An investigation conducted by the Wage and Hour Division (WHD), part of the US Department of Labor, found that Frizzell Construction had incorrectly classified its skilled labourers, such as concrete finishers, ironworkers and carpenters, as general labourers. This meant that affected employees were on a lower rate of pay than their skill level required.
The organisation also did not record and pay the necessary rates to employees who work in multiple positions, despite the fact that different rates of pay are applicable for various roles.
Incorrectly classifying employees in this way further meant that overtime pay received for working more than 40 hours a week was paid at the wrong rate and that the required fringe benefits were not provided or paid.
These actions violate the Fair Labor Standards Act (FLSA), the Contract Work Hours and Safety Standards Act (CWHSSA) and the Davis-Bacon and Related Acts (DBRA).
The DBRA requires contractors and subcontractors working on federal or federally-funded projects to be paid the wage rates and fringe benefits determined by the US secretary of labor; this is typically included in contracts. Frizzell Construction would have been obliged to comply with this because it was contracted to work on the Morristown Utility Systems Contract A, Lowland Wastewater System Improvements. This is partially funded by The Economic Development Agency.
Nettie Lewis, district director, Nashville at the WHD, said: “No contractor should gain an economic advantage by paying [employees] below the wages and fringe benefits required on a prevailing wage project.
“Not only does this practice undercut what the [employees] involved are legally owed for their work, it results in unfair competition for contractors who play by the rules. We encourage all employers to contact us for guidance to avoid violations and ensure [employees] receive the wages they have earned.”