CRESTVIEW — After an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD), Lockheed Martin Corp. has paid $327,271 in back wages and liquidated damages to 20 employees at a Crestview work site.

WHD investigators determined the company erroneously classified some employees as exempt from Fair Labor Standards Act (FLSA) overtime requirements, and paid them flat weekly salaries without regard to the number of hours they actually worked. This practice resulted in overtime violations when those employees worked more than 40 hours in a work week but the employer did not pay them overtime in addition to those salaries. The employer also violated the recordkeeping provision of the FLSA when it failed to keep accurate records of the number of hours worked by some employees.

WHD also found Lockheed Martin Corp. violated the requirements of the McNamara-O'Hara Service Contract Act (SCA) when the amounts paid to those salaried workers fell below the hourly rates and fringe benefits required by law for workers on the employer’s contract with the U.S. Department of Defense.

“Paying employees a fixed salary does not necessarily mean that they are not entitled to overtime,” said Wage and Hour Division District Director Daniel White, in Jacksonville, Florida. “Employers need to understand their responsibilities and ensure their pay practices comply with the law."

The SCA requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates, including prospective increases, contained in a predecessor contractor’s collective bargaining agreement.