Provisions of the American Recovery and Reinvestment Act of 2009 require that companies adhere to prevailing wage standards for workers of construction projects receiving recovery funds under that Act. Those obligations remain, and we have noticed an uptick in enforcement actions from the Department of Labor.

The Department of Labor has the authority to conduct site inspections and interviews for potential wage and hour violations with little or no notice to employers. However, the Department of Labor historically opened such investigations as a consequence of a specific employee complaint – often submitted anonymously – to a field office. Those days at the Department of Labor are now gone.

A Senior Investigation Advisor with the Department of Labor recently advised us of an impending two-year program that will involve proactive initiation of investigations into prevailing wage obligations even before complaints of violations may be received by office. The criteria for what targets will be identified is not yet known with precision. However, we have been advised that significant resources have been devoted to the program, all five regions of the Department of Labor are committed to it, and no project is too big or too small to warrant scrutiny. Consequently, we recommend all clients be vigilant in compliance with their obligations under the Wage and Hour laws.

Baker Donelson’s Employment Group has a wealth of experience in responding to requests for information and defending investigations into the employment practices of its clients. We take a proactive role with clients in instituting preventative measures that help ensure compliance by prime contractors and subcontractors alike. Those methods include review of policies and procedures, creation and presentation of training to workers, and appropriate contract review to ensure that the risk for such violations is mitigated as much as possible.