Anti-Prevailing Wage Lawsuit is a Waste of Money for El Centro

At a time when the City of El Centro is experiencing the second highest unemployment rate of any city in the nation, it is astounding that leaders there are wasting tax dollars and time by joining a lawsuit against a new state law designed to create more middle class jobs for construction workers across California.

The new law, Senate Bill 7 does not require cities to pay prevailing wages, but it does provide incentives to cities that choose to pay prevailing wages on projects that are locally funded.  SB7 gives access to state funding and financing if they will comply with prevailing wage agreements already in place for all state and federally funded projects on locally funded projects.

State and federal governments already require the payment of prevailing wage, because for over 80 years, prevailing wage laws have ensured that taxpayer dollars go to fund projects that are completed by the best trained workers available for the best value possible; more often than not, these projects are completed on time and on budget.  For years, out of state lobby groups have tried to convince local officials in California that they can save money by paying workers less.  In practice, these claims tend to fall apart.

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Fedex Settles Million-Dollar Misclassification Case, a Dozen Similar Suits Pending Nationwide

In a settlement of a federal court lawsuit in Maine, FedEx Ground has agreed to pay $5.8 million in back pay and legal fees to 141 drivers it misclassified as independent contractors.  The lawsuit claimed that FedEx denied overtime pay and made improper deductions in addition to requiring drivers to pay for their expenses.  While there were seven named plaintiffs in the case, only two signed the settlement.  The others felt the amount being paid out by FedEx was too low.

 The federal court judge noted that if the case had gone to trial, damages could have topped $10 million. Nonetheless, the court found the settlement fair and adequate:

 In approving the settlement last week, the court acknowledged that “the proposed settlement…is clearly a compromise that discounts to some degree…the drivers’ total claims” but is a “fair trade-off for the uncertainties of trial and appeal and a prolonged delay in receiving any money. In that regard, the court noted that FedEx Ground has won some independent contractor misclassification cases and lost others.

The court also found that the amount (one-third of the $5.8 million settlement) sought by the lawyers for the class for counsels’ legal fees, costs, and expenses was reasonable.

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Appalachian Oilfield Services Agrees to Pay $129,802 in Overtime Back Wages to 29 Workers at Ohio Oil Fracking Sites

COLUMBUS, Ohio — Appalachian Oilfield Services LLC has agreed to pay 25 heavy equipment operators $129,802 in overtime back wages after an investigation by the U.S.

Department of Labor’s Wage and Hour Division found the company was in violation of the Fair Labor Standards Act. At eastern Ohio drilling locations, the workers provided cleanup services and hauled away muck ejected from wells in the oil fracking process.

“Companies that underpay their employees also undercut employers who obey the law and pay their workers lawfully required wages,” said George Victory, the Wage and Hour Division’s director in Columbus. “Failing to compensate employees properly for all hours worked is unacceptable. The Wage and Hour Division is committed to ensuring workers receive the pay they have rightfully earned.”

An investigation conducted by the division’s Columbus District Office found that equipment operators were paid a flat daily rate for a 12-hour shift. When they worked in excess of 12 hours, they were paid an hourly rate. No overtime compensation was provided for hours worked in excess of 40 hours, in violation of the FLSA.

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Lowe’s Settles Independent Contractor Misclassification Case

Buying something at Lowe’s? Need help putting it where it belongs, hooking it up, making it work? “Get it installed by a Lowe’s professional,” Lowe’s advertises.

Over 4000 such “Lowe’s professionals” in California are members of the plaintiff class in an action alleging that Lowe’s misclassified its installers as independent contractors, rather than employees, thus depriving them of a variety of employee benefits, from workers compensation insurance coverage to 401(k) plan participation.

Without admitting liability, Lowe’s recently settled the case after mediation for a sum that could be as much as $6.5 million, depending on how many of the installers actually file claims and what damages they can prove (and assuming the proposed settlement is approved by the court). Plaintiffs’ attorneys fees may be up to 25% of that amount.

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U.S. Increases Scrutiny of Employee-Stock-Ownership Plans

The federal government is stepping up scrutiny of how U.S. companies are valued for employee-stock-ownership plans, a vital source of retirement savings for millions of workers.

Some owners are selling stakes in their companies to employee-stock-ownership plans at inflated prices, the government says, jeopardizing those savings.

The Labor Department is the plaintiff in 15 lawsuits related to employee-stock-ownership plans, with “virtually all” the cases alleging shoddy estimates of what a company’s shares are worth, said Timothy Hauser, a deputy assistant secretary at the agency’s Employee Benefits Security Administration.

“Valuation is the first, second, third and fourth problem,” Mr. Hauser said. In March, Labor Secretary Thomas Perez told lawmakers that some appraisals “have been deliberately inflated,” comparing them to real-estate-bubble-era home appraisals that “masterfully came in at what you needed.”

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16th Annual NAFC Conference Registration

The National Alliance for Fair Contracting will be holding its 16th Annual Conference this year in the lakeside city of Chicago, IL, September 17-19, 2014.

The NAFC Conference provides a national forum for those committed to combating noncompliance of state and federal public contracting laws and draws attendance from contractors, labor unions, fair contracting organizations, attorneys and various officials from local, state and federal governments around the nation.

This year’s conference will be hosted at the Sheraton Chicago Hotel and Towers. NAFC Chairman Rocco Davis and the rest of NAFC’s Board of Directors are diligently planning content and speakers to ensure this will be our most successful conference to date.

Register Now

Nashville Drywall Firm To Pay State’s Largest Worker Misclassification Fine

A $300,000 fine for misclassifying construction workers may be having a deterrent effect, according to officials with the Tennessee Department of Labor. The penalty was the largest to-date in a statewide crackdown on labeling full-time employees as contract workers.

TJ Drywall of Nashville was doing $2 million a year in business but only paying five percent of what regulators say they should have been in workers comp and unemployment insurance premiums.

The Labor Department’s Scott Yarbrough says the practice remains rampant in the construction industry.

“It upsets me when somebody who is following the rules – paying their insurance, paying their taxes like they’re supposed to. And they’re trying to compete with people who aren’t withholding any of that or paying for any of the benefits for somebody who is in fact an employee.”

Building Trades Unions Combine Efforts to Pass Responsible Contractor Legislation

When it comes to public construction projects in Minnesota, the law says that the lowest responsible bidder gets the job. What constitutes a “responsible bidder” wasn’t clearly defined in the law, however.

Too often, unscrupulous contractors skirt the law to win bids on taxpayer-funded projects. During the recent legislative session, the unions of the Minnesota Building & Construction Trades spearheaded an effort to rectify this, culminating in passage of a bill establishing criteria that contractors must meet when they submit bids to state or local governments.

A bi-partisan effort, with authors from both the Democrats and Republicans, the bill passed the House 84-38 and the Senate 59-0 and was signed into law by Governor Mark Dayton.

“The Trades were frustrated that unscrupulous bidders were being awarded public contracts on all sorts of jobs,” said Kyle Makarios, director of Government Affairs for the Regional Council of Carpenters and leader of the lobbying effort. “We put our heads together to come up with a mechanism to fix the problem.

California Truck Drivers Go On Indefinite Strike

More than 120 truck drivers who haul consumer goods from the ports of Los Angeles and Long Beach to retail warehouses launched an indefinite strike on Monday, according to MSNBC, escalating a tumultuous multi-year union organizing effort among the drivers. The consumer brands whose supplies could be affected by the strikes include Skechers shoes, Ralph Lauren, Walmart, and Home Depot, according to a press release from strike organizers.

The core complaint underlying the union drive is that companies like Total Transportation Services, Inc. (TTSI), Green Fleet Systems, and Pacific 9 Transportation deem their drivers “independent contractors” in order to avoid paying overtime and prevent their workers from enjoying various other labor law protections. The drivers say they are misclassified and should be treated as full employees, and have begun to flood the California Labor Commission with wage theft complaints in order to fight the misclassification and seek the pay that the “independent contractor” label has cost them over the years.

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