U.S. Department of Labor Recovers Nearly $2.4 Million for 959 Employees After Investigation Finds Federal Contractors Violated Federal Labor Laws

LOS ANGELES, CA – After an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD), two California-based contractors for the U.S. Customs and Border Protection (CBP) will pay nearly $2.4 million to 959 employees for violations of the McNamara-O’Hara Service Contract Act (SCA) and the Contract Work Hours and Safety Standards Act (CWHSSA).

WHD investigators determined that Price Transfer Inc. and FCL Logistics LLC of Rancho Dominguez failed to follow SCA requirements and include SCA contract clauses and the wage determinations in contracts with their subcontractors providing services on federal contracts with the CBP to operate centralized examination stations. As a result, the two prime contractors and their subcontractors failed to pay employees required prevailing wages, and failed to pay health and welfare benefits required by the SCA, totaling $2,350,397. The contractors and subcontractors also failed to pay required overtime for work performed on the contracts, triggering violations of the CWHSSA. Centralized examination stations are privately operated facilities where cargo arrives for Customs inspection.

“No contractor should gain an economic advantage by paying employees below the wages and fringe benefits required when doing business with the federal government,” said Wage and Hour Division Administrator Cheryl Stanton. “Contractors are required to provide this information to their subcontractors so that all parties know their legal responsibilities, and so that workers are paid what they have legally earned while working on these contracts. We urge all employers to call the U.S. Department of Labor for assistance, and to use the tools we provide to help them comply with the law.”

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. The CWHSSA requires contractors and subcontractors to pay laborers and mechanics, including watchmen and guards, employed in the performance of covered contracts one and one-half times their basic rate of pay for all hours worked over 40 in a workweek.

The Department offers numerous resources to ensure employers have the tools they need to understand their responsibilities and to comply with federal law, such as online videos, confidential calls or in-person visits to local WHD offices.

For more information about the SCA, and other laws enforced by the Wage and Hour Division, contact the Division’s 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.

WHD's mission is to promote and achieve compliance with labor standards to protect and enhance the welfare of the nation's workforce. WHD enforces federal minimum wage, overtime pay, recordkeeping, and child labor requirements of the Fair Labor Standards Act. WHD also enforces the Migrant and Seasonal Agricultural Worker Protection Act, the Employee Polygraph Protection Act, the Family and Medical Leave Act, wage garnishment provisions of the Consumer Credit Protection Act, and a number of employment standards and worker protections as provided in several immigration related statutes. Additionally, WHD administers and enforces the prevailing wage requirements of the Davis Bacon Act and the Service Contract Act and other statutes applicable to federal contracts for construction and for the provision of goods and services.

The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.

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