Wage and Hour Division (WHD)

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WASHINGTON -- The U.S. Department of Labor has filed suit before an administrative law judge against S3 LTD, and owner William Casanova for alleged violations of the McNamara-O'Hara Service Contract Act. The administrative complaint seeks to recover $1,976,571 in fringe benefits for 1,451 workers and to prevent the company and William Casanova from obtaining federal contracts for a period of three years.

"As part of the department's efforts to ensure that workers are paid properly, the Department of Labor is seeking nearly $2 million in unpaid fringe benefits for 1,451 workers," said Secretary of Labor Elaine L. Chao. "This case underscores the importance of employers knowing their responsibilities under the McNamara-O'Hara Service Contract Act."

The legal action follows an investigation conducted by the U.S. Labor Department's Wage and Hour Division, which concluded that the company failed to pay service employees the fringe benefits required by the contract and federal law, including severance pay, vacation pay, paid sick leave and health and life insurance.

S3, with offices in Virginia Beach, Va. and California, had a contract with the U.S. Fleet and Industrial Supply Center to provide logistical, material and support services to United States military installations and other federal agencies on the East and West Coasts in October 1997.

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 in the United States through the use of "service employees." It 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 investigation was conducted by the Richmond, Va. district office of the Wage and Hour Division, 400 N. 8th Street, Richmond, Va. 23240. Phone (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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