A Maryland HVAC subcontractor accused of orchestrating an under-the-table kickback operation will pay roughly $596,000 to the 31 employees it shorted on wages and benefits — and is now barred from federal projects, the U.S. Department of Labor announced.

DOL Uncovers Scheme on Federally Funded Projects

According to the agency, an investigation by its Wage and Hour Division found that J. Solano HVAC LLC and company owner Jose Williams Solano violated the Davis-Bacon Act, which governs pay standards on federally funded public works exceeding $2,000.

Investigators said Solano and his company verbally assured sheet metal workers and pipefitter mechanics they would receive full prevailing wages through regular paychecks. But behind the scenes, reality told a far different story.

Workers Forced to Return Earnings Above $30 Per Hour

Rather than pay the lawful rate, Solano allegedly instructed employees to hand back any portion of their hourly wages that exceeded $30, essentially creating a covert wage-skimming pipeline. The kickback requirement siphoned money directly from employee pockets, the department said Wednesday.

Nicholas Fiorello, district director for the Wage and Hour Division, said the investigation not only compensated the affected employees but also protected honest contractors who play by the rules.

“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,” Fiorello said.

Three-Year Debarment Imposed for Willful Violations

Because the violations were deemed willful, J. Solano HVAC and Solano himself now face a three-year debarment, blocking them from bidding on federally funded construction projects until the term expires.

The ruling marks a significant warning shot from federal labor regulators: wage kickbacks may seem hidden in the shadows, but the consequences ultimately strike with full force.