Federal contractors “have a legal obligation to follow the letter of the law, especially when it comes to paying their workers,” David Weil, head of the Labor Department’s Wage and Hour Division, said in a statement Tuesday. “Workers in the restaurant industry are among the lowest-paid workers in our economy. Most struggle to afford life’s basic expenses and pay their bills; they shouldn’t have to deal with paychecks that don’t accurately reflect their hard work and the wages to which they are legally entitled.”
The ruling announced Tuesday comes after more than a year of controversy over the Senate workers’ pay, which was tied up in a hard-fought contract negotiation and a union organizing drive. The workers won a raise when a new contract was finalized in December, but earlier this year Capitol officials said that dozens of workers had not gotten the pay raises they were entitled to.
The Labor Department probe found that many more workers were affected: Restaurant Associates and subcontractor Personnel Plus will pay 674 employees $1,008,302 in back wages — an average of about $1,500 per worker.
Sam Souccar, a Restaurant Associates executive, said in a statement that the company has “worked diligently” with the Labor Department to resolve the wage concern and cited “administrative technicalities related to our associates’ evolving day-to-day work responsibilities” for the misclassifications.
“Restaurant Associates has corrected the classifications and will compensate all impacted associates,” Souccar said. “We are 100 percent committed to ensuring classifications are accurate going forward and have implemented enhanced monitoring and training at the U.S. Senate and in all accounts where the [Service Contract Act] applies.”
There could be further consequences for the contractor: The Labor Department release said it is reviewing the findings and could seek to bar Restaurant Associates and its subcontractor from winning future federal contracts.
The $1 million payout was hailed by Good Jobs Nation, a labor-backed coalition that has pushed for new rules for federal contract employers and has highlighted the Senate workers’ plight as a part of that effort.
Joseph Geevarghese, the coalition’s director, said the Capitol abuses are “just the tip of the iceberg.”
“If federal contractors feel free to break federal law right under the noses of lawmakers, they probably feel free to violate the rights of workers all across America,” he said. “While the Labor Department should be commended for acting quickly to remedy wage theft at the U.S. Capitol and Senate, the truth is that the agency does not have enough resources to investigate every federal contractor in the U.S.”
Better, he said, for the government to adopt a policy of contracting with employers that pay good wages and recognize workers’ right to form a union.