DOL recovers $1.5M in back wages from contractors on California project

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Dive Brief:

  • The U.S. Department of Labor has recovered over $1.5 million in back wages and damages for 413 workers at construction projects at a Ridgecrest, California, naval base, according to a release. 
  • Investigations of 35 contractors on federally funded projects at Naval Air Weapons Station China Lake over two years discovered employers had violated the Davis-Bacon and Related Acts; the Contract Work Hours and Safety Standards Act; the Service Contract Act and the Fair Labor Standards Act.
  • Contractors named in the release run the gamut from sectors including security, recruiting and construction. The violators with the largest wage returns were largely subcontractors on two contracts as part of an Earthquake Recovery Program led by Burlingame, California-based Environmental Chemical Corp., a design and construction company, though the general contractor itself was not cited for any violations and did not have to pay any back wages.

Dive Insight:

Wage theft and unfair labor practices are a widespread problem in the construction industry. In fiscal year 2023, the DOL recovered over $35.5 million in back wages for construction workers across 2,134 cases, the highest dollar amount for any industry. 

Of the 35 companies listed across multiple industries for violations on projects at China Lake, the top construction-related companies ordered to pay the most in back wages were:

  • Greeley, Colorado-based Hensel Phelps, which paid $184,172 in back wages to 37 workers. Hensel Phelps failed to pay prevailing wage rates, health and welfare benefits and overtime compensation, according to the release.
  • ATCO, a Spring, Texas-based prefabricated wood building manufacturer that built living units for construction workers, paid $104,935.21 in back wages to seven workers. ATCO failed to pay prevailing wage rates and overtime wage, according to the release.
  • Next Century Rebar Inc., a Henderson, Nevada-based fabrication and erection contractor, which paid $59,351.32 in back wages to eight workers. 
  • Pacific Steel Group, a San Diego-based rebar fabricator, which paid $41,003.95 in back wages to 11 workers.
  • Baker Electric & Renewables, an Escondido, California-based solar contractor, paid $39,508.07 in back wages to 31 workers.

Hensel Phelps told Construction Dive in a statement it values its workers, but it discovered discrepancies between the way it paid its union classified workers on the project and the overall Davis-Bacon Act classifications on the China Lake projects.

“We have ensured that all employees have been appropriately compensated and the Department of Labor acknowledged Hensel Phelps for their transparency and cooperation in correcting the discrepancy,” the statement read.

None of the other companies responded to Construction Dive’s requests for comment. 

In addition to the $1.5 million in back wages, the DOL secured $32,291 in liquidated damages, and three of the 35 companies — Pacific Coast Contracting Services Inc., Temecula Valley Drywall Inc. and Rutt Fence — faced a collective $14,020 in civil money penalties due to the violations.

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