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Mike DeBonis beat me to the story last night: The U.S. Department of Labor is investigating Capital Bikeshare for possible failure to pay the federal prevailing wage to its employees. The program, run by Portland, Ore.-based Alta Bicycle Share, is operating under a $16.4 million contract with the District Department of Transportation.

Former Bikeshare employee Samuel Swenson, who alerted the Department of Labor to the issue, tells me that while the $13/hour he was paid may sound like it’s only slightly less than the prevailing wage of $14.43/hour for a “bicycle repairer”—-specifically laid out in Alta’s contract with DDOT—-he was actually underpaid by more than $5/hour, since he was entitled to pay in lieu of the fringe benefits he says he was not receiving. Swenson says the back wages and benefits he’s owed total more than $5,000.

Swenson says that when he initially contacted the Department of Labor, he was met with skepticism and told that a program “renting bikes to tourists” didn’t sound like a service-contract case. Eventually, he persuaded the department of the case’s relevance, and the investigation began.

But on Swenson’s most recent call with the Department of Labor, he says, he was told that the investigation was on hold because DDOT had retroactively nullified its contract with Alta.

“They called me and said, ‘Hey, we got a letter from the Department of Transportation, the contract’s nullified’—-basically, ‘We don’t have any jurisdiction over this,'” Swenson says.

Swenson says that according to a friend who still works on the Bikeshare program, the contract nullification was announced at a recent Bikeshare management meeting.

DDOT spokeswoman Monica Hernandez, however, says the contract has not been nullified. “Last night I inquired with the team and was told nothing had been canceled,” she says.

And Department of Labor regional spokeswoman Joanna Hawkins says she’s unable to comment on the matter. “It’s an open and active investigation and so we can’t make any comment,” she says.

Clearly, the matter is far from settled. And it could have ramifications beyond the District: Alta operates bike sharing programs in cities as far away as Melbourne, Australia, and will run the big Citi Bike program in New York.

Photo by Darrow Montgomery