RALEIGH, NC (STL.News) After an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD), an Athens, Georgia-based disaster relief company will pay $184,838 in wages to 18 employees after an investigation found the company violated federal wage and overtime laws while under contract to provide recovery services in several North Carolina locations in the aftermath of Hurricane Florence.
WHD investigators determined MLU Services Inc. violated the Fair Labor Standards Act (FLSA) when it paid some overtime-eligible employees flat salaries without regard to the number of hours that they worked. This practice violated FLSA overtime requirements when those employees worked more than 40 hours in a workweek but were not paid overtime.
WHD also found MLU Services paid quality control inspectors at rates below those required by the McNamara-O’Hara Service Contract Act (SCA) when they performed work on the employer’s contract with the Federal Emergency Management Administration. MLU Services paid the inspectors rates applicable to data entry personnel – rates lower than those required for the work they performed. The employer also failed to pay these employees fringe benefits required under the SCA.
“Employers must meet their obligation to pay their employees the wages they have legally earned,” said Wage and Hour Division District Director Richard Blaylock in Raleigh, North Carolina. “Contractors and subcontractors awarded federal contracts must understand that incorrectly classifying employees can lead to costly violations. The U.S. Department of Labor offers employers a wide variety of tools to help them understand their responsibilities.”
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.
The department offers numerous resources to ensure employers have the tools they need to understand their responsibilities and to comply with federal law, such as online videos, confidential calls or in-person visits to local WHD offices.