U.S. Labor Department secures more than $1.5 million in back wages for Hurricanes Katrina and Rita workers

Press Release

Ceres Environmental Services Inc., headquartered in Minneapolis, Minn., has agreed to pay $1,500,718 in back wages to 2,256 former debris removal workers. An investigation by the U.S. Department of Labor's Wage and Hour Division found that these workers were not properly paid for work they performed throughout Louisiana in the wake of Hurricanes Katrina and Rita as required by the Service Contract Act (SCA) and the Contract Work Hours Safety Standards Act (CWHSSA). The workers were employed by 266 subcontractors of Ceres.

"As a result of the department's investigation, we are securing more than $1.5 million in back wages for these workers whose efforts were vital to the Gulf Coast's recovery from Hurricanes Katrina and Rita," said U.S. Secretary of Labor Elaine L. Chao.

The U.S. Army Corps of Engineers contracted with Ceres Environmental Services to perform debris removal in the aftermath of Hurricanes Katrina and Rita. The company failed to ensure that contracted workers were paid proper prevailing wages, fringe benefits and overtime. The Wage and Hour Division's New Orleans District Office also determined that from Nov. 16, 2005, to July 28, 2007, workers were paid straight time for overtime hours worked on federal contract jobs.

Under the SCA, contractors and subcontractors performing on federal service contracts in excess of $2,500 must pay their service workers no less than the wages and fringe benefits prevailing in the locality.

The CWHSSA requires the payment of time and one-half the basic rate of pay for all hours worked beyond 40 in a workweek. Federal contractors must ensure that their subcontractors are fully informed of requirements under federal government labor laws. Those who fail to properly compensate their workers are subject to federal withholding contract clauses that allow the government to withhold payments until all workers are paid the prevailing wages and fringe benefits.

For information about federal government contract laws, call the Department of Labor's toll-free helpline at 866-4US-WAGE (487-9243) or contact the Wage and Hour Division's New Orleans office at 504-589-6171.

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