12 February 2010 | Carly Chynoweth

Subcontracted staff who were owed overtime for the support work they carried out following hurricane Katrina are to receive $1 million (£641,000) in back pay.

The workers spent time after hours inspecting temporary housing trailers used by residents displaced by the hurricane in the US.

The Federal Emergency Management Agency outsourced the recovery work to services firm Fluor Enterprises. Fluor then subcontracted the inspection work to a company called Universal Project Management (UPM), which has since gone out of business.

The Department of Labor said the staff doing the inspections worked up to 84 hours a week but were paid only a straight hourly wage the whole time. Under the Fair Labor Standards Act all employees – whether in the private, federal or local government sector – should be paid at least the federal minimum wage of $7.25 (£4.65) per hour for the first 40 hours a week, plus time and a half for any hours beyond that.

The Department of Labor’s wage and hour division this week said it had resolved a lawsuit against the two suppliers, Houston-based UPM and Irving-based Fluor Enterprises.

Fluor Enterprises has denied any liability. A spokesman told SM: “Ultimately, UPM went out of business and the Department of Labor attempted to hold Fluor Enterprises responsible for UPM’s alleged actions.

 “As part of this process, Fluor Enterprises did not admit to any liability, and in fact, Fluor Enterprises denies that it did anything wrong or was a joint employer. It is still our position that Fluor Enterprises was improperly brought into this case due to the actions of our subcontractor.”

Secretary of labour Hilda Solis said: “Workers who help rebuild our communities and secure the safety of local residents following natural disasters should be fairly and legally compensated for the work they perform. This department is committed to securing their wages and overtime.”

More than 150 workers involved in the operations will receive the back pay.