A company that provided services on distressed loans insured by the government has agreed to settle charges it didn’t provide adequate compensation to contract employees.
Contractors and subcontractors on prime government contracts that are more than $2,500 are subject to
McNamara-O’Hara Service Contract Act.
The law requires the contractors to
pay service employees in different classes no less than prevailing wage rates and fringe benefits for the area or the rate contained in a predecessor contractor’s collective bargaining agreement.
The intention of the act is to benefit local economies by preventing underbidding by contractors from other areas
who might otherwise be able to recruit and bring in less expensive labor.
But Deval LLC didn’t follow the law, according to a statement from the Department of Labor.
Deval has a contract with the Department of Housing and Urban Development to provide loan modifications, loss mitigation and assistance in foreclosure procedures primarily for HUD.
The Labor Department’s
Wage and Hour Division opened an investigation into Deval and reportedly found that it broke the law by not providing permanent and temporary employees hired though staffing agencies with health benefits, welfare benefits or holidays.
Deval agree to settle the allegations with the Labor Department.
As part of the settlement, it will pay 58 employees
$253,072 in fringe benefits and $35,593 in prevailing wages.
In addition, Deval
has agreed to abide by the law in the future.