USPS Refuses to Sever Ties with Subcontractor that Defrauds Drivers of Wages, Benefits

Last month, newspapers reported a settlement between the Department of Labor and a USPS subcontractor that exemplifies the problem with postal subcontracting: After three years of defrauding its workers of pay and benefits, the contractor, MT Transportation & Logistics Services, Inc. was ordered to pay employees $1.8 million in back wages, and was barred from entering into new federal contracts for three years. The Postal Service’s reaction? Despite the contractor’s illegal treatment of its workers, current contracts with the disgraced company will remain in effect, the USPS said.

In the Jan. 4 rulling, the Department of Labor (DOL) found the contractor, a Long Island trucking company, guilty of withholding wages and benefits from more than 500 employees from December 2005 through December 2008. The company is under contract with the Postal Service to haul mail.

“This is an example of the improper and illegal practices that are often involved in postal subcontracting,” APWU Motor Vehicle Services Division Director Bob Pritchard said.

“APWU has protested USPS’ subcontracting practices for many years,” he said. “We have often pointed out that contractors’ bids are invalid. This settlement demonstrates one way subcontractors can afford to submit such low bids: They underpay their employees.”

USPS Refuses to Sever Ties

When the APWU learned of the violations, Northeast Regional Coordinator John Dirzius asked Area management if it planned to continue its current contracts with the company. In a Feb. 12 letter, the USPS said it did. “The fact that a contractor has been debarred does not mean that we have to terminate any existing contract,” a manager for the Area wrote.

“This is a shameful example of unethical and unlawful USPS contractors ripping off their employees,” Dirzius said. “Management’s response demonstrates the Postal Service’s complicity.”

Pritchard agreed. “The Postal Service does not seem to be interested in making sure their contractors conform to the law; they are only interested in eliminating jobs by contracting out work,” he said.

In his letter to postal management, Dirzius requested copies of all current contracts between the USPS and MT Transportation & Logistics Services, Inc in the Northeast Region. He is encouraging locals to monitor the expiration date of the contracts to ensure that the company is not awarded any new contracts for a three-year period. “The bottom line is that as a result of illegal and improper behavior by subcontractors, APWU members are being deprived of jobs,” he said.

Federal contract regulations require subcontractors to pay employees no less than the “prevailing wages” for the area in which they work. After a complaint was filed, the DOL found that the company and its officers had denied employees appropriate wages and fringe benefits, as mandated by the federal McNamara-O’Hara Service Contract Act.

“USPS subcontracting takes work away from postal employees and is inefficient,” Pritchard said. “The USPS claims to save money by awarding contracts to contractors, yet with skilled employees on site and postal equipment available, keeping the work in-house is much more efficient and practical.”