KINGSPORT — It will be a merrier Christmas for about 280 current and former Wackenhut Services Inc. fire and security contract workers at the Holston Army Ammunition Plant, who will divide up about $2.5 million in back pay.
The 65 current employees received their checks Tuesday at work, and former employees dating back to 1999 will receive a check in the mail. The back pay for individuals ranges from $200 to $50,000.
In 2005 about 85 Wackenhut employees who have performed subcontracted fire and security services on the facility at least since 1999 filed a complaint with the Department of Labor seeking what at the time was alleged to be $3 million in unpaid wages.
The complaint alleged that the Wackenhut employees’ pay and benefits were too low and in violation of the McNamara-O’Hara Service Contract Act of 1965 (SCA). The SCA requires federal general contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees no less than the wage rates and fringe benefits found prevailing in the locality.
Congressman David Davis’ office confirmed Tuesday that the Department of Labor ruled in favor of the employees on Nov. 30. In the end, however, it’s the federal government and not Wackenhut that will be footing the bill.
Wackenhut Chief Operating Officer Paul Donahue told the Times-News Tuesday his company has been working with the U.S. Department of Labor for the past several months on a reconciliation of this dispute. Wackenhut will be billing the Army for the cost of the back pay.
“It’s great for Wackenhut because there are employees who are now thrilled,” Donahue said. “They’ve had a couple of tough quarters trying to decide what’s going on and where’s my money, but we’re at the tail end of that now. We’re going to bill the Army because it’s an allowable cost in government contracting.
“It’s legal and it’s expressly allowable under the federal acquisition procurement regulations.”
All Wackenhut employees at HAAP had their salaries adjusted to the prevailing wage for the area this past April, so the back pay reflected the period between this past April and 1999.
Donahue said the company’s vice president of operations was at HAAP Tuesday handing out checks to current employees. Former employees had their checks sent by certified mail on Friday.
The Times-News has been in contact with several Wackenhut employees since the dispute was first reported in June. On condition of anonymity one fireman told the Times-News Tuesday he’s very happy to have the dispute resolved and the back pay in hand, although he and his colleagues were shocked by the amount of income tax taken out.
Uncle Sam tagged some of the biggest recipients for as much as $17,000 or more.
“They’ve been telling us for six months it was coming that week, and finally this week it actually did come,” the fireman said.
The fireman added, however, there is still a dispute regarding health benefits.
Davis, who sits on the U.S. House of Representatives Committee on Education and Labor, sent a letter to Secretary of Labor Elaine Chao in June asking her to resolve the Wackenhut employees’ claim “expeditiously.”
“My job is to help cut through red tape in government and get answers from the different departments, and I’m glad the Department (of Labor) has finally released their finding and the people who work there will finally be receiving the back pay that the department has determined they deserve,” Davis told the Times-News Tuesday.
Donahue said that by cashing or depositing the check, the recipient relinquishes any future claims with regards to back pay.
Wackenhut has been contracted at HAAP since 1983, but when BAE Systems became the prime contractor in 1999 the mission for the facility changed. That mission change placed contractors and subcontractors under the SCA umbrella.