Wage and Hour Division (WHD)

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FORT SMITH, Ark. -- The U.S. Department of Labor has obtained a favorable judgment in an administrative action against Fort Smith-based employer Affordable Data Services Inc. The employer has been ordered to pay prevailing wage rates and holiday pay benefits totaling $16,974 to four former employees, as required by the Service Contract Act (SCA).

The case was tried before the Department of Labor’s Office of Administrative Law Judges. The case results from an investigation by the department’s Wage and Hour Division office in Little Rock, Ark., which revealed that Affordable Data Services failed to pay the prevailing wage rate and holiday pay to service employees under federal mail-hauling contracts awarded to the company.

The employer’s practice of requiring service employees to use their own vehicles to deliver mail, according to the assigned administrative law judge, served as an indirect “kick back” to the employer of a portion of the employees’ wages. The Internal Revenue Service’s standard business mileage rate was used to calculate the employees’ vehicle expenses.

“Affordable Data Services required service employees to use their own vehicles to deliver mail without providing additional compensation to cover vehicle expenses,” said Cynthia Watson, the Wage and Hour Division’s regional administrator for the Southwest. “Additionally, service employees did not receive the prevailing wages for hours worked. These practices are unacceptable.”

Under the SCA, contractors on federal services contracts in excess of $2,500 must pay their service workers no less than the wages and fringe benefits prevailing in the locality. The Labor Department issues wage determinations that list the required SCA wage rate and fringe benefit for each service occupation. These determinations are incorporated into covered federal contracts. Employers must also maintain accurate records of employees’ wages, hours and other conditions of employment.

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 last year 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 more information about these laws or others enforced by the Wage and Hour Division, call the Little Rock District Office at (501) 223-9114 or the Department of Labor’s toll free helpline at (866) 4US-WAGE (487-9243). Information is also available on the Internet at www.wagehour.dol.gov.

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