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A Glen Allen-based federal government subcontractor has paid more than $1.5 million in back wages to 209 employees for violating provisions of the Fair Labor Standards Act and the McNamara-O'Hara Service Contract Act, officials from the U.S. Department of Labor's Wage and Hour Division announced.
An investigation by the division found that Apex Systems LLC – a staffing agency and government subcontractor headquartered in Innsbrook – failed to pay employees at Camp Lejeune, North Carolina the prevailing wage rates required for the work they performed, in violation of the SCA.
The agency was operating as a subcontractor to Perspecta Inc. on information technology contracts at military bases in 17 states. Apex incorrectly categorized and paid the employees as computer operators when they actually performed the work of personal computer support technicians, which requires the payment of higher rates.
Apex also failed to pay employees the fringe benefits required by the SCA. These incorrect wage rates resulted in an overtime violation under the FLSA when the subcontractor based their time-and-one-half calculations on the incorrect prevailing rates. The employer also failed to maintain records of the required SCA wage rates, vacation, and holiday pay, a record-keeping violation.
In total, Apex had to pay $1.52 million in back wages to the employees.
After the initial investigation, the department directed Apex Systems LLC to conduct a verifiable review of their records, company-wide, to ensure enterprise-wide compliance with regard to wage payments to personal computer support technicians. Apex Systems LLC cooperated fully in this effort, federal officials said, and the department worked closely with company executives and their counsel to complete the review.
"When employers receive federal funds as contractors or subcontractors to provide services for the government, they must comply with all applicable laws, including ensuring employees receive required wages and fringe benefits," said Wage and Hour Division District Director Richard Blaylock, in Raleigh, North Carolina. "After these violations were brought to the attention of Apex Systems, they cooperated to address the job misclassifications throughout 17 states in order to rectify the violation.
The SCA requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to 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.
For details about the FLSA, SCA, and other laws enforced by the Wage and Hour Division, call the division's hotline at 866-4US-WAGE (487-9243). Employers who discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program. Information also is available at https://www.dol.gov/whd.
