UPDATE: Circle C’s contract was actually with the Army in this case…
An interesting ruling out of the Sixth Circuit of the U.S. Court of Appeals will allow workers being cheated out of prevailing wages to go after back wages via the False Claims Act (FCA).
While the Davis-Bacon act ensures prevailing wages are paid on federally funded projects, it does not give workers recourse for collecting them in the event they are unfairly cheated out of them. Now, workers can use the FCA to go after all-too-commonplace underpayments. Employment attorney Michael E. Barnsback explained the rulings to the Sacramento Bee.
This ruling underscores the need for government contractors everywhere to do all they can to ensure that they—and their subcontractors—are in full compliance with all guidelines on prevailing wages for federal construction projects, as required by the Davis-Bacon Act,” advised Barnsback, an Alexandria, Va.-based partner in the national law firm, who was not involved with this particular case.
“Fortunately, the court in this case gave some clear guidance on what contractors need to do to steer clear of FCA violations.” Under the Davis-Bacon Act, federal contractors are required to pay set wages for various job classifications established by the U.S. Department of Labor. “The prime contractor has to submit payroll certifications each week, stating that all of the laborers were paid the proper wages and hours,” Barnsback explained.
“Prior to this ruling, failure to pay the amount established by the wage determination had widely been considered the exclusive jurisdiction of the Department of Labor. The argument made was that only DOL could sort out details such as whether a worker should be classified as, say, a ‘general laborer’ or a ‘concrete/cement laborer’ and determine the amount each should be paid. But as the court saw it, submitting false payroll certifications falls outside of classification issues and is properly considered by the courts under the FCA.”
The ruling was in the case of U.S. ex rel. Brian Wall v. Circle C Construction LLC in which a subcontractor paid nine electricians $16/hour while the prime contractor reported to the government that workers were receiving the correct wage of $19/hour. Paperwork made its way through the ranks without being checked, eventually being turned into the DOL. Barnsback said that the case should act as a warning to other contractors.
“The prime contractor just handed the wage-designation sheet to his sub without any further discussion,” Barnsback related. “Then, when the certifications finally came in from the sub, the prime contractor did nothing to verify them. He just passed them on to the government. But, the prime contractor remains ultimately responsible for the certifications.”
According to Brownsback, the FCA has been enforced on a much larger scale under the Obama Administration.