Wage and Hour Division (WHD)

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OPELOUSAS, La. -- The U.S. Department of Labor today announced the settlement of an administrative lawsuit filed against subcontractor KDS Construction LLC for failing to pay prevailing wage rates, fringe benefits and overtime to two former employees, as required by the Service Contract Act (SCA) and the Contract Work Hours and Safety Standards Act (CWHSSA). The department successfully sought $7,928 in the legal action, as well as debarment of the responsible parties.

The complaint was filed before the Department of Labor’s Office of Administrative Law Judges against KDS Construction LLC, its owners Kenneth Dewayne Soulter and Yvette Soulter, and Triple B Construction as a result of an investigation covering the period from Nov. 6, 2005, to Dec. 28, 2005, by the department’s Wage and Hour Division office in New Orleans. On Nov. 19, 2007, the Labor Department filed executed consent findings as well as an agreement for voluntary debarment resolving all issues covered by the filed complaint. On Dec. 4, 2007, Chief Administrative Law Judge John M. Vittone signed an order approving the consent findings and agreement.

The investigation found that the company failed to pay the prevailing wage rate to laborers employed to remove debris in the New Orleans area under federal contracts held by the U.S. Army Corps of Engineers in the aftermath of Hurricane Katrina. “This employer not only failed to pay its employees the prevailing wages for all hours worked and pay fringe benefits, but also failed to maintain required time and payroll records,” said Cynthia Watson, the Wage and Hour Division’s regional administrator in Dallas.

Back wages have been paid in full by Risk Management, the subcontractor that engaged KDS to perform on the contract.

The SCA covers contracts entered into by federal agencies, where the principal purpose of the contract is to furnish services in the United States through the use of “service employees.” The law requires that every federal service contract in excess of $2,500 contain a wage determination setting forth wages and fringe benefits prevailing in the locality or contained in the collective bargaining agreement of the predecessor contractor.

The CWHSSA requires the payment of time and one-half the basic rate of pay for all hours worked more than 40 in a workweek. Contractors must ensure that their subcontractors are fully informed of requirements under federal government contract labor laws.

This investigation is one of many compliance actions conducted by the Wage and Hour Division in the Gulf Coast region to ensure that workers involved in hurricane-related activities are properly compensated.

The Labor Department’s Wage and Hour Division concluded 31,987 compliance actions and recovered more than $171 million in back wages for more than 246,000 employees in fiscal year 2006. Back wage collections in fiscal year 2006 represent a 30 percent increase over back wages collected in fiscal year 2001. The number of workers receiving back wages has increased by 14 percent since fiscal year 2001.

For information about federal government contract laws, call the Department of Labor’s toll-free helpline at 866-4US-WAGE (487-9243) or contact the Wage and Hour Division’s district office in New Orleans at 504-589-6171. Information is also available on the Internet at www.wagehour.dol.gov.

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