McKesson Specialty Distribution will pay more than $1.5 million in back wages and benefits to 515 workers.
According to a release from the Department of Labor, the company violated the McNamara O’Hara service contract act and the contract work hours and safety standards act.
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A Mckesson Specialty Distribution facility is in Memphis.
During the investigation, the department of labor found out the company did not pay the right wages to employees working on a federal service contract with the centers for disease control and prevention.
Statement from U.S Department of Labor:
"McKesson Specialty Distribution LLC contacted WHD to report the infraction at the distributor’s Aurora, Colorado; and its LaVergne and Memphis, Tennessee, facilities. WHD subsequently confirmed that the employer failed to pay the required prevailing wage rates to employees performing work on a federal service contract with the Centers for Disease Control (CDC). Paying incorrect prevailing wage rates further resulted in McKesson failing to pay correct overtime rates when employees worked more than 40 hours in a workweek. The employer also failed to pay the applicable fringe benefits required for employees working on this contract."
“McKesson Specialty Distribution made every effort to correct violations once they identified their errors,” said Wage and Hour Division District Director Nettie Lewis, in Nashville, Tennessee. “The U.S. Department of Labor encourages all employers to review their pay practices and contact the Wage and Hour Division for compliance assistance. We stand ready to provide the tools, guidance and information employers need to understand and uphold their legal responsibilities.”
University of Memphis Law professor Steve Mulroy said the company made the right decision to report the issue to the Department of Labor.
"It's a form of theft, the workers are entitled to certain wages under the law and not being given that wage they are being taken away what's rightfully theirs," said Mulroy.
He said if workers at other companies realize they aren't getting paid properly it’s important to call the DOL or human resources.
"Depending on whether the worker has a good relationship with people at work they can always bring it up to appropriate people at HR people in the company.
Professor Mulroy said it’s good the company caught the problem but said several employees were most likely struggling financially.
"The people that are often affected can barely afford to get the reduction in salary and it can impact them a lot," said Professor Mulroy.
Statement from McKesson:
"As part of an internal review, we identified the wage discrepancy and promptly worked to identify who was due to payment. We coordinated with the Department of Labor on our proposed backpay disbursement plan and confirmed that our calculations were aligned. It was important to us that our employees and the employees of the staffing companies who supported the Centers for Disease Control contract were properly compensated as quickly as possible."
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