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January 26, 2006
Hurricane Katrina Clean-Up Workers Receive Back Wages

More than 100 Hurricane Katrina clean-up workers will receive $141,887 in back wages the U.S. Labor Department recovered after accusing a contractor of failing to pay prevailing wages and overtime compensation.

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North Carolina-based KTC Services had a subcontract at the Naval Construction Battalion Center in Gulfport, Mississippi, to clean up debris caused by Hurricane Katrina. The department says the contract was subject to requirements of federal contracting statutes. The department's Wage and Hour Division investigators alleged that the company violated those rules by failing to pay prevailing wage rates, prevailing fringe benefits, and overtime compensation.

"As the Gulf Coast rebuilds, we want to make sure that workers receive the pay they deserve and aren't taken advantage of," says Secretary of Labor Elaine L. Chao. "Our wage laws protect all workers, and we have investigative teams on the ground ensuring that those who contribute their labor to the hurricane recovery effort are paid in accordance with these laws."

Under the Service Contract Act, contractors and subcontractors with federal service contracts over $2,500 must pay their service workers no less than the wages and fringe benefits prevailing in the locality. Contractors in non-compliance may have their contract payments withheld until all workers are paid the prevailing wages and fringe benefits. The Contract Work Hours Safety Standards Act requires that workers employed on certain federally funded contracts be paid one-and-one-half times the local prevailing wage rate for all hours worked over 40 in a single workweek.

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