NEW YORK — More than 400 employees of Fedcap Rehabilitation Services Inc., a federal contractor, will receive restitution as part of a $2.8 million settlement to resolve the company's failure to pay the workers' required "fringe benefits" into their retirement accounts.
According to the U.S. Department of Labor's Wage and Hour Division (WHD), Fedcap, which provides janitorial and maintenance services for federal offices and facilities, did not pay the additional benefits into employee retirement accounts. The WHD also found that Fedcap did not calculate the right employee health and welfare additional benefits for hours worked at its Federal Plaza location in New York City. In addition, the WHD said, an investigation revealed Fedcap had 17 violations at its 18 other federal offices and facilities in New York and New Jersey. The WHD also alleges the company violated the law by deducting "third-party administrative fees" from workers' pay.
"When employers receive federal funds to provide services to the government, they must comply with all applicable laws to ensure that their employees receive legally required pay and benefits," WHD New York City District director David An said in a statement. "The McNamara-O'Hara Service Contract Act protects the wages of employees and keeps a level playing field for employers. Violations can be avoided, and we encourage employers to reach out to us for guidance."
According to the settlement, Fedcap will pay the restitution to 443 employees in New York and New Jersey.