Federal contract workers lose millions to bureaucratic errors, says GAO

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Federal contract service workers have lost hundreds of millions of dollars in wages and benefits and stand to lose more through bureaucratic fumbling.

A new report from the government’s top watchdog says poor communication between agencies, poor case tracking and misuse of enforcement tools could result in workers being misled on federal projects with even greater risk. compensation due under the Service Contracts Act (SCA).

“These challenges impede its ability to effectively and effectively enforce SCA, increasing the risk that workers will not receive the pay and benefits to which they are entitled,” the Government Accountability Office told a Senate Budget Committee hearing. at the beginning of the month.

The Department of Labor enforces the law, but individual agencies oversee the work of contractors and their businesses. By law, most federal contracting companies are required to pay service employees — including security guards, food workers, and maintenance staff — at least wage rates and benefits. social regulations in force locally.

When Labor investigated more than 5,000 service contract cases from 2014 to 2019, the GAO said the department found violations in 68% of cases – “primarily wage and benefit protection”.

Investigators say this led to “employers across a range of service industries” agreeing to pay $224 million in back wages. The GAO hasn’t calculated how many companies are included in that figure, but Thomas Costa, the agency’s director of education, labor, and income security, said via email. mail that the Labor Wage and Hour Division “has identified just over 102,000 benefit violations and nearly 85,000 prevailing wages.” violations committed by 2,320 employers and just over 127,000 workers” during this period. Although 2,320 employers committed violations, some of them may not have reimbursed wages due to bankruptcy or other reasons.

There may be other unknown breaches among the $720 billion in 2014-2019 federal service contracts due to various bureaucratic weaknesses. For example, the GAO said that because Labor “did not analyze its use of enforcement tools”, it “may have lacked a full picture of the effectiveness of these enforcement strategies. “.

The ministry is also struggling to enforce the service contract law due to basic communication issues.

Work “Officials have told GAO that poor communication with contracting agencies — particularly with the United States Postal Service (USPS) — can affect and delay business, although USPS officials told GAO they were not aware of any communication gaps,” Costa said in testimony before the Senate Budget Committee. . “Without resolving communication issues between” the agencies, he added, “Labour’s enforcement of the SCA could be weakened.”

Last month, Labor and the Postal Service developed a draft memorandum of understanding to increase their collaboration and compliance with the law. But the interaction between the two agencies is apparently so bad that the GAO said they couldn’t finalize the deal. “because of communication problems.”

A statement from the Department of Labor said the work is implementing GAO recommendations to improve monitoring and information sharing. Labor officials pledged to enforce the law, the statement added, “using effective enforcement tools, such as exclusion, where appropriate.” The USPS had no comment.

Miscommunication can lead to an agency hiring a contractor company without being aware of the pay and benefits issues they have had with another agency or even if the company has already been banned from government work. .

The work “did not have a process that consistently or reliably notifies contracting agencies of employer violations of the SCA,” the GAO found. “Without enhanced information sharing…an agency may award a contract to an employer without knowledge or consideration of their past violations of the SCA.”

Sometimes the problem with inter-agency communication was that there was none.

The GAO said some agencies, including the Departments of Defense and Veterans Affairs, as well as the USPS, “failed or took months to provide … requested documents or respond to communications.” Officials from the three agencies did not comment.

Budget Committee Chairman Sen. Bernie Sanders (I-Vt.) said he called the hearing because “there are hundreds of companies in America that get federal contracts, d ‘huge subsidies, special tax breaks and all sorts of social assistance despite the fact that these same companies have engaged in widespread illegal behavior – including massive violations of labor laws.

His motivating question: “Should federal taxpayers’ money go to companies that violate labor laws and illegally prevent workers from exercising their constitutional rights to form a union?”

But he focused on one business.

Sanders used the session as a platform to speak out against Amazon, which he said in an opening statement is illegally “engaging in massive union busting.”

“And that’s not all,” he continued, “Amazon has already been penalized more than $75 million for violating federal discrimination and labor laws.” (Amazon founder Jeff Bezos owns The Washington Post.)

In response to Sanders, a statement from Amazon said “our employees have a choice whether or not to join a union. They always have. As a company, we don’t believe unions are the best response for our employees. Our goal remains to work directly with our team to continue to make Amazon a great place to work. Amazon did not respond to Sanders’ comment regarding the $75 million in penalties.

“No government — not the federal government, not the state government, not the city government,” Sanders said, “should be handing out corporate welfare to union busters and labor law violators. “.


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