Unpaid Wages Settlement Tops $4.8M for NJ County and Contractor

A county in New Jersey and the contractor it hired to run an immigration detention facility have been ordered to pay nearly $5 million in an unpaid wages settlement.

Essex County in New Jersey and contractor, Community Education Center, have been accused of paying 122 employees just one-third of what they should have been paid according to the government.

Judge Stephen R. Henley signed off on the unpaid wages settlement recently that settled claims that corrections officers were misclassified in order to avoid paying them an hourly rate of $30.97.

Even though the judge agreed to the unpaid wages settlement, neither the county or the contractor admitted wrongdoing.

In a statement, Wage and Hour Division Administrator David Weil said, “Enforcement of the prevailing wage laws levels the playing field for all contractors and protects the wages of hard-working, middle-class American workers.”

He went on to say, “The Wage and Hour Division will remain vigilant in its enforcement to ensure employees are paid in accordance with prevailing wage laws.”

According to the Labor Department, five years ago, New Jersey’s Essex County garnered a $130 million contract from the United States Department of Homeland Security.

This contract was to provide funding to to run an immigrant detention center at Delaney Hall Center in Newark, New Jersey.

The county contracted the work out to Education and Health Centers of America Inc. This contractor, in turn, subcontracted the work to Community Education Center. 

It was discovered that 122 employees who should have been classified as corrections officers were misclassified as operations counselors. Instead of earning their federally mandated wage of almost $31 per hour, they were earning $11.29 per hour.

The contractor and the county were operating under a now defunct collective bargaining agreement. The National Labor Relations Board had invalidated this agreement in 2013, however the county and contractor were still paying their employees as such.

In addition to the lost wages, the unpaid wages settlement will also provide for an average of $4 per hour in benefits the workers were not paid.

This unpaid wages settlement includes a little over $4 million in benefits payments and back pay as well as $740,000 in overtime payments to 166 workers.

Essex County and Community Education Center are being held accountable for their actions by the Department of Labor, who filed suit with the Office of Administrative Law Judges.

The lawsuit on which the unpaid wages settlement is based claims that the two defendants violated the Contract Work Hours and Safety Standards Act. This allows for federally contracted laborers to be paid one-and-one-half times their usual pay for any time worked over 40 hours.

Allegedly, the Service Contract Act was also violated. This sets minimum wages for some worker classifications.

The nearly $5 million is being withheld from contract payments.

The settled Unpaid Wages Lawsuit is In the Matter of Community Education Centers Inc. and Essex County, New Jersey, Case No. 2016-SCA-00019, in the Office of Administrative Law Judges.

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