Flawed System Lets Contractors Cheat Workers on Federal Building Jobs

AUG 21 2017, 4:58 AM ET
by MARYAM JAMEEL

This story was originally published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.

Like many buildings of its vintage, the century-old headquarters of the United States General Services Administration was once lined with asbestos.

The hazardous mineral, used for fireproofing, filled nearly a half-million square feet of the building on F Street in downtown Washington. It took more than a hundred licensed workers almost a year to pry out the substance during a renovation that began in 2011. The workers would log nightly nine-hour shifts, spent mostly in air-tight spaces that reached 100 degrees.

The pay for this grueling task was dictated by the Davis-Bacon Act, a 1931 law that promises specific wages and benefits for construction work on government buildings and infrastructure. The compensation set by the U.S. Department of Labor under the act, based on location and job duties, is often higher than what’s offered on private-sector projects.

Three workers on the GSA job who spoke to the Center for Public Integrity said their employer didn’t tell them what they were owed under the law. They and 124 others filed a complaint with the Labor Department’s Wage and Hour Division in 2011.

Investigators found in the workers’ favor, saying they should have earned $25.47 per hour including benefits, as skilled laborers, a specific category of employee under Davis-Bacon. Instead, their supervisors paid them $15.84 an hour and classified their work as general labor. Six years after the complaint was filed, the investigation remains open on appeal. The workers still haven’t gotten their back pay.

“You feel powerless,” said Luis Fonseca, one of the asbestos removal workers.

But in some ways, Fonseca and his former co-workers already have beaten the odds.

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Workers cheated as federal contractors prosper

A Center analysis found that government agencies paid $18 billion over an 18-month period to companies with wage violations

By Talia Buford, Maryam Jameel
April 6, 2017 4:54

“I knew it was a federal building, but since everyone else was paying low wages, too, I just figured that’s how it was supposed to be,” Quezada, 40, said in a recent interview at her home in Arlington, Virginia.

Actually, that’s not how it’s supposed to be. But each year, thousands of contractors enriched by tax dollars skirt federal labor laws and shortchange workers. In fact, U.S. Department of Labor data show that upwards of 70 percent of all cases lodged against federal contractors and investigated by the department since 2012 yielded substantive violations.

But many of these violators go on to receive more federal contracts. An Obama administration effort to change that practice was derailed in late March by President Donald Trump.

The Center for Public Integrity examined a subset of 1,154 egregious violators – those with the biggest fines, highest number of violations or most employees impacted – included in the Labor Department’s Wage and Hour Division enforcement database and cross-referenced them with more than 300,000 contract records from the Treasury Department. The Center found that between January 2015 and July 2016:

  • Federal agencies modified or granted contracts worth a total of $18 billion to 68 contractors with proven wage violations. Among them: health-care provider Sterling Medical Associates, Cornell University and Corrections Corporation of America
  • Of all agencies, the U.S. Department of Defense employed the most wage violators – 49, which collectively owed $4.7 million in back pay to almost 6,200 workers. The department paid those 49 contractors a combined $15 billion.
  • Violations by the 68 contractors affected some 11,000 workers around the country – about the same number of people who moved to D.C. in 2016.

 

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