Employer Liability for Wage Violations of Subcontractors

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Employer Liability for Wage Violations of Subcontractors

Employers can sometimes be held liable when their contractors or subcontractors violate minimum and prevailing wage laws.

For example, in New York and California, garment manufacturers are liable for minimum wage violations by contractors and subcontractors. These laws were passed because these violations were particularly common and it was widespread practice for companies to use "fly-by-night" contractors.

In states that have "prevailing wage" laws, employers are often responsible for ensuring that subcontractors follow this law. Prevailing wage laws require contractors in public works projects to pay the standard market wage for a particular type of work.

Federal Contracts

Under the Davis-Bacon and Related Acts, contractors and subcontractors are required to pay their laborers and mechanics a wage that is the same as the current market rate, and provide fringe benefits that are similar to those given to employees who perform similar work in a comparable area.

If employees work more than 40 hours in a work week on contracts that total in excess of $100,000, contractors and subcontractors must pay laborers, mechanics, guards, and watchmen one and a half times their usual rate of pay for all hours worked over 40 hours.

Fair Labor Standards Act

According to the Fair Labor Standards Act (FLSA), employers must be held liable for unpaid wages, even when their contractors or subcontractors are committing wage violations.

The FLSA limits the number of hours that children under age 16 can work and prohibits employers from hiring children under age 18 to work in jobs that are considered hazardous. Additionally, the FLSA does not allow children under 16 to perform dangerous tasks and employers may not hire children under 16 for work during school hours.

Recordkeeping Requirements

An employer who is required to comply with the FLSA should maintain accurate records about the number of hours that each employee works as well as the wages earned.

Should I Consult an Attorney?

If you or someone you know has suffered a wage violation as a subcontractor, you should consult an employment law attorney.

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Last Modified: 11-25-2014 04:37 PM PST

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