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ESA News Release: [09/19/2007]
Contact Name: Diana Petterson or Elizabeth Todd
Phone Number: (214) 767-4776, ext. 222 or 221
Release Number: 07-1347-DAL

U.S. Labor Department recovers nearly $1 million in back wages for Hurricane Katrina workers

two subcontractors agree to compensate 382 current and former workers

NEW ORLEANS — L & R Security Inc., headquartered in New Orleans, and HKA Enterprises Inc., headquartered in Duncan, S.C., have agreed to pay a total of $941,537 in back wages to 382 current and former security guards and debris removal workers.  An investigation by the U.S. Department of Labor’s Wage and Hour Division found that these workers were not properly paid in the wake of Hurricane Katrina as required by the Fair Labor Standards Act (FLSA), the Service Contract Act (SCA) and the Contract Work Hours Safety Standards Act (CWHSSA). Both companies were subcontractors to the prime contractor, CH2M Hill of Englewood, Colo.

“The department has made a concerted effort to ensure that workers involved in Hurricane Katrina recovery and cleanup know their rights and are paid all the wages they are owed,” said U.S. Secretary of Labor Elaine L. Chao. “In this case, almost $1 million in back wages will be paid to nearly 400 workers.”

L & R Security provided armed security at Federal Emergency Management Agency (FEMA) trailer sites in New Orleans. The Wage and Hour Division determined that the company, from August 2005 to July 2006, paid straight time for overtime hours worked by guards on both federal and non-federal contract jobs in violation of the CWHSSA and the FLSA. The subcontractor also failed to pay the required prevailing wage rate and fringe benefits required by the SCA. L & R Security has agreed to pay $185,385 in back wages to 239 workers. Additionally, the department has assessed a civil money penalty of $37,620 for repeating similar past violations.

The investigation of HKA Enterprises Inc., which provided debris removal monitoring in New Orleans under a separate FEMA contract after Hurricane Katrina, covered the period from Oct. 8, 2005, to Dec. 3, 2005. The Wage and Hour Division determined that the company paid workers straight time for hours worked in excess of 40 per week in violation of the FLSA. HKA Enterprises has agreed to pay $756,152 in back overtime wages to 143 workers.

The FLSA requires that covered employees be paid at least the federal minimum wage of $5.85 for all hours worked, plus time and one-half their regular rates of pay for hours worked over 40 per week. The minimum wage will increase to $6.55 per hour effective July 24, 2008, and to $7.25 per hour effective July 24, 2009. Under the law, employers must also maintain accurate time and payroll records.

For more information about the FLSA and other laws administered by the Wage and Hour Division, call the division’s New Orleans District Office at (504) 589-6171 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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