The U.S. Department of Labor has recovered nearly $8 million in back wages, fringe benefits and 401(k) plan assets for more than 2,000 security guards formerly employed by USProtect Corp., a defunct company that provided security services for federal buildings across the country.
The U.S. Bankruptcy Court for the District of Maryland approved a global settlement that allowed the Department to recover the money. The Labor Department had filed suit against the company for violations of the McNamara O'Hara Service Contract Act and the Employee Retirement Income Security Act.
Investigations were conducted by the department's Wage and Hour Division and its Employee Benefits Security Administration when the company could not meet its payroll. Investigators found that the company failed to pay hundreds of employees for their last 2.5 weeks of work, and many employees were not paid the prevailing wage for their geographic areas or fringe benefits. The company also failed to remit employee salary deferral contributions to their 401(k) plan accounts.
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The settlement between the federal government and a bankruptcy trustee allows for a total recovery of $7,968,744, of which $6,951,977 was recovered for the employees' wages and cash fringe benefits. The remaining $1,016,767 was recovered for the employees' 401(k) accounts.
"I am very pleased that former USProtect employees will receive the back wages, fringe benefits and retirement assets they earned and are owed," said Secretary of Labor Hilda L. Solis. "This settlement represents a remarkable recovery for a bankruptcy proceeding and is due to the coordinated effort of the Department of Labor's agencies, Department of Justice attorneys, the bankruptcy trustee and various federal contracting agencies."
The McNamara-O'Hara Service Contract Act requires contractors and subcontractors performing on federal service contracts in excess of $2,500 to pay service employees no less than the wage rates and fringe benefits found prevailing in the locality for the classification of work that they perform.
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