DOL recovers nearly $8 million in back pay

Michael P. Tremoglie Nov. 29, 2011, 8:44am


SILVER SPRING, Md. (Legal Newsline) - The Department of Labor announced last week that it recovered $7,968,744 in back wages, fringe benefits and 401(k) plan assets for more than 2,000 security guards formerly employed by USProtect Corp.

USProtect is a now-defunct company that provided security services for federal buildings across the country.

The DOL's actions against the company related to violations of the McNamara O'Hara Service Contract Act and the Employee Retirement Income Security Act.

Investigators found that the company, which is in bankruptcy, failed to pay hundreds of employees for their last two and a half weeks of work, and many employees were not paid the prevailing wage for their geographic areas or fringe benefits. The company also failed to remit employee salary deferral contributions to their 401(k) plan accounts.

The settlement between the federal government and a bankruptcy trustee allows for a total recovery of $7,968,744, of which $6,951,977 was recovered for the employees' wages and cash fringe benefits. The remaining $1,016,767 was recovered for the employees' 401(k) accounts.

"I am very pleased that former USProtect employees will receive the back wages, fringe benefits and retirement assets they earned and are owed," said Labor Secretary Hilda L. Solis. "This settlement represents a remarkable recovery for a bankruptcy proceeding and is due to the coordinated effort of the Department of Labor's agencies, Department of Justice attorneys, the bankruptcy trustee and various federal contracting agencies."

USProtect Corp. provided security services for various federal departments including the Social Security Administration, the U.S. Department of Justice, the U.S. Army, the U.S. Air Force, and the U.S. Department of Homeland Security. Contracts covered services provided in California, Delaware, the District of Columbia, Louisiana, Maryland, Mississippi, Missouri, New Jersey, Oklahoma, Pennsylvania, Texas and the Virgin Islands.

The McNamara-O'Hara Service Contract Act requires contractors and subcontractors performing federal service contracts in excess of $2,500 to pay service employees no less than the wage rates and fringe benefits found prevailing in the locality for the classification of work that they perform.

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