Consumer Fraud

Air Force Contractor Agrees To Pay Employees Nearly $1 Million In Back Wages

money Air Force Contractor Agrees To Pay Employees Nearly $1 Million In Back WagesAir Force contractor General Atomics Aeronautical Systems, Inc., a San Diego-based manufacturer of unmanned aircraft and surveillance systems is paying nearly $1 million in back wages to employees throughout the country who were paid less than the prevailing rates at work sites away from their home base.

Corporations that want government contracts are required to pay their workers the prevailing wage rates and benefits of the geographical area where their work site is located. The law aims to ensure that companies do not make their services less costly at the expense of their workers or drive down wages for other workers in the area.

The U.S. Department of Labor’s Wage and Hour Division investigated General Atomics’ employee payment practices and found that it had underpaid 901 of its employees at various locations throughout the U.S.  in violation of the federal wage requirement.

The company manufactures unmanned aircraft systems, tactical reconnaissance radars, and advanced high-resolution surveillance systems for the Air Force. Suppliers that contract with the Air Force are subject to the requirements of the McNamara-O-Hara Service Contract Act, which sets the pay rules for employers that require their employees to work in locations away from home.

According to the Labor Department, General Atomics paid employees assigned to work outside of their home areas the prevailing wage rates for their home area instead of the area in which they worked. Investigators found that the company’s time-tracking systems failed to account for work site locations.

To resolve the problem, General Atomics agreed to pay its employees the highest prevailing wage among all of its job sites going back six years. The company has also upgraded its time-keeping system to ensure its employees get paid the right wages according to their job site location.

“Failing to pay the correct prevailing wages hurts workers, and it also negatively affects other contractors who pay proper wages,” said David Weil, administrator of the Wage and Hour Division, who acknowledged that the company started implementing changes when it learned its pay practices failed to comply with federal contracting laws.

Source: U.S. Department of Labor