NASSCO "Failed to follow Federal Wage Regs" for 36 Mexican Engineers

The U.S. Department of Labor recovered more than $1.4 million for 36 Mexican engineers employed in San Diego by a subsidiary of General Dynamics Corp., one of the world’s largest defense contractors, that paid them in Mexican pesos below the federal minimum wage rate in violation of the Fair Labor Standards Act.

The department’s Wage and Hour Division found National Steel and Shipbuilding Co. one of three shipyards in the Marine Systems group of General Dynamics that designs and builds auxiliary and support ships for the U.S. Navy  used the L-1B visa program to bring the affected workers to San Diego from a General Dynamics subsidiary in Mexicali, Mexico, to install power plants, engines and machinery; complete structures and finish and furnish ships’ interiors.  

The division’s investigators learned NASSCO paid the engineers in pesos at Mexican pay rates to work an average of 42 hours or more weekly. They also determined the employer wrongfully treated the traveling workers’ per diem and lodging costs as wages and did not maintain accurate time records for them. Investigators found that NASSCO owed the 36 engineers $719,135 in unpaid minimum and overtime wages, plus an equal amount in liquidated damages.

“General Dynamics NASSCO brought these specialized workers from Mexico to San Diego to build vessels for the U.S. Navy but failed to follow the federal wage regulations that protect anyone working in the U.S.,” said Wage and Hour Division District Director Min Park-Chung in San Diego. “The Wage and Hour Division works closely with the Consulate General of Mexico in San Diego to educate Mexican nationals about their rights as workers in the U.S. and ensure those who employ them understand and comply with the law.”

In addition to paying the engineers their back wages and damages, NASSCO signed an enhanced compliance agreement that bars them from future federal labor law violations and requires they train employees who manage and supervise foreign workers with non-immigrant visas. NASSCO must provide notice to employees of their rights under FLSA and the Walsh-Healey Public Contracts Act.

The L-1B visa program enables employers to transfer professional employees with specialized knowledge from one of their affiliated foreign offices to their U.S. offices.

NASSCO is headquartered in San Diego and operates shipyards in Norfolk, Virginia; and Bremerton, Washington; and Mayport in Jacksonville, Florida. Its parent company, General Dynamics, is an aerospace and defense contractor employing more than 100,000 people worldwide and generated $42.3 billion in revenue in 2023.