Guard firm gets the boot on fed jobs

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Monday, December 1, 2003

WASHINGTON - The owner of a security guard company that served the military has been barred from obtaining federal contracts for the next three years for failing to properly pay his employees.

An Administrative Law Judge handed down the order to Michael Holiday and his company, Allstate Security, of Silver Spring, Md., in early November. The company also paid $265,367 in back wages to 155 employees.

According to an investigation by the U.S. Department of Labor’s Wage and Hour Division, the firm failed to pay employees for hours worked, failed to pay pension benefits and failed to pay correct hourly rates. The company’s failure to pay these wages and benefits violated the McNamara-O’Hara Service Contract Act, which requires that every service contract in excess of $2,500 contain a wage determination reflecting wages and fringe benefits. Wages and benefits are based on those prevailing in the local area or contained in the collective bargaining agreement of the contract.

The U.S. Department of Labor’s Wage and Hour Division completed its investigation into the case in 2001, according to Leni Uddyback-Fortson, spokesperson for the division. She declined to disclose whether it was an employeed who filed a complaint against the company.

Several calls to Holiday at his Silver Spring, Md., office were not answered.

“The labor department sought to prohibit the company from obtaining contracts with the U.S. government in this case because the employer deliberately violated the law and the violations were widespread throughout the company,” said Tammy McCutchen, administrator of the U.S. Department of Labor’s Wage and Hour Division. “The government should not be party to the underpayment of workers, especially those who provide important services.”

According to the U.S. Department of Labor, Allstate Security had in the past provided security for military installations and had contracts with the Navy to provide armed guard perimeter security at the Norfolk Naval Shipyard, a contract worth $2.1 million a year, and Cranberry Island in Portsmouth, Va. The company also worked for the Fleet and Industrial Supply Center at the Cheatham Annex in Williamsburg, Va.

Its most recent contract with the military ended in Sept. 2002.