The U.S. Labor Department today announced the recovery of more than $1.4 million for 36 Mexican engineers employed in San Diego, California, by a General Dynamics subsidiary. The company allegedly paid the workers in Mexican pesos below the federal minimum wage rate, violating the Fair Labor Standards Act.
An investigation by the DOL’s Wage and Hour Division found National Steel and Shipbuilding Co. (NASSCO) used the L-1B visa program to bring the workers to San Diego from a General Dynamics subsidiary in Mexicali, Mexico, to install power plants, engines and machinery; complete structures and finish and furnish ships interiors.
According to a Labor Department spokesperson, the workers were paid directly via payroll in Mexico in Mexican pesos. When converted to U.S. dollars, the wages ranged from $6.80 to $12.48 per hour for all hours worked. The employees worked an average of 42.5 hours a week in the U.S. and they were not paid for overtime because the company did not account for their traveling time as hours worked.
The L-1B visa program enables employers to transfer professional employees with specialized knowledge from affiliated foreign offices to U.S. offices. According to ZipRecruiter, the average hourly wage for a shipyard worker in California is $23 per hour.
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NASSCO operates one of three shipyards in General Dynamics’ Marine Systems group. The shipyard designs and builds auxiliary and support ships for the U.S. Navy.
According to the Labor Department, NASSCO paid engineers in pesos at Mexican pay rates to work an average of 42 hours or more weekly. Investigators also determined that NASSCO wrongfully treated the traveling workers’ per diem and lodging costs as wages and did not maintain accurate time records. Investigators found the engineers were owed $719,135 in unpaid minimum and overtime wages, plus an equal amount in liquidated damages.
“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.,” said Wage and Hour Division District Director Min Park-Chung.
NASSCO signed an enhanced compliance agreement with the DOL that bars them from future federal labor law violations and requires training for employees who manage and supervise foreign workers with non-immigrant visas. NASSCO must also notify employees of their rights under FLSA and the Walsh-Healey Public Contracts Act.
Based in San Diego, NASSCO operates shipyards in Norfolk, Virginia; Bremerton, Washington; and Mayport in Jacksonville, Florida.
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