A California-based subcontractor that provides benefit enrollment support for federal workers shorted wages and benefits for 3,100 of its employees, a U.S. Department of Labor investigation found.
Alorica Inc., a customer service technology services provider that subcontracts to support federal dental and vision benefits, was found to have paid wages below what is called for by the Service Contract Act, a longstanding and complex regulation that sets a floor for compensation to protect workers.
“Violations under the Service Contract Act can be costly, as this case illustrates, but they are preventable with knowledge and due diligence,” Wage and Hour Division Regional Administrator Mark Watson said in a statement.
An investigation by the department’s labor law enforcement arm determined that pay shortages occurred between January 2017 and March 2022. The main contractor, Long Term Care Partners LLC, now operating as Fed Point, paid out $3,193,839 to settle the violation. The company administers the federal Long Term Care Insurance Program and Benefeds.
Alorica said it would audit its pay processes, according to the agency. Neither Alorica nor Fed Point responded to requests for comment.
“Throughout the course of the investigation, LTCP cooperated and ultimately paid all back wages and benefits owed to its subcontractor’s employees,” the department said.
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