US Labor Department recovers $305K for 80 workers after employer failed to pay correct wage rates on federal contract at Kingsport Army site

Employer:                                          BAE Systems Inc., operating as Ordnance Systems Inc.

                                                                2941 Fairview Park Drive

                                                                Falls Church, VA 22042

Investigation site:                         4509 W Stone Drive

                                                                Kingsport, TN 37660

Investigation findings: The department’s Wage and Hour Division found the employer failed to pay the proper half-time rates to non-exempt employees who worked more than 40 hours in a workweek. The division also found that the employer failed to pay the applicable prevailing wage rate when employees performed different classifications of work. In addition, BAE Systems failed to pay the correct health and welfare rate for all hours worked. These practices violated both the Contract Work Hours and Safety Standards Act, as well as the McNamara-O'Hara Service Contract Act.

Back wages recovered for workers:            $305,840 for 80 employees.                                            

Quote: “Contractors must understand and follow all of the requirements associated with performing work on federal contracts,” said Wage and Hour Division District Director Lisa Kelly in Nashville, Tennessee. “Our enforcement of prevailing wage laws levels the playing field for all contractors and protects the wages of workers. We encourage all employers to contact us for guidance to avoid violations like those found in this case.”

Background: BAE Systems Inc. is a London-based provider of technology-led defense, aerospace and security solutions. The U.S. Army Contracting Command appointed Ordnance Systems Inc. as the operating contractor for the Holston Army Ammunition Plant in Kingsport, Tennessee.  

Employers can contact the Wage and Hour Division at its toll-free number, 1-866-4-US-WAGE. Learn more about the Wage and Hour Division, including numerous online resources for employers, such as a website for frequently asked questions about the McNamara-O'Hara Service Contract Act and the Contract Work Hours and Safety Standards Act. 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. Workers and employers alike can help ensure hours worked and pay are accurate by downloading the department’s Android Timesheet App for free.