US Department of Labor recovers $77K in wages, benefits for 10 workers working on a federal contract at Cherry Point, Camp Lejeune

Raleigh, nc – A federal investigation has found that a Virginia-based information technology support company under contract with the U.S. Marine Corps incorrectly classified 10 workers as exempt from overtime, leading to the recovery of $77,627 in back wages and benefits owed to them.

The affected workers were hired for computer systems and tech support of personnel at Marine Corps Air Station Cherry Point, Camp Lejeune and other U.S. military installations.

Investigators with the U.S. Department of Labor’s Wage and Hour Division determined Leidos Inc. applied the administrative exemption under the overtime provisions of the Fair Labor Standards Act incorrectly. By doing so, the employer failed to pay workers their correct health and welfare and holiday benefits as required by the McNamara-O’Hara Service Contract Act. This resulted in the recovery of $55,593 for the affected workers.

The division also found that, while wrongly exempted from overtime, Leidos paid the 10 workers straight-time rates for all hours worked, which denied them an overtime rate for hours over 40 in a workweek in violation of the FLSA. Investigators determined the employees were due $22,034 in unpaid overtime wages.

“Federal contractors must understand and meet all the requirements associated with performing work on government contracts,” explained Wage and Hour Division District Director Richard Blaylock in Raleigh, North Carolina. “Our investigation shows the Department of Labor’s commitment to making sure employees are paid their rightfully earned wages.”

By law, contractors and subcontractors performing services on prime contracts valued at more than $2,500 must 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.

“We encourage other federal contractors to use this investigation’s outcome as an opportunity to review their pay practices and make certain they are complying with the law and avoiding the potentially costly consequences for violations like those found in this case,” Blaylock said.

Founded in 1969, Leidos Holdings Inc. is a Fortune 500 information technology, engineering and science solutions company, serving clients in the aviation, defense, energy, health, intelligence, government and science industries. Headquartered in Reston, Leidos has 39,000 employees working in 42 states and abroad.

For more information about federal contractor wage laws and other laws enforced by the Wage and Hour Division, contact the division’s toll-free helpline confidentially at 866-4-US-WAGE (487-9243). The department can speak with callers in more than 200 languages.

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. Download the agency’s new Timesheet App for Android and Apple devices, now available in English and Spanish, to ensure hours and pay are accurate.