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Investigation finds federal contractors owe $101,711 to employees working on Michigan HUD Project

Employer paid workers flat rates per day, regardless of hours worked

U.S. money
U.S. money (WDIV)

DETROIT – After an investigation by the US Department of Labor’s Wage and Hour Division, two Michigan-based contractors – Resurrection Carpentry LLC and The Drywall King LLC – working on a federally funded project in Detroit will pay 36 current and former employees a total of $101,711, for failing to pay the required prevailing wages and fringe benefits to construction employees.

The contractors’ practice of paying less than the required prevailing rates violated the Davis Bacon and Related Acts (DBRA) and Contract Work Hours and Safety Standards Act.

WHD investigators determined sub-contractor Resurrection Carpentry LLC of Livonia improperly classified three employees performing carpentry work as laborers, and paid them as such.

The prevailing wage rate for laborers is less than the required rate for carpenters, so paying the lower rate violated the law.

The employer also violated the CWHSSA by failing to pay overtime at the correct rate when two carpenters worked more than 40 hours in a workweek on the site. The company paid three employees back wages of $21,618.

Investigators also found a drywall subcontractor on the project, The Drywall King LLC of Waterford violated the DBRA by failing to pay the required prevailing wage rates and benefits to drywall workers.

Instead, the employer paid workers flat rates per day, regardless of the number of hours that they worked. When those flat rates failed to cover the hours employees worked at the required rates, violations occurred. Drywall King also failed to submit certified payrolls, as is required on projects covered by DBRA. The company has paid 33 workers a total of $80,093 in back wages.

“Contractors working on federally funded jobs receive detailed agreements that include prevailing wage and fringe benefits rates they are required to pay their workers. They must ensure that they adhere to these rules, and that all of their subcontractors do the same,” said Wage and Hour Division District Director Timolin Mitchell of Detroit. “Employers can avoid these costly violations. We encourage all employers to reach out to us for confidential assistance to understand their responsibilities under the law.”

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