The U.S. Department of Labor has filed suit before an administrative law judge
against S3 LTD and owner William Casanova for alleged violations of the McNamara-O'Hara
Service Contract Act. The administrative complaint seeks to recover $1,976,571
in fringe benefits for 1,451 workers and to prevent the company and William
Casanova from obtaining federal contracts for a period of three years.
The legal action follows an investigation conducted by the U.S. Labor Department's
Wage and Hour Division, which concluded that the company failed to pay service
employees the fringe benefits required by the contract and federal law, including
severance pay, vacation pay, paid sick leave and health and life insurance.
S3, with offices in Virginia Beach, Va. and California, had a contract with
the U.S. Fleet and Industrial Supply Center to provide logistical, material
and support services to United States military installations and other federal
agencies on the East and West Coasts in October 1997.
The McNamara-O'Hara Service Contract Act covers contracts entered into by federal
agencies where the principal purpose of the contract is to furnish services
in the United States through the use of "service employees." It requires
that every federal service contract in excess of $2,500 contain a wage determination
reflecting wages and fringe benefits prevailing in the locality or contained
in the collective bargaining agreement of the predecessor contractor.