We will utilize all options available to us, including litigation, to hold those who commit violations accountable."

Caddell Construction Company Inc. subcontracted Schadsons Corp. to perform heating, ventilation, and air conditioning work on two separate projects funded by the U.S. Army Corps of Engineers at Fort Benning, Georgia; the McBride Elementary School; and two initial entry combat training battalion barracks. The DBRA requires contractors and subcontractors performing work on federal and certain federally funded projects to pay workers prevailing wage rates and fringe benefits as determined by the U.S. Secretary of Labor and as included in their contracts.

For more information about the FLSA, DBRA, CWHSSA, and other laws enforced by the Division, contact the Division's toll-free helpline at 866-4US-WAGE (487-9243) or visit the Division's web site. Employers who discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program. The Division also offers a search tool which allows users to determine if you are owed back wages collected by the Division.