Stout was retained by the Pennsylvania Office of the Attorney General (“OAG”) to assist in its investigation of Glenn O. Hawbaker, Inc., a construction and engineering company headquartered in Pennsylvania. The investigation related to potential violations of the Pennsylvania Prevailing Wage Act and the federal Davis-Bacon Act. These laws stipulate that individuals working on projects that receive state or federal funding should receive minimum compensation. This minimum compensation is inclusive of both wages and certain fringe benefits such as health care and retirement contributions.
Stout worked with the OAG to forensically analyze the company’s accounting system to determine which employees worked on projects that were applicable to the Pennsylvania Prevailing Wage Act and the federal Davis-Bacon Act, the time these employees worked on the projects, and the amount of compensation these employees were owed based on the time worked and the applicable laws.
Stout used project wage and hour data from the company’s financial system, financial disclosures, and third-party administrators (retirement fund management companies) to determine how much each employee was compensated for their time working on projects that were subject to the Pennsylvania Prevailing Wage Act and the federal Davis-Bacon Act. This involved apportioning each employees total compensation, including fringe benefits such as health care and retirement contributions, between all of the projects worked by each employee. Stout performed an analysis of the company’s fringe benefit compensation to calculate the benefit each employee was receiving from the company’s fringe benefit package, inclusive of eligible health care contributions and retirement contributions. The expected compensation was then compared to the actual compensation for each employee to calculate any underpayments made to employees that were determined to be violations the Pennsylvania Prevailing Wage Act and the federal Davis-Bacon Act.
Stout's findings helped the OAG achieve over $20 million in restitution for over 1,200 employees of the company, the largest award of its kind ever for a national Davis-Bacon Act violation.