Compliance January 14, 2014

Federal Contractor to Restore $2M in Pension Benefits

January 14, 2014 (PLANSPONSOR.com) - An investigation by the U.S. Department of Labor (DOL) resulted in the restoration of $1,979,779 in 401(k) pension benefits to 515 drivers working on U.S. Postal Service contracts for Lange Trucking Inc.
Reported by

Because of violations of the McNamara-O’Hara Service Contract Act (SCA), the company, along with its President, William A. Langenhuizen; Vice President, William H. Langenhuizen; Secretary Treasurer, Antoinette Langenhuizen; Vice President, Robert Langehuizen; and Vice President of Finance, Lisa Kulak, have been debarred from eligibility for further service contracts with any U.S. government agency for three years for their failure to pay drivers required fringe benefits.

The DOL’s Wage and Hour Division has investigated the company several times in the past. Lange Trucking paid $500,000 of the unpaid benefits while Hoovestol Inc., which is based in Eagan, Minnesota, acquired the company subsequent to the violations and voluntarily agreed to fund the remaining $1.48 million in benefits. Hoovestol, which cooperated fully with the Wage and Hour Division during its investigation, has also corrected recordkeeping procedures, overhauled the plan to ensure timely payments into the plan going forward, posted wage determinations at the work site and made information about the contracts accessible to employees.

The SCA applies to every contract entered into by the United States or the District of Columbia, the principal purpose of which is to furnish services in the United States through the use of service employees. The SCA requires that contractors and subcontractors performing services on covered federal contracts in excess of $2,500 must pay their service workers no less than the wages and fringe benefits prevailing in the locality.

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