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Minimum Wage And Overtime Traps For Contractors

Drivers for a D.C.-area Medicaid contractor filed a federal lawsuit seeking class action status to proceed against an employer for failing to pay minimum wage and overtime.

The employer, a private medical transportation organization, works with subcontractors to carry out its contract with D.C. to provide non-emergency medical transportation for Medicaid patients. However, the employer is responsible for making sure all workers are paid in accordance with federal and local wage and hour laws.

The lawsuit contains allegations that drivers regularly worked more than 60 hours per week in shifts from 5:00 a.m. until 8:00 p.m., six days a week, without rest or lunch breaks. Workers allegedly received salaries of $325 to $475 per week—around $3.61 per hour—amounts well below D.C. and federal minimum wage requirements.

The lawsuit further alleges that the employer did not pay legally mandated overtime and failed to act when drivers raised wage and hour concerns. In fact, the employer terminated one driver who repeatedly requested to be paid for all hours worked. "D.C. Medicaid Contractor Accused of Paying Employees as Little as $3.61/Hour in Federal Suit Filed by Cohen Milstein and Public Citizen," www.businesswire.com (Jul. 13, 2017).


Commentary

The Fair Labor Standards Act (FLSA) requires employers to pay employees at least the federal minimum wage, as well as overtime of time-and-a-half the normal wage rate for hours worked over 40 per week. Many states and cities have minimum wage rates higher than the current federal minimum wage of $7.25 per hour. In such cases, employers must pay the higher wage amount.

The Davis-Bacon Act further requires contractors working with the federal government to pay no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area. Such contractors are legally responsible for making sure any subcontractors pay workers the required wage.

Government agencies that utilize contractors, federal, state, or local, must make clear in writing the obligation of the contractor to follow wage and hour regulations, including local living wage statutes. Living wage statutes require employers to pay more than the minimum wage.

Be sure to consult with your legal counsel to remain in compliance with all wage and hour laws.

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