U.S. Department of Labor Recovers $342,334 After Investigation Finds Virginia Company Violated Contract

RALEIGH, NC - Kingfisher Systems Inc. – a federal contractor that provides information technology support at two North Carolina military installations, and based in Falls Church, Virginia – has paid $342,334 in wages and fringe benefits to 45 employees after a U.S. Department of Labor Wage and Hour Division (WHD) investigation found the employer violated requirements of the Fair Labor Standards Act (FLSA) and the McNamara-O’Hara Service Contract Act (SCA).

WHD determined that Kingfisher Systems Inc. incorrectly classified employees providing information technology support work at Marine Corps Air Station Cherry Point in Havelock and Camp Lejeune in Jacksonville. As a result, the employer paid prevailing wage rates lower than those required by law and subsequently also paid incorrect fringe benefit rates to those workers. Additional violations resulted when the employer based overtime pay on these incorrect rates. WHD also found Kingfisher Systems Inc. failed to keep accurate records reflecting the required SCA wage rates, fringe benefits, correct work classifications, and the total daily compensation of each employee.

“Contractors and subcontractors awarded federal contracts must understand that incorrectly classifying employees can lead to numerous violations,” said Wage and Hour Division District Director Richard Blaylock, in Raleigh, North Carolina. “Owed back wages and fringe benefits associated with these errors can add up quickly. The U.S. Department of Labor offers employers a wide variety of tools and free prevailing wage seminars to help them understand their responsibilities.”

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 FLSA, SCA, and other laws enforced by the Wage and Hour Division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Employers who discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program. Information is also available at https://www.dol.gov/whd.