MAJOR ASSOCIATES, INC., WAB No. 84-14 (WAB May 20, 1985)
CCASE:
MAJOR ASSOCIATES, INC
DDATE:
19850520
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
MAJOR ASSOCIATES, INC. WAB Case No. 84-14
Elderly Housing Projects
Jonestown, Marks, Lambert & Dated: May 20, 1985
Webb, Mississippi
APPEARANCES: Cornelius Turner, President, Major Associates, Inc.
Robert J. Miller, Esquire, Douglas Davidson, Esquire
for the Wage and Hour Division, U S. Department of
Labor
BEFORE: Alvin Bramow, Chairman, Stuart Rothman, Member
Thomas X. Dunn, Member
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition
of Major Associates, Inc., Cornelius Turner, President,
(hereinafter Major Associates) seeking review of the June 27, 1984
decision of the Administrator, Wage and Hour Division. In his
decision the Administrator denied a recommendation from the
Associate Administrator of the Farmers Home Administration that a
waiver be granted of the liquidated damages computed in the amount
of $5,500 as a result of violations of the Contract Work Hours and
Safety Standards Act (CWHSSA) by Major Associates. The
Administrator determined that petitioner's employees generally
worked [1]
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[2] 10-hour days for a total of 40 hours per week and that petitioner
did not pay overtime rates as required by CWHSSA The certified payrolls
submitted to the contracting agency, however, indicated that on many
weeks petitioner's employees worked five 8-hour days per week. Because
of this the Administrator concluded that the violations were not
inadvertent and therefore the liquidated damages should not be waived.
The factual situation out of which this appeal arose is
not being disputed. Petitioner, located in Jackson, Mississippi,
was the prime contractor on 4 contracts for the construction of
housing for the elderly at 4 separate locations in the Mississippi
Delta, approximately 160 miles south of Jackson. The four
projects received insured loan guarantees from the Farmers Home
Administration and rent subsidies from the Department of Housing
and Urban Development. All contracts were subject to labor
standards provisions of the U S. Housing Act of 1937, as amended,
the CWHSSA and the applicable regulations.
An investigation of petitioner's projects by the Wage and
Hour Division disclosed that Major Associates failed to pay
proper overtime compensation to its employees. It appeared from
the investigation that petitioner's employees generally worked
on all four of the housing projects. They traveled from Jackson
on Monday morning and stayed in the delta area until Thursday night
when they returned to Jackson. The employees normally worked
from 10 to 12 hour days for four days, Monday through Thursday [2]
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[3] at straight time. They were also paid for travel time at
straight time when going back and forth to Jackson and when
travelling from one site to another in the delta. Some employees
also worked on non-Davis-Bacon projects in Jackson on Fridays and
Saturdays.
The Wage and Hour investigation disclosed that the company
kept two sets of books, one on which the employee's pay was
computed, all at straight time, and one which contained the
certified payroll reports signed by Mr. Turner and submitted to
the contracting agency. This latter record showed that the
employees were working 8 hours daily on the Davis-Bacon projects,
Monday through Friday. As a result, back wages due 47 employees
were calculated in the amount of $2,696.14 which Major Associates
has paid in full. The liquidated damages due as a result of the
CWHSSA violations amounted to $5,500, and it is this amount
which is the subject of this appeal.
The Wage and Hour Division relies on the fact that Major
Associates submitted falsified certified payrolls to the federal
contracting agency on the four federal housing projects to justify
its imposition of liquidated damages to petitioner. Petitioner,
on the other hand, relies on the fact that in many years of
contracting it has never been found in violation of any of the
labor standards provisions of the Davis-Bacon or related acts, and
that its agents, that is its foremen and bookkeepers, deliberately
failed to follow the instructions of Mr. Turner with regard to [3]
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[4] limiting the hours of the employees to 8 hours per day and 40
hours per week.
The Board considered this appeal on the basis of the Petition
for Review filed by petitioner and the Solicitor of Labor filed
a statement, a supplemental statement and the record of the appeal
before the Wage and Hour Division on behalf of the Administrator.
An oral hearing was held before the full Board on April 19, 1985
at which all interested persons were present and participated.
* * *
The only question before this Board is whether a waiver
or adjustment should be granted of the liquidated damages
which were assessed as a result of violations by the petitioner
of the Contract Work Hours and Safety Standards Act, 40 U.S.C.
327 et seq.
The Contract Work Hours and safety Standards Act under which
the liquidated damages were assessed provides in pertinent part:
. . ., if it is found . . . that the contractor or
subcontractor violated the provisions of this Act
[*] inadvertently notwithstanding the exercise of due
care on his Dart and that of his agents [*],
recommendations may be made to the Secretary that an
[*] appropriate adjustment in liquidated damages be
made [*], or that the contractor or subcontractor
[*] be relieved of liability for such liquidated
damages [*]. The Secretary shall review all pertinent
facts in the matter and may conduct such investigations
as he deems necessary, so as to affirm or reject the
recommendation. 40 U.S.C. at [sec] 330(c). [*] (Emphasis
added.) [*]
There is no question that the petitioner violated the [4]
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[5] overtime provisions of the aforementioned statute. The record
shows that Major Associate's employees generally worked more
than eight hours per day but the petitioner reported on its
certified payrolls that no more than eight hours per day were
worked. This concealment, no matter whether caused by the
petitioner or his agents, in itself shows that the violations
were not "inadvertent" and that petitioner did not exercise
"due care". See C.M. Bone, WAB Case No. 78-04 (September 13,
1978). In view of the submission of falsified payrolls the
Board must agree with the Administrator's decision that the
assessment of liquidated damages should not be waived.
However, at the oral hearing, Counsel for the Administrator
conceded that there have been instances where the payrolls were
falsified and the liquidated damages, although not waived,
were reduced. In one such example the violations amounted to
approximately $3,300 whereas the liquidated damages were assessed
at $62,000. The liquidated damages were not waived but were
reduced to around $15,000.
Here, we have a case where the projects involved more than
$1 million and the overtime violations amounted to only $2,696.14.
This certainly does not appear to be a flagrant violation of the
Act. At most, it seems the petitioner tried to cover-up some
minor overtime hours worked. This, coupled with the fact that
the petitioner has perf[or]med previous government contracts
with no known violations, leads the Board to believe that the [5]
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[6] violations in this case do not warrant the full reme[]dy of
$5,500.
In view of the foregoing, it is the decision and order
of this Board that the liquidated damages be adjusted to
$1,375.00.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [6]
