PERMIS CONSTRUCTION CORP., 1985-DBA-102 (ALJ Oct. 22, 1987)

USDOL/OALJ Reporter

[1] [87-55&56.WAB ATTACHMENT 1 OF 2] U.S. Department of Labor Office of Administrative Law Judges 2600 Mt. Ephraim Avenue Camden, New Jersey 08104 DATE: OCTOBER 22, 1987 CASE NO. 85-DBA-102 IN THE MATTER OF Disputes concerning the payment of prevailing wage rates and overtime pay by: PERMIS CONSTRUCTION CORP. Prime Contractor and TRATAROS CONSTRUCTION CORP. Prime Contractor With respect to laborers and mechanics employed by their subcontractor Future Construction Corporation under U.S. Dept. of the Army Contract Nos. DACA-51-82-C-0246, and DABT-35-83-C-0143 (Fort Dix, New Jersey). DEFAULT DECISION AND ORDER AS TO TRATAROS CONSTRUCTION CORP. This matter having been scheduled for hearing on September 28, 1987 by Notice of Hearing dated July 31, 1987, and Respondent, Trataros Construction Corp. (hereinafter "Respondent"), not having appeared at such time and place noticed for hearing, and Respondent not having, prior to such time of hearing, shown good cause as to why such appearance was not made, and Upon motion therefor made at such hearing by the representative of the Office of Solicitor, U.S. Department of Labor, the following findings, conclusions and order thereon are hereby entered, pursuant to 29 C.F.R. 18.39(b) and 18.5(b): [1][2] FINDINGS OF FACT 1. On January 28, 1983, Respondent, as Prime Contractor, entered into Contract #DABT 35-83-C-0143 with the U.S. Department of the Army for the installation of windows in army barracks at Fort Dix, New Jersey. 2. In connection with such contract, Respondent, as Prime Contractor, entered into a subcontract with Future Construction Corp. of Levittown, Pennsylvania (hereinafter "Future"). 3. Pursuant to the Davis-Bacon Act, 40 U.S.C. Section 276 et seq., the Contract Work Hours and Safety Standards Act, 40 U.S.C. Section 327 et seq., and the applicable regulations issued thereunder at 29 C.F.R. Part 5, included in the specifications of such contract was the requirement that Future pay the various classes of laborers and mechanics employed on these projects the full amounts earned, computed at wage rates of not less than those determined by the Secretary of Labor and included in the contracts for the various classes of laborers and mechanics, and pay its laborers and mechanics overtime compensation of not less than one and one-half times their basic rate of pay for all hours worked on the projects in excess of eight per day and forty per week. oreover, Future was required by sections 5.5(a)(3)(ii) of Regulations, Part 5, to submit weekly a certified copy of all payrolls to the contracting agency, via the prime contractors, the certification to affirm that the payrolls were correct and complete, that the wage rates contained there[i]n were not less than those determined by the Secretary of Labor, and that the classification set forth for each laborer and mechanic conformed to the work performed. These requirements were included in the specifications of the contracts, and George C. Doran, as President of Future, acknowledged their inclusion in the subcontracts. 4. Future did not properly classify most of its employees and, accordingly, did not pay those employees the applicable prevailing wage rates for the classifications of work they performed on the project sites. Wage Decision No. NJ81-3063, including Modification Nos. 1 through 9 required Future to pay its carpenters and laborers hourly rates (including fringe benefits) of $18.54 and $13.10, respectively. Some of Future's employees who performed carpenters' work for 65% of their hours worked on the projects were, nevertheless, classified as laborers for all of their hours worked and paid the laborers' rate of $13.10 per hour or they were paid a lower hourly rate of $12.45 with no additional fringe benefits. Some employees who performed the carpenters' work were not listed on Future's certified payroll records. Instead, these employees were shown on Future's regular payrolls as "trainees," and they were paid $7.00 per hour with no fringe benefits. Other employees of Future who performed laborers' work were also omitted from the certified payrolls and, instead, were listed on Future's regular payroll records as "clean up" employees. Future paid these employees hourly rates of $4.00 and $5.49, with no fringe benefits. Furthermore, Future did not pay its employees any wages for some of the weeks they worked on these projects, and it paid them only a part of their wages for the hours they worked in other weeks. [2] [3] 5. The certified payroll records which Future submitted to the U.S. Department of the Army were inaccurate and incomplete. They did not contain the names of all employees who worked on the project sites. The certified payrolls indicated that employees had been paid the full wages shown thereon when, actually, Future had paid them no wages in certain weeks and had paid them only a part of the wages owed them in other workweeks. George C. Doran certified, as President of Future, that the payroll records were complete and accurate. 6. Back wages computed for the prevailing wage and overtime are in the total amount of $154,193.03 due 113 employees. 7. Respondent has paid $65,347.29 of said back wages, leaving a balance of $88,845.74. CONCLUSIONS OF LAW 1. Section 5.5(a)(6) of Regulations, 29 C.F.R. Part 5, provides that a prime contractor, is responsible for "compliance by any subcontractor with all the contract clauses in 29 C.F.R. 5.5" which includes the requirement to pay all laborers and mechanics in accordance with the applicable prevailing wage and overtime standards. 2. Future has failed to comply with the 29 C.F.R. 5.5 contract clauses as noted above at Findings of Fact, resulting in unpaid back wages of $88,845.74. 3. Pursuant to 29 C.F.R. Section 5.5(a)(6), Respondent is responsible for payment of said unpaid back wages. ORDER Based upon the foregoing, Respondent, Trataros Construction Corporation, is liable for the unpaid and outstanding back wages of $88,845.74, and the funds presently withheld by the contracting agency, to such extent of liability, shall be released to the Department of Labor, Employment Standards Administration, to be distributed by the Department of Labor to the affected employees. RALPH A ROMANO Administrative Law Judge Camden, NJ [3]