Number of ‘Wage Theft’ Claims is Rising

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A growing number of lawsuits have been filed over “wage theft”, where employers allegedly violate minimum wage and overtime laws, falsely claim a lower number of work hours and take employees’ tips. Worker advocates, along with some state and federal officials, say that this wrongful practice has become far too common.

The New York Times shares the story of Guadalupe Rangel, who workers seven days straight, sometimes 11 hours a day for Schneider warehouse. He often worked 70 hours per week unloading furniture and other imports from Asia to be shipped to Walmart stores, but he says he was never paid for the time-and-a-half overtime. Rangel joined a lawsuit along with hundreds of other warehouse workers. The suit was recently settled for $21 million, resulting in over $20,000 in back pay for Rangel. “Sometimes I’d work 60, even 90 days in a row,” said Mr. Rangel to the New York Times. “They never paid overtime.”

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A.G. Schneiderman Announces Conviction Of Electrical Contractors For Not Paying Prevailing Wages On Electrical Work Projects

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NEW YORK — Attorney General Eric T. Schneiderman today announced the conviction and sentencing of Ronald Bartiromo, Raymond D’Auria and R3 Electrical Inc. for failing to pay legally required wages to their workers on two public works projects throughout New York City.  Ronald Bartiromo and R3 Electrical pled guilty to the felony crimes of violation of prevailing wage requirements of the New York State Labor Law and grand larceny in the second degree.  D’Auria pled guilty to the misdemeanor crime of violation of prevailing wage requirements of the New York State Labor Law.  As a condition of the pleas, Bartiromo and R3 Electrical agreed to pay $273,943.66 in restitution to underpaid workers and are prohibited from working on public works projects for five years.  Bartiromo was also sentenced to 5 years’ probation.

“Mr. Bartiromo, Mr. D’Auria and R3 Electrical, Inc. are being held accountable for stealing wages from workers who did electrical work on several public works projects throughout New York City,” Attorney General Schneiderman said. “My office will continue to take strong action, including filing criminal charges, against employers who violate New York’s labor laws, steal taxpayer dollars and violate the public trust.”

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Updated Overtime Rules Would Cover 6.1 Million Workers

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In March of 2014, President Obama announced that the Department of Labor would adjust the salary threshold that determines which workers are eligible for overtime pay, so that low-paid salaried workers get paid overtime when they work long hours. Currently, salaried workers who earn more than $455 per week ($23,660 per year) may be exempt from being paid time-and-a-half for working more than 40 hours a week. EPI has previously recommended that the salary threshold be increased to $984-equal to its level in 1975, adjusted for inflation.

In Increasing the Overtime Salary Threshold is Family-Friendly Policy, EPI economist Heidi Shierholz examines who would be affected by this rule change and finds that raising the threshold to $984 would make 6.1 million more salaried workers eligible for overtime. In the first demographic breakdown of who would be affected by the rule change, Shierholz finds that an increase of this level would disproportionately help women, blacks, Hispanics, workers under age 35, and workers with lower levels of education. The newly covered workers would be those at the low end of the salary scale, who have limited power to bargain over their wages or hours.

“Raising the salary threshold for overtime will help low-paid managers and professionals, especially women and people of color, who are not being compensated when they work over 40 hours a week,” said Shierholz. “It’s clear that the Department of Labor should raise the threshold to $984, or even higher, so that low-paid white-collar workers are treated fairly.”

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Misclassification Robs Workers of Pay and Benefits, Hurts Honest Companies

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News today on the misclassification of construction employees and recent court decisions in Oregon and California that FedEx’s employees are not independent contractors are reminders that misclassification of workers is rampant in this country and that misclassification hurts workers, honest companies, and government at every level.

“Companies have put more and more risk, responsibility, and cost on their employees-requiring employees to pay their own employment taxes, to do without worker’s comp coverage, to pay for their own uniforms, and to rent the tools they need to work,” said EPI’s Vice President Ross Eisenbrey, who has studied misclassification since the 1990’s. “Misclassification robs workers of fair pay and benefits, and contributes to an economy where wages are flat, profits are soaring, and CEOs and top brass get the lion’s share of pay increases. Meanwhile, the companies that do not arrange their business to avoid their employment responsibilities are disadvantaged. It’s not just bad labor practices, it is unfair competition.”

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Washington state a leader in fighting payroll fraud, but problems still occur

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Dathan Williams wasn’t shy when it came to bragging to his workers about how he was breaking the law.The owner of a Seattle drywall company boasted to his employees about how he shortchanged them on pay and dodged taxes to gain an edge in bidding wars for work on government contracts.

The subcontractor also told his employees – many of whom were in the country illegally – how he reported workers to immigration authorities after they complained they were being underpaid.

Unfortunately for Williams, one of his workers was an undercover Seattle police officer.In July, Williams pleaded guilty in King County Superior Court to two counts of second-degree theft and one count of filing false payroll documents. He faces up to a year in jail and a $10,000 fine when he is sentenced later this month.

The Williams case is a high-profile example of the kind of payroll fraud that labor groups and state regulators say happens too often in Washington, despite the state being viewed as a model for detecting and prosecuting offenders

Collecticut: $6.5M in Back Wages Recovered Over Past Year in CT, but Much Work Remains

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Over the past year, the Connecticut Department of Labor’s Wage and Workplace Standards Division recovered $6.5 million in back pay for workers.  While the organization has stepped up its efforts since the recession, the amount collected represents only a percentage of the wage theft that occurs in the Constitution State, according to the Stamford Advocate:

A significant portion of the complaints – nearly 2,800 of them, accounting for $3 million – were from workers reporting that they were not paid at all. Another $1.2 million was distributed to workers who were not paid minimum wage or overtime as required by law. And more than $2 million was distributed to construction workers who were paid less than the state’s prevailing wage for government projects.

The Wage & Workplace Standards Division gets about 4,000 complaints a year, said the director, Gary Pechie. Most are from workers in the construction industry, service industries such as hotels and restaurants, and the transportation industry employing taxi, limo and tractor-trailer drivers, Pechie said.

“I don’t think people understand how tremendously workplaces have changed since the recession,” Pechie said. “There’s a lot of shenanigans going on.”

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Court Officially Affirms New CA Prevailing Wage Law

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Supporters Hail Victory for Bipartisanship, Economy and California Taxpayers

San Diego – Last Friday, after hearing arguments from both sides in the lawsuit aimed at blocking California’s new Prevailing Wage Law (SB7), San Diego Superior Court Judge Joel R. Wohlfeil affirmed his August 28th ruling upholding SB7. SB7 is a bipartisan law enacted in 2013 that encourages more of California’s Charter Cities to pay Prevailing Wage on locally-funded construction projects.

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Cranston builder pleads guilty to filing false claims to collect federal stimulus funds

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PROVIDENCE, R.I. – The owner of Alhambra Building Company, in Warwick, pleaded guilty Wednesday to filing false claims and documents to collect more than $500,000 in federal stimulus funds, the U.S. Attorney’s Office said.

The company, led by Donald F. Ihlefeld, 71,  of  Cranston,  was working on a renovation project to turn a former West Warwick textile mill into a walk-in health center when Ihlefeld falsely represented he paid employees local prevailing wages for their work, the U.S. Attorney’s Office said.

The Cotton Shed Project, as it was known,  was funded by the American Recovery and Reinvestment Act of 2009 through grants provided by the U.S. Department of Health and Human Services, Health Resources and Services Administration.

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