The U.S. Department of Labor (“Department”) has recovered $633,029 in back wages for 84 workers denied their full wages and benefits by subcontractors who performed mechanical, electrical, finishing, masonry, exterior and site work for the construction of a new, $52.6 million affordable housing development primarily funded by Washington, D.C.’s Housing Finance Agency (“DCHFA”) and D.C.’s Department of Housing & Community Development (“DC DHCD”) via tax exempt bonds, low income housing tax credit (“LIHTC”) equity, deferred developer fees, and subordinate debt via D.C.’s Housing Production Trust Fund. The project’s general contractor was McCullough Construction, LLC (“McCullough”) and the development team included MidAtlantic Realty Partners, LLC (“MRP”), Taylor Adams Associates (“TAA”), and Audobon Enterprises (“Audobon”).
Three offices of the Department’s Wage & Hour Division conducted investigations of six subcontractors hired to work on the 2442 MLK The Bridge project by McCullough and its first-tier subcontractors, including first-tier subs Titan Mechanical, Inc. of Manassas Park, Virginia (“Titan”) and Colonial Electric Company, Inc. of Harwood, Maryland (“Colonial”). In total, the Division found that 6 down-tier subcontractors violated the Davis-Bacon Act (“DBA”), Contract Work Hours and Safety Standards Act (“CWHSSA”), and the Fair Labor Standards Act (“FLSA”).
The Division recovered $292,193 in back wages for 14 employees of MTZ Electric Service, LLC of Laurel, Maryland (“MTZ”), after determining the subcontractor misclassified workers as independent contractors, failed to pay prevailing wage rates and the required overtime premium, failed to provide health and welfare fringe benefits, and violated recordkeeping requirements when it omitted workers from certified payroll records and falsified certified payroll records. Colonial, the first-tier subcontractor that hired MTZ, agreed to pay the back wages. To resolve the case, MTZ’s owner, Victor Martinez, signed a consent agreement to accept debarment, which prohibits the employer from bidding on federally funded construction projects for a period of three years.
The Division also recovered $253,146 in back wages for seven workers of Igloo Construction, Inc. of Westminster, Maryland (“Igloo”). Investigators found the employer failed to pay proper prevailing wages and fringe benefits, falsified certified payroll records, and hired a labor broker who failed to report its workers on weekly certified payroll records. The Division held the first-tier contractor, Titan, liable for the back wages because they failed to include the required Davis-Bacon labor standards’ clauses in their subcontract with Igloo.
The Division also found Davis-Bacon Related Act (“DBRA”) and CWHSSA violations by the following subcontractors:
M&Y Exteriors, LLC of Manassas, VA
Misclassification of employees; CWHSSA overtime premium owed.
7 affected workers
$53,451
Muller Construction, LLC of Springfield, VA
Prevailing wage and fringe benefits owed; falsified records; workers omitted from records; CHWSSA overtime premium owed.
5 affected workers
$19,460
Allied Drywall Construction, Inc. of Washington, D.C.
Prevailing wage and fringe benefits owed.
45 affected workers
$10,051
Diverse Masonry Corp. of Catharpin, Virginia
Prevailing wage and fringe benefits owed.
6 affected workers
$4,728
Contractors must properly incorporate the applicable wage determination and the Davis-Bacon labor standards clauses directly into all lower-tier subcontract agreements when working on a publicly funded Washington, D.C. construction project. The non-profit Foundation for Fair Contracting – Mid-Atlantic Region (FFC-MAR) is here to assist owners and contracting agencies, developers and general contractors, first-tier subcontractor primes and down-tier subs with monitoring solutions that ensure compliance with all applicable wage & hour laws, craft & business licensing requirements, apprenticeship standards, and minority business enterprise commitments.
McCullough, MRP, and TAA have been team on other publicly funded construction in Washington, D.C., namely DCHFA’s multi-phased Northwest One development in Ward 6’s NoMa neighborhood. A component of the Northwest One Redevelopment Plan, the three-phased project is part of the New Communities Initiative from the Office of the Deputy Mayor for Planning and Economic Development (“DMPED”). Phase I’s financing included $29.9 million in tax-exempt bonds issued by DCHFA, and the agency also underwrote $17.4 million in four percent LIHTC equity. DMPED provided additional financing for phase I via a $13.8 million loan.
The FFC is a non-profit organization dedicated to protecting workers on government construction projects from substandard wages and working conditions.