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California Overtime Law Catches Up with Contractors to US Military

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West Covina, CAA violation of overtime pay laws in California by three contractors providing services to the US military has resulted in a recovery in excess of $1 million dollars in unpaid overtime. A release from the US Department of Labor's Wage and Hour Division announced the settlement on January 13.

The primary contractor involved, according to the release, is Calnet Inc. The latter, together with subcontractors Acclaim Technical Services and McNeil Technologies, were found to be in violation of overtime laws and the Fair Labor Standards Act (FLSA) by failing to properly compensate their workers for all on-call time.

There were various record-keeping infractions as well.

The overtime pay violations involved a two-year period between October 2008 and October of last year, during which time the three contractors provided language, intelligence and information technology services to the US Army at Fort Irwin, California.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employees must also maintain accurate time and payroll records. On-call time becomes compensable under the FLSA when the on-call conditions are so restrictive or the calls to duty so frequent that the employee cannot effectively use on-call time for personal purposes.

The release from the US Department of Labor noted that Acclaim was required to repay $234,311 to 177 employees, while McNeil Technologies paid $149,545 to 91 employees. The biggest bill was reserved for primary contractor Calnet, which was found to owe $676,698 to 597 employees for unpaid overtime and on-call wages.

"Contractors and subcontractors hired to perform services for the US military have a clear obligation to comply thoroughly and consistently with federal law," said Secretary of Labor Hilda L. Solis. "As we do with all other employers, we will hold these businesses accountable for paying their workers for all hours, including any overtime, spent on the job."

California overtime law works in concert with the FLSA to protect the rights of workers in the Golden State.


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