At the hearing, Casares and Covarrubias testified that they had signed a paper stating that they had a one percent interest in Nationwide, but they never received any profits from the company and never carried out any managerial or administrative duties. GX 6, 7, T. 101, 109, 112, 116-17. Flintroy and Yoshikawa testified that they never had any partnership interest in Nationwide and did not indicate that they engaged in managerial or administrative activities. T. 131-136, 137-144. Neither McCoy nor Royal Glaude testified.

   The Board has jurisdiction to hear and decide appeals from decisions of Administrative Law Judges regarding questions of law and fact arising under the SCA. 29 C.F.R. Part 8. The regulations at Part 8 provide that "the ARB shall modify or set aside [an ALJ's] findings of fact only when it determines that those findings are not supported by a preponderance of the evidence." 29 C.F.R. §8.9(b); see, e.g., Dantran, Inc. v. United States Dep't of Labor, 171 F.3d 58, 71 (1st Cir. 1999).

   Pursuant to the Administrative Procedure Act, in reviewing the ALJ's conclusions of law the Board (as the designee of the Secretary) acts with "all the powers [the Secretary] would have in making the initial decision. . . ." 5 U.S.C. §§557(b). Accordingly, the Board reviews the ALJ's conclusions of law de novo. See Yellow Freight Systems, Inc. v. Reich, 8 F.3d 980, 986 (4th Cir. 1993) and Roadway, Inc. v. Dole, 929 F.2d 1060, 1066 (5th Cir. 1991); see generally Mattes v. United States Dep't of Agriculture, 721 F.2d 1125, 1128-30 (7th Cir. 1983) (rejecting argument that higher level administrative official was bound by ALJ's decision); McCann v. Califano, 621 F.2d 829, 831 (6th Cir. 1980), and cases cited therein (sustaining rejection of ALJ's recommended decision by higher level administrative review body).

I. Whether the Five Nationwide Drivers were "Service Employees"

   Glaude argues that Nationwide's drivers who worked on Contract No. 95034 were partners in Nationwide and therefore were not service employees within the meaning of the SCA. We need not decide whether any of the five drivers were, in fact, partners in Nationwide, because even if they were, their status would not remove them from coverage under the SCA. The SCA defines "service employee" as

41 U.S.C. §357(b) (emphasis added). The regulations

governing the SCA provide:

Any person, [except those employed in a genuine executive, administrative or professional capacity] . . . who performs work called for by a contract or that portion of a contract subject to the Act is, per se, a service employee. Thus, for example, a person's status as an "owner-operator" or an "independent contractor" is immaterial in determining coverage under the Act and all such persons performing the work of service employees must be compensated in accordance with the Act's requirements.

29 C.F.R. §4.155 (emphasis added). Thus, it is clear that it is an employee's work duties, not his or her title or status in the business, that determine whether he or she is a service employee. Here, the five Nationwide employees were indisputably working on a contract entered into by the United States which provided services delivery of U.S. mail in the United States. Their asserted status as partners in Nationwide is irrelevant to the issue of coverage under the SCA.

   The Secretary previously has addressed and rejected a similar claim that service workers were partners and therefore exempt from the SCA in In re Ayres, Case No. 87-SCA-83, Sec'y Final Dec. and Ord. (June 26, 1991). In that case the respondent argued that workers hired to perform on a contract with the U.S. Forest Service were partners and therefore not service employees within the meaning of the SCA. The ALJ held that the under the SCA, the alleged partnership "has no bearing on a contractor's duty to comply with the Act." In re Ayers, slip op. at 6. The Secretary affirmed, observing that "Respondent's insistence on referring to his workers as 'partners,' either as a genuine belief or as a scheme to evade an employer's obligations, cannot alter the disposition of this case." Id. at 6-7. The principle in Ayers is applicable to this case: the asserted status of the Nationwide drivers as "partners" does not alter the fact that they were "service employees" within the meaning of the SCA.

   The only exemption from SCA coverage for "persons employed in a bona fide executive, administrative, or professional capacity" is not applicable to the five Nationwide drivers. Part 541 of Title 29 provides extensive guidance on the meaning of the phrase "employed in a bona fide executive, administrative, or professional capacity," and includes the requirement that an employee must devote at

least 80 percent of his or her hours of work to executive, administrative, or managerial activities. 29 C.F.R. §§541.1(e), 541.2(d), 541.3(d). Glaude presented no evidence that the drivers in question who worked hauling, loading, and unloading mail spent any of their time working in an executive, administrative or professional capacity. This exemption therefore is inapplicable.

   For these reasons we affirm the ALJ's holding that the five Nationwide drivers are "service employees" within the meaning of the SCA.

II. Driver Back Wages

   We also affirm the ALJ's conclusion that the accrued payments due on Nationwide's contracts with the Postal Service and the Navy, in the amounts of $3,099.50 and $10,961.23, respectively, should be withheld for payment of the back wages owed. D. and O. at 6. When an employer fails to pay at least the minimum compensation due under the SCA, "[s]o much of the accrued payment due on the contract or other contracts between the same contractor and the Federal Government may be withheld as is necessary to pay such employees." 41 U.S.C. §352(a). Such withholding may occur prior to the commencement of any administrative proceeding by the Wage and Hour Division. 29 C.F.R. §4.187(a).

   We also affirm the ALJ's holding that Glaude and Nationwide are liable for the remaining $13,347.59 (the total back wages minus the withheld amounts). As the business manager who supervised the performance of the contract and directed the pay practices of the company, Glaude is liable for the back wages individually and jointly with the company. 29 C.F.R. §4.187(e)(1). Because Glaude did not maintain records demonstrating the actual number of hours worked by the underpaid drivers, the Postal Service's records were sufficient proof of hours worked for backwage reconstruction purposes. See, e.g., Ray v. Department of Labor, 26 WH Cases 1244, 1246 (C.D. Ill. 1984); In re Grover, 22 WH Cases 1302, 1306 (1976).

III. Debarment

   We affirm the ALJ's order debarring Glaude and Nationwide from holding government contracts for a period of three years. The SCA provides that, unless the Secretary recommends otherwise because of "unusual circumstances," a violating contractor shall be debarred from being awarded federal contracts for a period of three years. 41 U.S.C. §354(a). Contractors who seek to escape the debarment provision of Section 5(a) of the Act face a daunting task in successfully establishing the unusual circumstances defense. See, e.g., Nationwide Building Maintenance, Inc., BSCA Case No. 92-04 (Oct. 30, 1992); A to Z Maintenance Corp., 710 F. Supp. 853, 856 (D. D.C. 1989). The legislative history of the SCA makes clear that debarment of a contractor who violated the SCA should be the norm, not the exception, and only the most compelling of justifications should relieve a violating contractor from that sanction. Vigilantes, Inc. v. Adm'r, Wage and Hour Div., U.S.D.O.L., 968 F.2d 1412, 1418 (1st Cir. 1992).

   The term "unusual circumstances" is not defined in the SCA, but interpretive regulations at 29 C.F.R. §4.188(b) set forth a three-part test for determining when such circumstances exist and relief from debarment is appropriate. See. e.g., Island Movers, Inc., BSCA Case No. 92-29 (Oct. 30, 1992). The test has also been applied by the courts. See, e.g., Vigilantes, 968 F.2d at 1418; A to Z Maintenance Corp., 710 F.Supp. at 855. Under part one of the test:

[W]here the respondent's conduct in causing or permitting violations of the Service Contract Act provisions of the contract is willful, deliberate or of an aggravated nature or where the violations are a result of culpable conduct such as culpable neglect to ascertain whether practices are in violation, [or] culpable disregard of whether they were in violation or not, . . . relief from the debarment sanction cannot be in order.

29 C.F.R. §4.188(b)(3)(i). In other words, there must be not be proof of willful or culpable conduct, which would preclude relief from debarment. Part two of the test lists other prerequisites to relief, including a good compliance history, cooperation in the investigation, repayment of money due and assurances of future compliance. 29 C.F.R. §4.188(b)(3)(ii). Part three of the test lists additional factors which are to be weighed and considered, but only if the mandatory conditions set out in parts one and two have been satisfied. These include:

[W]hether the contractor has previously been investigated for violations of the Act, whether the contractor has committed recordkeeping violations which impeded the investigation, whether liability was dependent upon resolution of a bona fide legal issue of doubtful certainty, the contractor's efforts to ensure compliance, the nature, extent, and seriousness of any past or present violations, including the impact of violations on unpaid employees, and whether the sums due were promptly paid.

29 C.F.R. §4.188(b)(3)(ii).

   It is clear that Glaude and Nationwide failed to meet the challenging test for avoiding debarment under the SCA. First, as the SCA interpretive regulations make clear, a federal contractor is under an "affirmative obligation to ensure that its pay practices are in compliance with the SCA, and cannot itself resolve questions which arise, but must seek advice from the Department of Labor." 29 C.F.R. 4.188(b)(4). Glaude and Nationwide did not seek such advice in this instance, and in fact continued to adhere to a position that is flatly contrary to the SCA and its regulations.

   Glaude and Nationwide also failed to satisfy part two of the test. Neither Glaude nor Nationwide have paid the back wages due to the drivers, nor have they given any assurance that they will do so in the future. "A contractor seeking an 'unusual circumstances' exemption must run a narrow gauntlet." A to Z Maintenance Corp., 710 F. Supp. at 855. Because Respondents have failed to establish unusual circumstances justifying relief from debarment, we affirm the ALJ's finding that Glaude and Nationwide should be debarred.

IV. Other Claims

Any sum not paid to an employee because of inability to do so within three years shall be paid to the Treasury of the United States as miscellaneous receipts. 29 U.S.C. §354(b).

   We also affirm the ALJ's order that Glaude, Nationwide, and any firm, partnership, or association in which Glaude has a substantial interest shall be ineligible to receive any Federal contract or subcontract for a period of three years. Within 90 days of this Decision, the Administrator is directed to forward Respondents' names to the Comptroller General for debarment. 29 U.S.C. §354(a); see also 29 C.F.R. §6.21(a).

   SO ORDERED.

      PAUL GREENBERG
      Chair

      E. COOPER BROWN
      Member

      CYNTHIA L. ATTWOOD
      Member