Wage Theft at Capital Bikeshare?

stopwagetheftLast week, the Washington Post reported “Capital Bikeshare possibly underpaid workers, ex-employee alleges.” Although Capital Bikeshare is a contractor with the Federal and District government and therefore likely subject to higher minimum wage as well as minimum fringe benefits requirements, Mike Debonis reported that at least one worker says they are not paying those prevailing wages or fringe benefits.

The EJC’s Advocacy Manager, Ari Weisbard, was quoted in the article explaining that many of those working for federal and District contractors are not aware of the prevailing-wage requirements set out in the 1965 Service Contract Act, but that those requirements are “important to ensure that federal government and taxpayer dollars are used to create quality jobs rather than bargaining rates down to where workers can barely get by.”

The Service Contract Act is a federal law requiring some federal and District contractors to pay employees prevailing wages, set out in an official “wage determination,” equivalent to the median pay for that occupation in that particular locality. With a few exceptions, any employer with a contract over $2,500 with the federal or D.C. government must pay the prevailing wages and benefits to employees working on that public contract.

The U.S. Department of Labor (DOL) has created dozens of job classifications – such as desk clerks, forklift operators, and, yes, bicycle repairers ­– and used Bureau of Labor Statistics salary data to set the corresponding wages for those jobs, so employers know what they must pay to comply with the Act. When a job does not clearly fall under an existing classification, an employer can request a wage determination, or it can place the employee in a classification that reasonably resembles the necessary skills and activities of the employee’s job. The employer must then pay the prevailing wage identified, as well as mandatory fringe benefits equal to $3.35 an hour in this case.

Capital Bikeshare’s parent company, Alta’s 2010 contract with the District and federal govenments certainly was worth more than $2,500 and indeed does contain the provision requiring it to pay prevailing wage and benefit rates:

“H.2   DEPARTMENT OF LABOR WAGE DETERMINATION

The Contractor shall be bound by the Wage Determination 05-2103 (Rev.-8) posted on www.wdol.gov on 06/02/2009, issued by the U.S. Department of Labor in accordance with the Service Contract Act (41 U.S.C. 351 et seq.) and incorporated herin as Section J.1.4 of this solicitation. The Contractor shall be bound by the wage rates for the term of the contract. If an option is exercised, the Contractor shall be bound by the applicable wage rate at the time of the option. If the option is exercised and the Contracting Officer obtains a revised wage determination, the revised wage determination is applicable for the option periods and the Contractor may be entitled to an equitable adjustment.”

So if Capital Bikeshare is breaking the law, why isn’t it being sued by its employees? Unfortunately, the Service Contract Act does not provide a private right of action. So, unlike in most employment situations, employees who have not been paid prevailing wages and benefits under the Act are unable to file a lawsuit in court. Instead, only the contracting agency or the U.S. Department of Labor can undertake an investigation and enforce these protections. The DOL can begin investigating Service Contract Act violations up to six years after they occur. Once a violation is found, the DOL can order that violating employers directly pay employees owed prevailing wages, and can prohibit employers from obtaining public contracts for three years.