US Department of Labor recovers $500K in back wages for 68 workers after builder’s failure to ensure subcontractors’ compliance leads to violations

SPOKANE, WA – Among its many responsibilities, a general contractor has a duty to make sure all of its subcontractors pay workers on federally funded projects all of the wages they have legally earned.

Failing to do so has proven costly for a prominent regional builder of residential communities following a recent U.S. Department of Labor Wage and Hour Division investigation. The investigation of wage practices at three Washington residential building sites in Vancouver, Puyallup and Arlington has resulted in the recovery of $500,851 in back wages and benefits for 68 workers employed by subcontractors of the Inland Group of Spokane. Going forward, the company has pledged to monitor the compliance for all of its subcontractors subject to the Davis-Bacon and Related Acts and other federal labor laws.

“Enforcement of the prevailing wage laws levels the playing field for all contractors and protects the wages of hard-working, middle-class American workers,” said Wage and Hour Division Regional Administrator Ruben Rosalez in San Francisco. “The Wage and Hour Division will remain vigilant in its enforcement to ensure employees are paid in accordance with the law. Failure to comply could result in prime contractors’ ineligibility to bid on future federal contracts.”

Investigators found Inland Group’s subcontractors on residential building projects violated the DBRA, the Copeland Act, and the Fair Labor Standards Act, including violations of child labor requirements. Funded with loan guarantee contracts insured by the U.S. Department of Housing and Urban Development, the project was subject to provisions of the National Housing Act.

Violations committed by subcontractors Prestige Drywall Company; Hired Guns Framing Inc.; Trademark Plumbing LLC and Air Design Heating and Air Conditioning included:

–   Classifying workers incorrectly, paying them for jobs with lower rates than those they actually performed.

–   Calculating required fringe benefits improperly.

–   Failing to pay employees for eight weeks of work.

–   Failing to pay workers for travel time.

–   Deducting lodging and travel expenses from workers’ pay illegally.

–   Permitting minors to work outside of the hours allowed by law.

In addition to ensuring future compliance by its subcontractors, Inland Group will seek the division’s guidance in properly applying scopes of work to ensure workers are paid accurately for the work they perform, will provide additional training on compliance requirements to staff, and will closely analyze certified payrolls submitted by its subcontractors.

The Inland Group specializes in high-density residential development and construction with a portfolio of more than 10,000 apartment homes, in over 50 communities, across the Western U.S.

For more information about the FLSA and other laws enforced by the division, contact the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division.