Wage and Hour Division (WHD)

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Washington -- An Administrative Law Judge has ordered Michael Holiday, owner and president of Allstate Security, Silver Spring, Md., and his company to be debarred from obtaining any federal contracts for a period of three years. In addition, $265,367 in back wages has been paid to 155 employees. The firm provides security services at military installations.

"The labor department sought to prohibit the company from obtaining contracts with the U.S. government in this case because the employer deliberately violated the law and the violations were widespread throughout the company," said Tammy D. McCutchen, Administrator of the Wage and Hour Division. "The government should not be party to the underpayment of workers, especially those who provide important services."

Allstate Security had contracts with the Navy to provide armed guard perimeter security services at the Norfolk Naval Shipyard and Craney Island in Portsmouth, Va., and the Fleet and Industrial Supply Center at the Cheatham Annex in Williamsburg, Va.

According to an investigation by the U.S. Department of Labor's Wage and Hour Division, the firm failed to pay employees for all hours worked, failed to pay pension benefits and failed to pay the correct basic hourly rates. The employers' failure to pay these wages and benefits violated the McNamara-O'Hara Service Contract Act, administered by the Wage and Hour Division.

The Act requires that every federal service contract in excess of $2,500 contain a wage determination reflecting wages and fringe benefits prevailing in the locality or contained in the collective bargaining agreement of the predecessor contractor.

The McNamara-O'Hara Service Contract Act covers contracts entered into by federal agencies where the principal purpose of the contract is to furnish services to the United States through the use of "service employees."

The legal action follows an investigation conducted by the Richmond, Va. Wage and Hour Division, 400 N. 8th St., Richmond, Va. 23240, telephone (804) 771-2995.

For more information about the Service Contract Act or other laws administered by the Wage and Hour Division, call the toll-free help line at 1-866-4USWAGE (1-866-487-9243). Information is also available on the Internet at www.wagehour.dol.gov.

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