The U.S. Department of Labor has recovered $596,443 in back wages and fringe benefits for 31 workers after investigators uncovered a kickback scheme involving a Maryland HVAC subcontractor on two District of Columbia–funded affordable housing projects. According to the agency, the violations occurred during construction of the Carl F. West Estates and Northwest One Phase 2, both located in northwest Washington, D.C.
The Wage and Hour Division found that J. Solano HVAC LLC and its owner, Jose Williams Solano, violated the Davis-Bacon and Related Acts (DBRA) by failing to pay workers the correct prevailing wage and fringe benefits. Investigators determined the employer made informal arrangements with sheet metal workers and pipefitter mechanics in which they appeared to be paid full prevailing wages by check but were then required to return any amount above $30 per hour — a classic wage kickback scheme prohibited under federal law.
The division also found that the company misclassified some workers as lower-skilled laborers, a move that avoided paying the proper basic hourly rate, holiday pay, and fringe benefits required under DBRA. According to the agency, these actions were willful, leading to a significant penalty: J. Solano HVAC LLC and its owner have been debarred from bidding on federally funded construction work for three years.
“By uncovering this scheme, the department ensured that workers were paid fairly, received their full fringe benefits, and that competing contractors were not disadvantaged for appropriately bidding for work based on the required prevailing wage rates,” said Wage and Hour Division District Director Nicholas Fiorello, based in Baltimore. “Employers that don’t abide by federal contract requirements may end up being debarred from future government contract work.”
The two housing developments involved in the investigation are major affordable housing investments for the city. The Carl F. West Estates project will add 179 affordable units specifically designed for seniors and grandfamilies, while Northwest One Phase 2 is a six-story multifamily development supported by District funding.
The Department of Labor continues to emphasize that employers participating in government-funded construction must maintain strict compliance with prevailing wage requirements. The agency encourages both workers and employers to seek assistance when needed, including through its 866-4US-WAGE hotline, mobile timesheet app, and compliance toolkits.
The case underscores the department’s ongoing efforts to crack down on wage theft in federally supported projects, protect workers’ earnings, and ensure fair competition among contractors.
Originally reported by U.S. Department of Labor.
