Federal Contractor to Pay Back Wages

The U.S. Department of Labor finds manufacturer violated federal wage requirement.

General Atomics Aeronautical Systems, Inc., a company that produces U.S. Air Force drones and high resolution surveillance systems, was found to have violated the McNamara-O’Hara Service Contract Act (SCA), which requires government contractors to pay workers the prevailing wage rates and fringe benefits in their locality.

Instead of applying the prevailing wage rates based on the area where they worked, General Atomics paid employees working at remote job sites the wage rates for the area where they lived. The required wages at a number of remote job sites happened to be higher than those the workers were actually paid.

Final Outcome

General Atomics has agreed to pay six years’ worth of back wages to affected employees and upgraded their time-keeping system to ensure employees are paid the correct wages depending on the location of their job site.

David Weil, administrator of the U. S. Department of Labor’s Wage and Hour Division said:

“Failing to pay the correct prevailing wages hurts workers, and it also negatively affects other contractors who pay proper wages. We appreciate that General Atomics was cooperative throughout the investigation and immediately came into compliance. They also ensured that all employees working on their contracts were paid back wages once the issues were brought to their attention.”

The McNamara-O’Hara Service Contract Act (SCA)

The SCA

‘requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates contained in a predecessor contractor’s collective bargaining agreement.’