US Labor Department signs agreement with Florida Department of Revenue to reduce misclassification of employees

U.S. Dept. of Labor
Wage and Hour Division 
Release Number: 15-34-NAT
Date: January 13, 2015 

WASHINGTON — Officials from the U.S. Department of Labor and the Florida Department of Revenue today signed a memorandum of understanding with the goal of protecting the rights of employees by preventing their misclassification as independent contractors or other nonemployee statuses. Under the agreement, both agencies will share information and coordinate law enforcement. The MOU represents a new effort on the part of the agencies to work together to protect the rights of employees and level the playing field for responsible employers by reducing the practice of misclassification. The Florida Department of Revenue is the latest state agency to partner with the Labor Department.

In Fiscal Year 2013, WHD investigations resulted in more than $83,051,159 in back wages for more than 108,050 workers in industries, such as janitorial, food, construction, day care, hospitality and garment. WHD regularly finds large concentrations of misclassified workers in low-wage industries.

“Misclassification deprives workers of rightfully-earned wages and undercuts law-abiding businesses,” said Dr. David Weil, administrator of the Wage and Hour Division. “This memorandum of understanding sends a clear message that we are standing together with the state of Florida to protect workers and responsible employers and ensure everyone has the opportunity to succeed.”

“Working with the states is an important tool in ending misclassification,” said Wayne Kotowski, the Wage and Hour Division’s regional administrator for the southeast. “These collaborations allow us to better coordinate compliance with both federal and state laws alike.”

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Feds, Florida reach deal on construction industry rip-off

01/13/2015 7:39 PM


Taxpayers were cheated.

Workers were swindled out of a fair shake.

Law-abiding businesses were forced to cut corners or go belly up.

A year-long investigation by Miami Herald and McClatchy Newspapers published in September found all this and more in Florida’s construction industry during the recession.

Publicly available documents and interviews with workers around Florida showed that contractors broke state law and cheated on their taxes in order to get work on the federally financed projects that were the lifeblood of the building industry between 2009 and 2013.

Now the U.S. Department of Labor has announced an agreement with the state Department of Revenue to crack down on the accounting trick that bad actors use to evade taxes and cheat their employees.

The problem, known as “worker misclassification,” happens when companies treat their workers as independent contractors instead of permanent employees. The companies don’t withhold income tax or file payroll taxes on those workers. They don’t pay unemployment taxes.

US Labor Department sues Little Rock, Arkansas, electrical contractor for failing to pay federal contract workers properly

U.S. Department of Labor
Wage and Hour Division

Release Number: 14-2243-DAL
January 7, 2015 

LITTLE ROCK, Ark. — The U.S. Department of Labor has filed a lawsuit with the Office of Administrative Law Judges against LRE Royal Electrical Contractors Inc. and its owner, George E. Smith, to recover $345,077 in back wages for 61 electrical workers. The action also seeks to prevent the company and Smith from obtaining federal contracts for three years.

The filing alleges Smith and his company, doing business as both LRE Electrical Contractors and LRE Electrical, violated the Davis-Bacon and Contract Work Hours and Safety Standards Acts when they paid electrical workers less than the applicable prevailing wage rates and corresponding overtime wages for work performed as part of four government contracts.

The Wage and Hour Division’s Little Rock District Office found that LRE Electrical and Smith did not register electrical workers in approved apprenticeship programs, but classified and paid workers as apprentices. The company and Smith also failed to pay these workers wage rates included in the contracts, which are based on the work an employee actually performs.

“Government contracts specify clearly how pay and benefits must be determined. Employers are required to adhere to these rules and pay workers correctly,” said Cynthia Watson, Wage and Hour administrator in the Southwest. “Contractors know these obligations when they bid on government contracts, and when the contracts are awarded.”

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Gov. Cuomo signs new legislation making it easier for workers and the state Labor Department to fight wage theft

NEW YORK DAILY NEWS / Sunday, January 4, 2015, 2:00 AM 

It feels good to be able to write about something positive for New York workers in my first column of 2015. After all, measures that benefit them and rein in abuses by their bosses are as rare as snow in August.

It took a long time but on Monday Gov. Cuomo gave a last-minute Christmas gift to hundreds of thousands of low-wage laborers across the state by signing legislation making it easier for workers and the state Department of Labor to fight wage theft, which in New York has been an epidemic for many years.

“I am tired of waiting,” said Marcos Lino, who filed a complaint with the Department of Labor in 2008 after enduring four years of being shortchanged by his boss in a small Flushing grocery store. Six years have passed and his case is still unresolved.

Hopefully now Lino – and thousands more who, like him, have waited far too long to recover what is rightfully theirs – will finally get some justice.

“The groundbreaking legislation signed today will protect both workers from abuse, and law-abiding businesses from being undercut by employers who turn a profit by breaking the law,” said Andrew Friedman, co-executive director of the Center for Popular Democracy.

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Executive Orders Impacting Construction in 2015

12/31/2014 by Daniel Frost 


In 2014 Barack Obama issued over 30 executive orders as promised in his State of the Union Address.  At least three of these orders are notable and will impact federal contractors and workers performing construction and construction management services.

On February 12, 2014, President Obama signed Executive Order 13658, which raises the minimum wage for workers on federal construction and service contracts to $10.10.  This order applies to procurements subsequent to January 1, 2015, and provides that after 2015, increases to the minimum wage will be tied to the Consumer Price Index.  The Department of Labor will be charged with enforcement and rulemaking on implementation and remedies for violations is already underway.

On July 21, 2014 President Obama signed Executive Order 13672, which extends the antidiscrimination protections of two previous executive orders to LGBT federal workers.  This order now prohibits discrimination in the federal civilian workforce on the basis of gender identity or hiring by federal contractors on the basis of sexual identity or gender identity.  Federal contractors will also be required to engage in certain affirmative action to provide equal opportunity to LGBT federal workers.  Final rules have been promulgated and the order looks to become effective early next year.  Enforcement will be through the Office of Federal Contract Compliance Programs.

Also on July 21, 2014 President Obama signed Executive Order 13673 which requires that for all federal contracts over $500,000, prospective contractors must disclose various labor violations as set forth in the text of the order.  Any violations so disclosed will be considered in determining whether the contractor is a responsible source.  Additionally, the information provided on violations must be updated every six months during the performance of the contract.  The order also prohibits contractors from relying on pre-dispute arbitration agreements to resolve various civil rights and tort claims where the amount of the contract is over $1 million.  Contractors with multiple serious violations in the past are now at risk for suspension and debarment.

It is too early to know for certain the precise risks and burdens of these new executive orders, but it is clear that from 2015 forward, the regulatory and oversight environment will be significantly increased for government contractors.

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