California Cartage Co. has agreed to pay $3,573,074 to 1,416 employees after the U.S. Department of Labor Wage and Hour Division found the company violated federal contract provisions of the McNamara-O’Hara Service Contract Act (SCA) for work performed at a Centralized Examination Station operated for the U.S. Customs and Border Protection at the Port of Los Angeles/Long Beach.
Government investigators determined CalCartage violated the law by failing to pay prevailing wages and required health and welfare benefits. Investigators found the company also failed to apply the SCA clauses and wage determination to contracts for five subcontractors, which resulted in the subcontractors’ failure to pay required prevailing wages and fringe benefits to their employees as well.
The contract required certain hourly rates, depending upon the positions workers held, and also required the payment of fringe benefits, holiday and vacation time.
CalCartage received federal funds to provide port drayage services of cargo selected for inspection by the CBP at a centralized examination facility.
“No contractor receiving federal funds to provide services to the government should gain an economic advantage by paying workers below the wages and fringe benefits required by applicable law,” said Wage and Hour Division District Director Kimchi Bui in Los Angeles. “Workers must be paid what they are legally owed for their work. Violations can be avoided, and we encourage employers to reach out to us for guidance.”
CalCartage said it reached a settlement with the government Aug. 10.
In a statement, it said the alleged violations occurred from November 2014 through November 2016, prior to NFI’s acquisition of CalCartage and the customs exam operation in October 2017.
“Settlement discussions accelerated following the acquisition in part because of NFI’s commitment to ensuring that its employees are compensated fairly and in compliance with all laws. All employees at the customs exam operation are now paid the required prevailing wage and welfare rates in compliance with applicable laws, and such rates are continually monitored in order to ensure compliance.”
Government investigators determined CalCartage violated the law by failing to pay prevailing wages and required health and welfare benefits. Investigators found the company also failed to apply the SCA clauses and wage determination to contracts for five subcontractors, which resulted in the subcontractors’ failure to pay required prevailing wages and fringe benefits to their employees as well.
The contract required certain hourly rates, depending upon the positions workers held, and also required the payment of fringe benefits, holiday and vacation time.
CalCartage received federal funds to provide port drayage services of cargo selected for inspection by the CBP at a centralized examination facility.
“No contractor receiving federal funds to provide services to the government should gain an economic advantage by paying workers below the wages and fringe benefits required by applicable law,” said Wage and Hour Division District Director Kimchi Bui in Los Angeles. “Workers must be paid what they are legally owed for their work. Violations can be avoided, and we encourage employers to reach out to us for guidance.”
CalCartage said it reached a settlement with the government Aug. 10.
In a statement, it said the alleged violations occurred from November 2014 through November 2016, prior to NFI’s acquisition of CalCartage and the customs exam operation in October 2017.
“Settlement discussions accelerated following the acquisition in part because of NFI’s commitment to ensuring that its employees are compensated fairly and in compliance with all laws. All employees at the customs exam operation are now paid the required prevailing wage and welfare rates in compliance with applicable laws, and such rates are continually monitored in order to ensure compliance.”