Senator Lewis: We Need To Do More to Stop Wage Theft

It is estimated that nearly $700 million is not paid to about 350,000 mostly low-wage workers each year in Massachusetts.

By Bob Holmes (Patch Staff)
Updated Oct 6, 2017 2:12 pm ET

An Op-Ed Column from Senator Jason Lewis and Representative Paul Brodeur:

Earlier this year, at the start of the new legislative session, we were pleased to be appointed by the Senate President and House Speaker, respectively, to co-Chair the Joint Committee on Labor and Workforce Development. Together, we have since immersed ourselves in a wide range of labor and employment issues in the Commonwealth. We have held committee hearings on proposed legislation, met with many different stakeholders to hear their concerns and feedback, and conducted research on policies and best practices around the country.

One particular issue that may surprise many people is the serious problem of wage theft. Wage theft is a collective term for any denial of wages or benefits that are rightfully owed to an employee. The most common wage theft violations in Massachusetts are non-payment of wages, failure to keep true and accurate records, failure to pay the proper overtime rate, child labor violations, failure to pay minimum wage or tips, and failure to pay prevailing wage. Other violations include failure to submit accurate payroll records, earned sick time violations, and improper classification of employees as independent contractors.

Just how pervasive is wage theft? It is estimated that nearly $700 million is not paid to about 350,000 mostly low-wage workers each year in Massachusetts. In addition to the harm this inflicts on struggling working families, it also cheats the state out of greater economic activity, jobs, and tax revenue.

The Attorney General’s Office (AGO) is the state’s primary enforcer of laws relating to wages. Enforcement is carried out by attorneys and investigators in the AGO’s Fair Labor Division (FLD). In Fiscal Year 2017, the FLD received 16,684 calls and 5,604 complaints, and opened 607 cases related to wage theft. The FLD ordered employers to pay more than $6 million in restitution and more than $2.6 million in penalties. This is more than double the restitution ($2.6 million) and about triple the penalties ($900,000) from Fiscal Year 2016. The FLD also cited or settled 27 earned sick time cases, totaling $160,000 in restitution and penalties. And, the FLD issued 47 citations to 46 employers and assessed more than $270,000 in penalties for child labor law violations.

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San Jose: Public projects valued at $6 million will require project labor agreements

By RAMONA GIWARGIS
PUBLISHED: October 24, 2017 at 1:09 pm | UPDATED: October 25, 2017 at 4:54 am
SAN JOSE — City lawmakers on Tuesday adopted a policy that requires contractors to hire at least some union workers on public projects valued at $6 million or more, including new libraries, fire stations and airport improvements.

The City Council adopted “project labor agreements” requirement on a 6-5 vote. The agreements require a contractor to hire some workers from a local union hall and pay state-mandated prevailing wages — what a majority of workers in a county’s largest city earn. Contractors also must provide fringe benefits and hire a number of apprentices from disadvantaged groups. Contractors will be allowed to hire 35 “core” workers from their own workforce with the rest hired through a union hall.

Private construction projects, those funded by federal dollars and city-funded affordable housing projects will be excluded. Santa Clara County, Los Angeles, San Francisco, Oakland, Cleveland and New York have all passed similar labor agreements.

Backers said the agreements will help ensure every worker has a fair chance of getting work and support families struggling to survive in Silicon Valley’s technology-driven economy. Critics said the move will stifle competition and inflate construction costs, meaning taxpayers get fewer public improvements for their tax dollars.

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State of Alaska Holds Employer Accountable for Fatal Wall Collapse

10/18/17
WorkersCompensation.com

Anchorage, AK (WorkersCompensation.com) – Contractor Mark Welty, d/b/a North Country Services, has withdrawn his contest of $280,000 in fines assessed by the Alaska Department of Labor and Workforce Development. The department cited him for hazards leading to the workplace death of his employee, Nicholson Tinker. Mr. Welty unlawfully claimed that Mr. Tinker as an “independent contractor” rather than an employee, and willfully exposed Mr. Tinker to unsafe working conditions. The citations and fines will stand as originally imposed by Alaska Occupational Safety and Health (AKOSH).

“Nothing can bring back Nicholson Tinker. I hope this fine sends a clear message. When employers like Mark Welty endanger their workers and unlawfully classify them as independent contractors, our department will seek the strongest penalties possible,” said Alaska Labor Commissioner Heidi Drygas.

On September 30, 2016, Mr. Tinker and his coworker were demolishing wooden stairs and walkways attached to a 60-foot retaining wall at an Anchorage residence. As demolition neared completion, the sole remaining structural support was removed, causing a 29-foot section of the five-foot tall cinderblock wall to collapse on Mr. Tinker, who died from his injuries. This fatality would not have happened if North Country Services owner Mark Welty had taken basic steps to protect the safety of Mr. Tinker and other employees. Instead, Mr. Welty accepted the violations as willful, meaning he acted with plain indifference towards the health and safety of his employees. The violations addressed several critical failures during the planning phase of the job, including lack of proper structural assessment before demolition, inadequate or lack of bracing and shoring for the wall and retained earth, and a total lack of safety training for employees.

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Prevailing wage called “imperative” to housing bills

Oct. 10, 2017

State Building and Construction Trades Council President Robbie Hunter established a context in support of the prevailing wage in a Sacramento Bee story this week when he discussed how decent pay buys a highly skilled and trained work force that in the end cuts down on construction costs.

“Build it once, build it right,” the newspaper quoted Hunter as saying.

The Bee’s Oct. 8 story focused on the prevailing wage component included in five of the bills that were part of a housing package that was signed into law on Sept. 29 by Gov. Jerry Brown.

Three of the bills included an expedited approval process for contractors to get their projects built, including one piece of legislation, Senate Bill 35, which bypasses delays imposed by city councils and by a redundant environmental review process.

“Therefore,” Hunter said in a later statement, “it was imperative to have prevailing wage rates and a skilled workforce to assure that workers are paid a fair wage.”

As Hunter said in the video that accompanies the story, “If there is not a fair wage paid to the workers who are building a project, the very workers will be the ones who need the affordable housing.”

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Wage Theft Charged At Farnam Court (CT)

by ALLAN APPEL | Oct 6, 2017 8:35 am

A “fat cat” in a plush three-piece suit dangled and strangled a working guy in a yellow construction helmet on Grand Avenue the other day.

The cat and worker were 15-foot-tall cartoon characters full of compressed air and bobbing in the breeze. But the display was no joke no joke. The blow-up figures were deployed Thursday afternoon by members and supporters of the New England Regional Council of Carpenters (NERCC) in support of Terail Slaughter, a non-union carpenter who had been employed helping to build the tower buildings of the Housing Authority of New Haven’s Farnam Court Townhouses rebuilding project.

About a dozen carpenters and their supporters were on the corner of Grand Avenue and Hamilton Street for two purposes, according to lead organizer Ernest Pagan: to support a wage theft complaint, and to encourage other workers to step forward and make similar complaints when necessary.

The Complaint

Slaughter has lodged an $18,000 wage theft complaint against Palmucci Rivera Construction Concepts (PRCC), a carpentry subcontractor managed by Haynes Construction. The Seymour-based company is a general contractor on the $42 million redevelopment project of the 75-year-old troubled housing complex.

The complaint, which was filed with the state Department of Labor in mid-summer, documents that Slaughter, a nine-year veteran carpenter who had also been a starting guard at Wilbur Cross, was paid $14 an hour. The “prevailing wage” – that is, the nationally mandated wage for a carpenter in Connecticut working on a publicly funded project, is $56 an hour.

Slaughter began work in January 2016. In April he met Pagan, who had come to fact-find and organize. Pagan urged Slaughter to ask for a more appropriate salary. Slaughter eventually took the advice, and PRCC, without acknowledging wrongdoing, raised his hourly wage to $46.

That, however, is the prevailing wage for a laborer, not for a carpenter. This alerted Pagan that, in addition to theft of wages directly, PRCC’s move was misclassifying Slaughter into a lower-paying category than he deserved.

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Schaumburg company pays $1 million in fraud case (IL)

Barbara Vitello
updated: 10/4/2017 4:55 PM

A Schaumburg construction company will repay the state $1 million for falsifying payroll records on public works projects, Attorney General Lisa Madigan announced Wednesday.
According to Madigan, the contract A. Lamp Concrete Contractors Inc. had with the state required the company “pay workers on public works projects prevailing wages” and provide documentation to the state proving the wages were paid.

However, between 2008 and 2014, A. Lamp submitted false payroll records that underreported the number of hours certain employees worked, which created the appearance the company paid higher wages than it actually paid.

“Our state’s prevailing wage laws are in place to protect both workers and law-abiding contractors,” Madigan said in a prepared statement. “Skirting laws and putting Illinois workers at a disadvantage will not be tolerated.”

Authorities charged former A. Lamp Vice President and co-owner Joseph Lampignano with directing workers to submit false payroll records. Lampignano pleaded guilty to mail fraud and was sentenced in January to 10 months in federal prison, according to Madigan’s office.

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Contractor ordered to pay $100K in back wages for Hammond project (IN)

Karen Caffarini – Post-Tribune
September 19, 2017, 8:55 pm

Back wages totaling $103,788 have been paid to 29 individuals who were underpaid while working on the Flagstone Village affordable housing project in Hammond, according to a federal agency.

Because the Flagstone Village was a U.S. Department of Housing and Urban Development project, the U.S. Department of Labor Wage and Hour Division said the prime contractor for the job, CRG Residential of Carmel, needed to incorporate the required Davis-Bacon and Related Acts and Contract Work Hours and Safety Standards Act stipulations into its subcontractors’s contracts.

According to a Department of Labor spokesman, Scott Allen, CRG was responsible for all violations and back wages owed because the subcontracts did not include these contract stipulations. Allen said subcontractors were not responsible for any wage violations on their part.

“Federal contractors owe it to taxpayers to comply with all applicable laws, including paying their workers fairly and fully,” said Wage and Hour District director Patricia Lewis, in Indianapolis. “Prevailing wage laws level the playing field for all contractors.”

Among those receiving additional compensation was a heavy equipment operator working for subcontractor Hubinger Landscaping in Crown Point, who was reportedly classified improperly, and thus paid at a lower rate than required, according to the Department of Labor.

The Wage and Hour Division also determined that CRG Residential failed to pay one employee for time spent transporting other workers to the job site at the start of the week and home from the job site at the end of the week. The company also classified the worker improperly and paid him a lower rate than required for his job classification when he was operating heavy equipment, according to the division.

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LA Task Force Says “GAME ON” in Fight to Stop Misclassifying Workers (LA)

10/26/17
WorkersCompensation.com

Baton Rouge, LA (WorkersCompensation.com) – It’s a hidden crime with thousands of unsuspecting accomplices, a multi-million dollar payroll, and an unfair business advantage to the bad guys. But a team of state and federal agencies are working together to tell companies that if they misclassify workers, then it is GAME ON.

GAME ON is the acronym for Government Against Misclassified Employees Operational Network, a unique task force found only in Louisiana. Partnering together are the Louisiana Workforce Commission (LWC)’s Unemployment Insurance and Office of Workers’ Compensation divisions and the Louisiana Department of Revenue, with cooperative agreements with the Internal Revenue Service and the U.S. Department of Labor’s Wage & Hour Division.

“We are putting companies on notice that misclassifying workers won’t be tolerated in Louisiana,” said LWC Executive Director Ava Dejoie. “The practice isn’t fair to the unsuspecting workers who are cheated out of critical benefits and protections, and it’s not fair to the thousands of businesses who ‘play by the rules’ but are undercut by companies that intentionally trim labor costs by misclassifying.”

Misclassification refers to a worker who by law is an employee, but is incorrectly classified as something other than an employee. Most misclassifications usually involve workers labeled as independent contractors.

The GAME ON task force has focused efforts on the industries historically known to use independent contractors to a large degree, namely construction, health care, hospitality, personal services and staffing companies.

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House, Senate Democrats Move to Prevent Wage Theft (MI)

Hardworking men and women deserve full amount they’ve earned

Monday, October 30, 2017

LANSING – House and Senate Democrats announced their plan to Prevent Wage Theft today to make sure workers get what they’ve earned. A report from the Economic Policy Institute earlier this year found that Michigan workers across all demographic groups are losing $429 million every year as a result of wage theft. It’s been almost 40 years since Michigan updated many of the state’s laws to protect workers’ pay.

“When we’re talking about nearly half a billion dollars being taken from workers’ paychecks illegally, it’s clear the system is broken,” said state SenatorJim Ananich (D-Flint). “These folks are playing by the rules and trying to provide for themselves and their families. We need to do right by them and bring our laws into the 21st century.”

Data from the EPI report show that 17 percent of low-wage workers in Michigan have experienced wage theft, which includes paying less than minimum wage, failing to pay overtime, working off the clock, confiscating tips, misclassifying employees as independent contractors, or even failing to pay workers at all. Earlier this year, FOX 17 reported the story of 24 West Michigan carpenters who hadn’t been paid $35,000 that a construction company owed them. They had bank accounts frozen, couldn’t afford family medical expenses and even lost their cars.

In addition to holding back Michigan’s workers and its economy by keeping hundreds of millions of dollars out of pocketbooks around the state, law-abiding businesses are at a disadvantage to the bad actors who increase their profits by stealing from their employees.

“When Michigan’s workers do better, our whole state benefits. Sadly, a handful of bad actors are holding us back to the tune of nearly half a billion dollars per year and our state isn’t doing enough to help,” said House Democratic Leader Sam Singh (D-East Lansing). “Democrats are stepping up to ensure that hardworking Michigan workers get what they earn and that everyone plays by the same rules.”

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NYC establishes safety training requirements for construction workers

October 4, 2017

New York – The New York City Council, after eight months of bill editing, on Sept. 27 unanimously approved legislation establishing construction safety training requirements and programming.

The bill was introduced in January in response to the high number of construction site deaths in the city – at press time, 40 since 2014, according to a New York Times report. The legislation was changed twice to satisfy stakeholders – including the city’s real estate board, independent contractors and immigration officials – who were worried that day laborers would not be able to afford the training. The bill was revised to include $5 million to help fund their training.

Fines of up to $25,000 will be levied on sites using untrained workers, and workers can keep working until December 2018 if they have at least 10 hours of training completed by March. Permits for work can be withheld or denied renewal if the employer cannot prove all workers on a project have the required training.

Also included in the legislation, which went into effect immediately:
  • Workers must complete between 40 to 55 hours of safety training. The Department of Buildings will control the administration of the hours.
  • Workers can satisfy their training requirement with completion of an alternative training program, but only if DOB allows it after comparing it to the bill’s established training program

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