News
October 18, 2024

Pennsylvania Contractor Ordered to Pay $85K in Back Wages to Federal Project Workers

Caroline Raffetto

A Pennsylvania-based federal contractor has been mandated by an administrative law judge to pay $85,284 in back wages for failing to compensate workers appropriately on various federal construction projects, as reported by the U.S. Department of Labor (DOL).

The judge determined that JRW Service Group LLC and its owner, Jason Winters, violated the Davis-Bacon Act by misclassifying six workers as laborers when they were performing the tasks of carpenters, pipefitters, and other skilled trades at three sites for the U.S. General Services Administration and the U.S. Coast Guard. The affected projects included work at federal court buildings in Brooklyn and Central Islip, as well as at the U.S. Coast Guard training center in Cape May, New Jersey. Additionally, the judge found that the company failed to provide required fringe benefits and did not pay the necessary overtime rates for hours worked over 40 in a week, in violation of the Contract Work Hours and Safety Standards Act.

The case was escalated to the DOL’s solicitor after JRW Service Group refused to pay the owed wages to the workers.

As a consequence of these violations, the order also bars the company and its owner from participating in future federal and federally funded construction projects for a period of three years.

From the perspective of ConstructionOwners.com, this case serves as a critical reminder for construction owners and contractors about the importance of adhering to federal labor regulations, particularly on government-funded projects. Misclassifying workers, as seen in the case of JRW Service Group LLC, can lead to significant financial consequences and reputational damage, underscoring the need for diligent compliance with the Davis-Bacon Act and other federal labor laws.

For construction owners, it is essential to ensure that subcontractors and project managers understand the complexities of classifying workers correctly. In this instance, the company’s failure to recognize the skilled nature of the work being performed led to an underpayment of wages, as well as the omission of required fringe benefits and overtime pay. These oversights not only harm workers but also expose companies to costly penalties, such as the $85,284 in back wages JRW is now mandated to pay.

Beyond the financial impact, construction companies must be aware of the risk of being barred from future federal projects, as JRW Service Group LLC and its owner are now facing a three-year suspension. For many construction owners, participation in government contracts is a crucial part of their business, making compliance with labor standards an operational priority. The loss of access to these projects can severely hinder growth and disrupt business continuity.

To prevent such outcomes, construction owners should consider implementing regular audits of payroll practices, maintaining open communication with labor teams, and staying up-to-date on regulations like the Davis-Bacon Act and the Contract Work Hours and Safety Standards Act. By ensuring that both employees and subcontractors are fairly compensated according to the law, construction owners can safeguard their operations, protect their workforce, and avoid costly legal battles.

This case highlights the importance of strong compliance measures, proactive oversight, and a commitment to ethical labor practices—cornerstones for any construction owner aiming to succeed in the highly regulated federal contracting environment.

News
October 18, 2024

Pennsylvania Contractor Ordered to Pay $85K in Back Wages to Federal Project Workers

Caroline Raffetto
Compliance
Pennsylvania

A Pennsylvania-based federal contractor has been mandated by an administrative law judge to pay $85,284 in back wages for failing to compensate workers appropriately on various federal construction projects, as reported by the U.S. Department of Labor (DOL).

The judge determined that JRW Service Group LLC and its owner, Jason Winters, violated the Davis-Bacon Act by misclassifying six workers as laborers when they were performing the tasks of carpenters, pipefitters, and other skilled trades at three sites for the U.S. General Services Administration and the U.S. Coast Guard. The affected projects included work at federal court buildings in Brooklyn and Central Islip, as well as at the U.S. Coast Guard training center in Cape May, New Jersey. Additionally, the judge found that the company failed to provide required fringe benefits and did not pay the necessary overtime rates for hours worked over 40 in a week, in violation of the Contract Work Hours and Safety Standards Act.

The case was escalated to the DOL’s solicitor after JRW Service Group refused to pay the owed wages to the workers.

As a consequence of these violations, the order also bars the company and its owner from participating in future federal and federally funded construction projects for a period of three years.

From the perspective of ConstructionOwners.com, this case serves as a critical reminder for construction owners and contractors about the importance of adhering to federal labor regulations, particularly on government-funded projects. Misclassifying workers, as seen in the case of JRW Service Group LLC, can lead to significant financial consequences and reputational damage, underscoring the need for diligent compliance with the Davis-Bacon Act and other federal labor laws.

For construction owners, it is essential to ensure that subcontractors and project managers understand the complexities of classifying workers correctly. In this instance, the company’s failure to recognize the skilled nature of the work being performed led to an underpayment of wages, as well as the omission of required fringe benefits and overtime pay. These oversights not only harm workers but also expose companies to costly penalties, such as the $85,284 in back wages JRW is now mandated to pay.

Beyond the financial impact, construction companies must be aware of the risk of being barred from future federal projects, as JRW Service Group LLC and its owner are now facing a three-year suspension. For many construction owners, participation in government contracts is a crucial part of their business, making compliance with labor standards an operational priority. The loss of access to these projects can severely hinder growth and disrupt business continuity.

To prevent such outcomes, construction owners should consider implementing regular audits of payroll practices, maintaining open communication with labor teams, and staying up-to-date on regulations like the Davis-Bacon Act and the Contract Work Hours and Safety Standards Act. By ensuring that both employees and subcontractors are fairly compensated according to the law, construction owners can safeguard their operations, protect their workforce, and avoid costly legal battles.

This case highlights the importance of strong compliance measures, proactive oversight, and a commitment to ethical labor practices—cornerstones for any construction owner aiming to succeed in the highly regulated federal contracting environment.