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Construction Company on a Federally Assisted Project Pays Nearly $2 Million After Labor Department Investigation

Last week, the U.S. Department of Labor announced that it has recovered $1,914,681.50 in back wages and fringe benefits allegedly owed to 147 workers of a Nevada-based company that provided construction services as a subcontractor at the Crescent Dunes Solar Energy Project, a federally supported solar power development located near Tonopah, Nevada.  The DOL investigation found that the construction company had “violated the prevailing wage and fringe benefits requirements of the Davis-Bacon and Related Acts for the majority of their employees working at the Tonopah desert solar energy project.”

The Davis-Bacon and Related Acts (DBRA) generally require contractors and subcontractors working on contracts for construction, alteration, or repair of public buildings and public works, and which involve federal funding, to pay laborers and mechanics “no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area.”  DOL explained in its recent press release that the DBRA’s wage and fringe benefit provisions applied to the Crescent Dunes Solar Energy Project because “its funding includes hundreds of millions of dollars in federal loan guarantees” from the U.S. Department of Energy under the American Recovery and Reinvestment Act of 2009.  The DOL found that the Nevada-based company had violated the DBRA from June 2013 through April 2014 because it did not pay workers the “correct prevailing wage rates and fringe benefits for their particular job duties.”  Specifically, DOL found that the company “paid ‘general laborers’ rates to workers that routinely performed duties in skilled trades, such as ironworking, electrical work, painting or bridge crane operation, that should have commanded fringe benefits and prevailing wages of up to two times more than they were paid.”

As part of its agreement with the DOL, the company has also agreed to raise awareness with other employers working at the Crescent Dunes Solar Energy Project about the DBRA’s prevailing wage requirements.  This recent settlement comes on the heels of similar DOL enforcement actions, and underscores the need for renewable energy developers and their construction subcontractors to understand the wage and fringe benefit obligations that generally apply to federally assisted projects, including power purchase agreements, enhanced use lease projects, grants, and loan guarantees.

© 2019 Covington & Burling LLP


About this Author

Scott Freling, Government Contracts Lawyer,  Covington Law Firm

Scott Freling divides his practice between working with civilian and defense contractors on traditional government contracts matters and representing buyers and sellers, including a number of private equity firms, in complex M&A deals involving a government contractor.

Mr. Freling represents contractors at all stages of the procurement process and in their dealings with federal, state, and local government customers. In addition, he counsels clients on compliance matters and risk mitigation strategies, including obtaining SAFETY Act liability protection for...

Brandon Myers, Covington, Commercial Litigation Attorney

Brandon Myers represents clients in a broad array of high-stakes litigation matters, with particular emphases on advertising disputes, product liability and consumer protection actions.

He also counsels and represents clients in a wide range of employment law matters, in addition to maintaining an active pro bono practice.