US Department of Labor Finds Contractor Violated Wage Laws During Hurricane Recovery in NC


After an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD), an Athens, Georgia-based disaster relief company will pay $184,838 in wages to 18 employees after an investigation found the company violated federal wage and overtime laws while under contract to provide recovery services in several North Carolina locations in the aftermath of Hurricane Florence.

WHD investigators determined MLU Services Inc. violated the Fair Labor Standards Act (FLSA) when it paid some overtime-eligible employees flat salaries without regard to the number of hours that they worked. This practice violated FLSA overtime requirements when those employees worked more than 40 hours in a workweek but were not paid overtime.

WHD also found MLU Services paid quality control inspectors at rates below those required by the McNamara-O’Hara Service Contract Act (SCA) when they performed work on the employer’s contract with the Federal Emergency Management Administration. MLU Services paid the inspectors rates applicable to data entry personnel – rates lower than those required for the work they performed. The employer also failed to pay these employees fringe benefits required under the SCA.

“Employers must meet their obligation to pay their employees the wages they have legally earned,” said Wage and Hour Division District Director Richard Blaylock in Raleigh, North Carolina. “Contractors and subcontractors awarded federal contracts must understand that incorrectly classifying employees can lead to costly violations. The U.S. Department of Labor offers employers a wide variety of tools to help them understand their responsibilities.”

The SCA requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates, including prospective increases, contained in a predecessor contractor’s collective bargaining agreement.

The department offers numerous resources to ensure employers have the tools they need to understand their responsibilities and to comply with federal law, such as online videos, confidential calls or in-person visits to local WHD offices.

For more information about the FLSASCA and other laws enforced by the Wage and Hour Division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at

WHD’s mission is to promote and achieve compliance with labor standards to protect and enhance the welfare of the nation’s workforce. WHD enforces federal minimum wage, overtime pay, recordkeeping and child labor requirements of the Fair Labor Standards Act. WHD also enforces the Migrant and Seasonal Agricultural Worker Protection Act, the Employee Polygraph Protection Act, the Family and Medical Leave Act, wage garnishment provisions of the Consumer Credit Protection Act and a number of employment standards and worker protections as provided in several immigration related statutes. Additionally, WHD administers and enforces the prevailing wage requirements of the Davis Bacon Act and the Service Contract Act and other statutes applicable to Federal contracts for construction and for the provision of goods and services.

The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.