On August 25, 2021, the U.S. Department of Labor (“DOL”) released that its Wage & Hour Division recovered $531,173 in back wages for 45 ironworkers who performed federally funded construction at the National Institute of Health’s (“NIH”) Building 10, East Wing renovation in Bethesda. Investigators found that Clinton-based HMW LLC falsified its certified payrolls, hiding that it failed to pay the required Davis Bacon prevailing wages, including overtime premiums. The investigation also revealed that the employer failed to maintain proper records.
HMW LLC was a 2nd tier subcontractor who provided welders to perform ironwork on the structural steel parts of the building for 1st tier subcontractor Congressional Iron Works of Frederick. The general contractor for the $181 million project is The Whiting-Turner Contracting Company of Baltimore, under contract# HHSN292201700010C. The renovation into a modern Bio-Medical Lab Research facility is to be completed by December 31, extended from April 30, 2021.
DOL executed a Debarment Consent Agreement with HMW LLC; the firm’s owner and president, Roxanne Harris; and its operations manager, Robert Harris, as a result of the serious labor standards violations related to the firm’s performance. Under this agreement, the debarred parties will remain ineligible to bid on federal contracts covered by the Davis Bacon and Related Acts for a period of 3 years.
Based on documents the investigator was able to obtain, and information including worker statements, it was determined the employer willfully misrepresented that it was paying its ironworker welders the required rate on certified payroll submissions to the government, when in fact, they were paying considerably less - sometimes more than 50% less. 22 affected employees were not paid the time-and-a-half overtime premium in violation of the Contract Work Hours and Safety Standards Act (CWHSSA), and not all of the affected ironworkers received pay stubs. The pay stubs ironworkers did receive were devoid of hours worked or hourly rates.
The prime contract between the NIH Office of Research Facilities and Whiting Turner was found to include all the appropriate labor clauses and the wage determination as required by the Davis Bacon Act in 29 CFR 5.5(a)(6). However, Congressional Iron Works’ subcontract with HMW LLC did not include the required clauses or wage determination. In accordance with 29 CFR 5.5(a)(6), as the prime contractor, Whiting Turner carries the obligation of compliance and is responsible for ensuring the required language is provided to all subs. The U.S. DOL Field Operations Handbook states the prime is responsible for the back wages if there is not proper flow down of the wage determination and/or clauses to the subcontractors.
A final U.S. DOL conference discussing violations and the back wages was held in June with prime Whiting Turner; Congressional Iron Works - the 1st tier sub who failed to flow the required clauses and provisions down; and the 2nd tier sub HMW LLC. After an unsuccessful attempt to reduce the amount, counsel for Congressional Iron Works subsequently emailed the investigator an agreement to pay the full back wages determined in the investigation form WH-56 Summary of Unpaid Wages. HMW LLC was advised via counsel that it would be responsible for the back wage payroll tax obligations, and pursuant to 29CFR 5.8, liquidated damages computed for the CWHSSA overtime violations were provided to the NIH Office of Research Facilities for further administration with The Whiting Turner Contracting Company.
Sources: U.S. DOL press release, August 25, 2021
U.S. DOL case narrative, ID# 1932135