US Department of Labor recovers $578K in wages, health and welfare benefits for 87 workers of New Jersey medical transport services contractor

EAST ORANGE, NJ – The U.S. Department of Labor and an East Orange medical transport services contractor has reached a settlement agreement after a federal investigation found violations of the McNamara-O’Hara Service Contract Act.

As part of the agreement, Virgo Medical Services Inc. paid $578,018 in back wages, and health and welfare benefits to 87 workers responsible for transporting military veterans to and from doctor appointments and unscheduled medical visits.  It also agreed to a 5-year enhanced compliance agreement intended to ensure future compliance with the Service Contract Act and prevent future violations.

Under three separate contracts with the U.S. Department of Veterans Affairs – totaling $25,678,362 – Virgo Medical Services Inc. provided veterans with medical transportation services for unscheduled and scheduled medical appointments to various VA medical centers and clinics in New Jersey and Philadelphia. On one of the contracts, Virgo used five workers employed by another medical transport services company, Lifeline Medical Service Inc.

An investigation by the department’s Wage and Hour Division determined that the employer failed to pay 87 ambulance and shuttle bus drivers, and emergency medical technicians, the applicable prevailing wages based on the specific contract and the employees’ duties and did not pay the required health and welfare benefits.

To resolve the matter, the department’s Office of the Solicitor reached a settlement with Virgo requiring the employer to agree to 5 years of enhanced compliance provisions, including:

• Train managerial staff on SCA requirements.
• Hire an SCA compliance manager.
• Provide written notice to all employees about their rights under the SCA, Fair Labor Standards Act, and Contract Work Hours and Safety Standards Act.
• Provide notice to the division if it bids on and/or is awarded future SCA contracts.

“Enforcement of prevailing wage laws protects the wages of hard-working, middle-class workers in America. Violations of the Service Contract Act and other federal wage laws are preventable if employers and employees know and understand their responsibilities and rights under the law,” said Wage and Hour Division District Director Paula Ruffin in Mountainside, New Jersey. “We encourage them to contact the Wage and Hour Division to learn more.”

“The U.S. Department of Labor is committed to ensuring employees are paid the wages they have rightfully earned and federal contractors comply with the law. When employers fail to do so, we will pursue appropriate legal means on behalf of the workers and the law,” said Regional Solicitor Jeffrey Rogoff in New York.

The Wage and Hour Division’s Northern New Jersey District Office conducted the investigation. Trial Attorney Peter Kellett of the New York Regional Office of the Solicitor negotiated the settlement for the department.

Workers can call the Wage and Hour Division confidentially with questions – regardless of their immigration status – and the department can speak with callers in more than 200 languages.

For more information about the SCA, 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.