For two years, DeVries Moving, Packing and Storage underpaid 145 workers a total of $58,000, while it collected $731,000 in taxpayer money to pack and haul furnishings at Fairchild Air Force Base and another agency, a federal investigation has found.
U.S. Department of Labor investigators, acting on the complaints of employees, late last year concluded that the Spokane Valley company had paid 145 packers and movers at rates lower than those mandated for work from June 1994 through June 1996 on the base and at U.S. Department of Agriculture offices.
Under a consent decree offered by the Labor Department and approved by an administrative law judge in Washington, D.C., DeVries has agreed to return the back wages at a rate of $2,500 per month, records show. A Labor Department official said the company began depositing back wages in an escrow account in January.
The Air Force’s Office of Special Investigations also reviewed DeVries’ actions, but apparently took no action.
Because of a federal rule that delays disbursements until half the amount is collected, affected workers won’t see any of the money until later this year.
“They (DeVries) knew they were doing it, leaving dozens of families hanging,” said Jim Scott, a former employee. Scott and his wife, Samantha, are owed nearly $2,000, documents showed.
President Mike DeVries declined to discuss details of the case, deferring to the investigative report by the Labor Department’s Wage & Hour division.
In that report, investigators wrote that Mike DeVries “didn’t realize these contracts called for a wage determination rate.” The businessman, the report said, acquired the Fairchild and USDA moving contracts in 1995 when he bought out his brother, Patrick.
Investigators found that DeVries’ employees, including 135 men and 10 women, were paid less than the prevailing wage required under separate contracts with Fairchild and the USDA.
Payments owed to current and former DeVries employees range from $21.25 to $2,525.98. At least 14 workers are owed more than $1,000.
Veva Graves, operations manager who oversees back wage collections at the Labor Department’s San Francisco office, said the agency will work with DeVries to locate workers who are owed money. But many are difficult to track because they were transient laborers sent by employment agencies to work for as little as one day. If employees cannot be located, their back wages will go to the U.S. Treasury.
“More often than not in these situations, employees don’t know they’ve got money coming,” Graves said.
Seward Dinsmore Jr., a Labor Department investigator who spent weeks reviewing DeVries’ records, said the company paid some people $8 per hour when they should have received up to $10.45. But others were paid more than the minimum rates, he said, and DeVries always paid employees overtime when they exceeded 40 hours per week.
DeVries is a 46-year-old family-owned company with headquarters in the Spokane Business and Industrial Park. The Fairchild and USDA contracts were a small piece of the approximately $5 million the company generates in annual revenue, Labor Department records show.
Fairchild awarded DeVries the current packing and moving contract three years ago, which was worth about $666,000. Together, with a small contract with the USDA, DeVries collected nearly $731,000 a year from the federal agencies.
Fairchild spokeswoman Lt. Amy Hulton said the value of the base’s moving contract this year will be higher. The base estimates that in fiscal 1997, which ends Sept. 30, the moving contract will be worth nearly $776,000.
DeVries current five-year contract expires in 1999, Hulton said, and is reviewed each year.