Federal prosecutors announced Monday that a Washington, D.C., construction and cleaning firm has agreed to pay at least $450,000 to settle a case in which it was accused by whistleblowers of not paying its workers legally required wages while they were working at the National Institutes of Health in Bethesda.
Paige Industrial Services agreed to pay between $450,000 and $675,000, depending on the financial performance of the company over the next five years, to settle the case, although the company denies the allegations, according to prosecutors.
The settlement stemmed out of a larger case in which multiple construction firms were accused by electricians and other employees of underpaying their workers, but then telling the federal government they were adhering to prevailing wage requirements as required by their federal contracts.
In many cases, the workers accused the companies of paying $10 or more less than the prevailing hourly wage for certain working classes such as journeymen and apprentice electricians, according to the federal complaint filed in U.S. District Court in Greenbelt. Workers also accused Paige of classifying certain jobs at a lower level than what they should have been in order to pay lower wages—such as classifying workers who hung and finished drywall as laborers, which enabled the company to pay them $10.35 an hour rather than the prevailing wage as finishers, which would have been $14 per hour.
The underpaying of workers allegedly took place from 2007 to 2010, according to the complaint. Prosecutors wrote that NIH previously had an employee who regularly performed onsite wage payment confirmation, but that position was eliminated several years ago and no one was on site to verify workers were being paid properly. As a result, prosecutors alleged some companies were taking advantage of workers who were not fluent in English and did not have knowledge of their legal rights, according to the complaint.
Prosecutors wrote in the complaint that workers believed Paige was able to underbid for contracts “because its scheme was to illegally under cut its competition” by not paying prevailing wages, although it was required under contracts to do so.
In a related case, a Paige subcontractor pleaded guilty this month to hiring undocumented workers and not paying payroll taxes on their wages from January 2010 to June 2013 while servicing a demolition contract at NIH. In that case, Luis Valle, owner of Valle Services in Silver Spring, pleaded guilty to violating federal employment law by hiring at least 19 undocumented workers to clean up after demolition projects at NIH.
Prosecutors said Valle would pay his employees with handwritten checks and not withhold payroll taxes.
Valle admitted to failing to pay at least $54,641 in payroll taxes and, as part of his plea agreement, agreed to pay $57,000 in fines. Valle was also sentenced Feb. 11 to three years’ probation and agreed to not employ any unauthorized aliens in the future.
