Defense contractor General Dynamics Corp. (General Dynamics) is set to settle a wage investigation and pay workers $1.4M in damages.
The workers in question were thirty-six Mexican engineers employed in San Diego by a subsidiary of the defense contract titan General Dynamics. General Dynamics employs over 100,000 people worldwide and has an estimated annual revenue (2023) of $42.3 billion.
It was alleged that the employees were, in fact, paid in Mexican pesos at a rate equivalent to a salary well below the minimum wage, which is a breach of the Fair Labor Standards Act.
National Steel and Shipbuilding Co. (NASSCO) the subsidiary of General Dynamics, was found to have tapped into the labor market via the L-1B visa program to port over the workers to a naval shipyard in San Diego from another General Dynamics subsidiary in Mexicali, Mexico.
NASSCO operates facilities in Norfolk, Virginia, Bremerton, Washington, and Mayport in Jacksonville, Florida.
The shipyard was part of three operated by the Marine Systems group, and the workers were tasked with installing power plants, engines, and machinery. They would also complete structures and finish and furnish interiors for the U.S. Navy auxiliary and support ships.
Defense Contractor pays $1.4M in damages to workers
The Wage and Hour Division closely monitored the operation as part of a Labor Department investigation. District Director Min Park-Chung said, “General Dynamics NASSCO brought these specialized workers from Mexico to San Diego to build vessels for the U.S. Navy but failed to follow the federal wage regulations that protect anyone working in the U.S.”
They found that NASSCO reimbursed engineers in “pesos at Mexican pay rates to work an average of 42 hours or more weekly. They also determined the employer wrongfully treated the traveling workers’ per diem and lodging costs as wages and did not maintain accurate time records for them. Investigators found that NASSCO owed the 36 engineers $719,135 in unpaid minimum and overtime wages, plus an equal amount in liquidated damages.”
The Wage and Hour Division has now enforced the reimbursement of the engineers’ back wages and damages,
NASSCO has also agreed to sign an enhanced compliance agreement that bars them from future federal labor law violations and requires them to train employees who manage and supervise foreign workers with non-immigrant visas. NASSCO must also provide notice to employees of their rights under FLSA and the Walsh-Healey Public Contracts Act.
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