US Department of Labor recovers $3.1M in wages, benefits for 3,100 workers employed by a federal subcontractor servicing BENEFEDS program

MANCHESTER, NH – The U.S. Department of Labor has recovered more than $3.1 million in back wages and fringe benefits for more than 3,100 workers at a California subcontractor that provided enrollment and dental and vision benefits support to federal employees, retirees and their dependents.

An investigation by the department’s Wage and Hour Division determined that Alorica Inc. in Irvine incorrectly paid workers prevailing wage rates and fringe benefit amounts less than those required by the McNamara-O’Hara Service Contract Act. The wage shortages occurred between January 2017 and March 2022. 

“The Wage and Hour Division is committed to ensuring workers are paid the full wages and benefits they are rightfully due and that federal contractors are aware of their obligations under the Service Contact Act and comply with the law,” said Principal Deputy Wage and Hour Administrator Jessica Looman. “The vigorous enforcement of prevailing wage laws promotes efficiency and productivity in government by allowing agencies to recruit and retain talented federal contract workers.”

Long Term Care Partners LLC, now operating as Fed Point, contracted with the U.S. Office of Personnel Management to provide benefits enrollment and other customer services for federal employees. The Portsmouth, New Hampshire, company – which engaged Alorica as a subcontractor – paid $3,193,839 in back wages and fringe benefits to 3,174 employees to resolve the violations. Alorica agreed to audit its pay practices and computed the resulting prevailing wage and fringe benefit deficiencies owed its workers. 

Throughout the course of the investigation, LTCP cooperated and ultimately paid all back wages and benefits owed to its subcontractor’s employees.

“Violations under the Service Contract Act can be costly, as this case illustrates, but they are preventable with knowledge and due diligence,” explained Wage and Hour Division Regional Administrator Mark Watson in Philadelphia. “We strongly encourage federal contracting agencies and their service contractors to consult our extensive online resource materials and contact the division to answer any questions they may have about the Service Contract Act’s requirements.”

Current and former Alorica employees who worked on this contract and believe they may have been impacted can contact the Wage and Hour Division and are encouraged to use the Workers Owed Wages search tool to learn if they are owed back wages recovered by the division. Employees with any questions about this case may send them to: whdvm.manchnhalorica@dol.gov

A wholly owned subsidiary of John Hancock Life & Health Insurance Company, Long Term Care Partners was rebranded as FedPoint in 2020. The company administers the federal Long Term Care Insurance Program and BENEFEDS under contract with OPM.

Based in Irvine, California, Alorica has about 100,000 employees in 16 countries who serve business needs of global brands and other organizations for process improvement, customer engagement and market expansion.

For more information about workers’ rights and other employee rights enforced by the division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Employers and workers can call the division confidentially with questions regardless of where they are from and the department can speak with callers in more than 200 languages.  Help ensure hours worked and pay are accurate by downloading the department’s Android and iOS Timesheet App for free, also available in Spanish.