Skip to Highlights
Highlights

THE WAGE UNDERPAYMENTS RESULTED PRIMARILY FROM MISCLASSIFICATION OF EMPLOYEES AND THE OVERTIME VIOLATIONS WERE THE RESULT OF THE FIRM'S PRACTICE OF "BANKING" OVERTIME HOURS WORKED AND PAYING SUCH HOURS OF STRAIGHT-TIME WAGES IN WEEKS WHERE LESS THAN 40 WERE WORKED. WE CONCLUDE THAT DEBARMENT IS NOT APPROPRIATE IN THIS CASE. SINCE THERE IS NOT SUFFICIENT EVIDENCE THAT THE VIOLATIONS WERE ACCOMPANIED BY ANY BAD FAITH OR GROSS CARELESSNESS. DABT43-77-C-0084 YOUR FILE NO: PA-80-40 THIS LETTER IS IN REGARD TO CARLISLE ELECTRIC COMPANY. THE WAGE UNDERPAYMENTS RESULTED PRIMARILY FROM MISCLASSIFICATION OF EMPLOYEES AS UNSKILLED LABORERS WHEN SUCH EMPLOYEES WERE PERFORMING THE WORK OF SKILLED LABORERS.

View Decision

B-206164, AUG 7, 1985, OFFICE OF GENERAL COUNSEL

BIDDERS - DEBARMENT - LABOR STIPULATION VIOLATIONS - DAVIS-BACON ACT WAGE UNDERPAYMENTS - DEBARMENT NOT REQUIRED DIGEST: NONDECISION THE DEPARTMENT OF LABOR DETERMINED THAT CARLISLE ELECTRIC COMPANY, INC., FAILED TO PAY THE APPLICABLE PREVAILING WAGE RATE AS REQUIRED BY THE DAVIS -BACON ACT, AS WELL AS PROPER OVERTIME COMPENSATION. THE WAGE UNDERPAYMENTS RESULTED PRIMARILY FROM MISCLASSIFICATION OF EMPLOYEES AND THE OVERTIME VIOLATIONS WERE THE RESULT OF THE FIRM'S PRACTICE OF "BANKING" OVERTIME HOURS WORKED AND PAYING SUCH HOURS OF STRAIGHT-TIME WAGES IN WEEKS WHERE LESS THAN 40 WERE WORKED. BASED UPON OUR INDEPENDENT REVIEW OF THE RECORD, WE CONCLUDE THAT DEBARMENT IS NOT APPROPRIATE IN THIS CASE, SINCE THERE IS NOT SUFFICIENT EVIDENCE THAT THE VIOLATIONS WERE ACCOMPANIED BY ANY BAD FAITH OR GROSS CARELESSNESS.

MR. SYLVESTER L. GREEN: DIRECTOR, DIVISION OF CONTRACT STANDARDS OPERATIONS U. S. DEPARTMENT OF LABOR 200 CONSTITUTION AVENUE, N.W. ROOM S3518 WASHINGTON, D.C. 20210

SUBJECT: CARLISLE ELECTRIC COMPANY, INC., ALSO D/B/A TRAFFIC CONTROL SYSTEMS, INC. CARLISLE, PENNSYLVANIA CONTRACT NO. DABT43-77-C-0084 YOUR FILE NO: PA-80-40

THIS LETTER IS IN REGARD TO CARLISLE ELECTRIC COMPANY, INC. (CARLISLE), WHICH PERFORMED WORK UNDER CONTRACT DABT43-77-C-0084 WITH THE DEPARTMENT OF THE ARMY TO REPLACE THE STREET LIGHT SYSTEM AT THE CARLISLE BARRACKS, CUMBERLAND, COUNTY, PENNSYLVANIA. YOUR DEPARTMENT DETERMINED THAT CARLISLE FAILED TO PAY THE APPLICABLE PREVAILING WAGE RATE AS REQUIRED BY THE DAVIS-BACON ACT, AS WELL AS THE PROPER OVERTIME COMPENSATION. THE WAGE UNDERPAYMENTS RESULTED PRIMARILY FROM MISCLASSIFICATION OF EMPLOYEES AS UNSKILLED LABORERS WHEN SUCH EMPLOYEES WERE PERFORMING THE WORK OF SKILLED LABORERS, ELECTRICIANS, POWER EQUIPMENT OPERATORS AND TRUCK DRIVERS. THE OVERTIME VIOLATIONS WERE THE RESULT OF THE FIRM'S PRACTICE OF "BANKING" OVERTIME HOURS WORKED AND PAYING SUCH HOURS AT STRAIGHT TIME WAGES IN WEEKS WHEN LESS THAN 40 HOURS WERE WORKED.

CARLISLE REFUSED TO MAKE RESTITUTION AND REQUESTED A HEARING BEFORE AN ADMINISTRATIVE LAW JUDGE AS PROVIDED BY 29 C.F.R. SEC. 5.11(B) (1984). DURING THE COURSE OF THE HEARING, YOUR DEPARTMENT REACHED AN AGREEMENT WITH CARLISLE CONCERNING THE ALLEGED WAGE UNDERPAYMENTS. THE AGREEMENT PROVIDED FOR THE PAYMENT OF MONEY, WHICH THE DEPARTMENT OF THE ARMY HAD WITHHELD FROM CARLISLE, TO FORMER EMPLOYEES WHO WERE ALLEGEDLY UNDERPAID.

WE CONCLUDE THAT THE RECORD DOES NOT CONTAIN SUFFICIENT EVIDENCE OF WILLFUL VIOLATION OF THE LABOR STANDARDS PROVISIONS TO WARRANT DEBARMENT. IN B-3368, MARCH 19, 1957, WE DISTINGUISHED BETWEEN "TECHNICAL VIOLATIONS" WHICH RESULT FROM INADVERTENCE OR LEGITIMATE DISAGREEMENT CONCERNING CLASSIFICATION, AND, ON THE OTHER HAND, "SUBSTANTIAL VIOLATIONS," THE INTENTIONAL NATURE OF WHICH IS DEMONSTRATED BY BAD FAITH OR GROSS CARELESSNESS IN OBSERVING OBLIGATIONS TO EMPLOYEES WITH RESPECT TO THE MINIMUM WAGE PROVISIONS. THERE IS NOT SUFFICIENT EVIDENCE TO ESTABLISH THAT CARLISLE'S MISCLASSIFICATION OF EMPLOYEES AND POLICY OF "BANKING" OVERTIME WAS ACCOMPANIED BY ANY BAD FAITH OR GROSS CARELESSNESS.

BECAUSE OF THE INSUFFICIENT EVIDENCE INDICATING BAD FAITH, THE CONSENT AGREEMENT BETWEEN CARLISLE AND DOL, AND THE LONG DELAY INVOLVED HERE (THE INVESTIGATION WAS CONDUCTED IN 1979 AND NOTICE OF POSSIBLE VIOLATION WAS GIVEN IN 1981), WE CONCLUDE THAT DEBARMENT IS NOT WARRANTED IN THIS CASE.

FURTHERMORE, WE FIND NO REASON TO OBJECT TO THE PAYMENT OF THE WORKERS INVOLVED, AND THE AMOUNT FORWARDED BY THE DEPARTMENT OF THE ARMY WILL BE DISBURSED IN ACCORDANCE WITH THE AGREEMENT BETWEEN CARLISLE AND THE DOL.

TO: GROUP DIRECTOR, GGD - CLAIMS GROUP

SUBJECT: CARLISLE ELECTRIC COMPANY, INC., D/B/A TRAFFIC CONTROL SYSTEMS, INC. (A DAVIS-BACON ACT CASE) - B-206164-O.M.

RETURNED HEREWITH IS YOUR FILE Z-2854069, TOGETHER WITH A COPY OF OUR LETTER OF TODAY, B-206164. WE HAVE REVIEWED THE RECORD IN THIS MATTER. WE FIND NO REASON TO OBJECT TO THE PAYMENT OF THE WORKERS INVOLVED, ESPECIALLY SINCE THERE IS A CONSENT AGREEMENT BETWEEN THE CONTRACTOR AND THE DEPARTMENT OF LABOR TO PAY THE WORKERS THE FUNDS WITHHELD PURSUANT TO THE DAVIS-BACON ACT. ACCORDINGLY, THE FUNDS ON DEPOSIT WITH YOUR OFFICE MAY BE DISBURSED IN ACCORDANCE WITH ESTABLISHED PROCEDURES. THE DEPARTMENT OF LABOR SHOULD BE NOTIFIED WHEN PAYMENT OF THE FUNDS HAS BEEN MADE.

FURTHERMORE, IN ACCORDANCE WITH THE ATTACHED LETTER, WE HAVE DECIDED THAT DEBARMENT IS NOT WARRANTED IN THIS CASE.

GAO Contacts