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Hunter: Iowans lose $600 million to wage theft each year (IA)

Posted by National Alliance for Fair Contracting on

Rep. Bruce Hunter, House District 34
Published 12:16 p.m. CT Feb. 15, 2019

The news is not good.Currently women in the state of Iowa make 79 cents for every dollar a man makes. We rank 31st in the U.S. when it comes to the gender wage gap, and the statistics are even worse for women who are African American, Latina, Asian American and Native American.

According to a recent study, 266,000 people lose $600 million per year in the state of Iowa due to wage theft issues. Iowa loses approximately $120 million in unpaid sales, income and payroll taxes annually. One in six construction workers is a victim of wage theft.

At the end of 2013, an Iowa Workforce Development misclassification unit found that over 380 employers had misclassified over 5,000 workers by claiming they were independent contractors instead of employees. Because of this over $90 million in wages had not been reported.

Wage theft is almost always connected to misclassification cases due to lost overtime and unpaid wages. In addition, those 5,000 workers lost out on unemployment and workers’ compensation benefits.

I am currently sponsoring a number of bills dealing with wage inequities in Iowa. The first, HF 89, deals with wage disparities between men and women and minorities and nonminorities. HF 24 concerns job misclassifications to avoid paying unemployment and workers’ compensation benefits. I have also introduced a bill, which does not yet have a bill number, which deals with wage theft.

None of these bills will ever receive a subcommittee hearing.

And if some miracle should happen and all of these bills would become law, I’m not sure it would matter.

(See Article)

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Gary homeless project contractors cited for pay violations (IL)

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By Carole Carlson
February 18, 2019

The U.S. Department of Labor ordered four contractors, who built the $9.5 million Village of Hope federal housing project in Gary, to pay workers $255,474 for failing to pay prevailing wages and fringe benefits. 
The labor department announced the ruling last week.

The wage law violations impacted 53 former and current employees, according to a release from the labor department.

“Government contractors receive detailed agreements that include prevailing wage and fringe benefits rates, required to be paid by all contractors working on a federally funded project.

Prime contractors must assure that their subcontractors adhere to these rules as well,” said Wage and Hour Division District Director Patricia Lewis, in Indianapolis.The project’s prime contractor TWG Construction LLC, based in Indianapolis – has paid $82,477 to 20 employees.

TWG Construction LLC sub-contracted with a temporary staffing company, which failed to pay cleaning service crews in accordance with federal law.
The labor department’s investigation found temporary employees were misclassified and not paid the required prevailing wage rates.

Also, 8 Aces Construction Inc., Lansing, Ill., has paid $69,022 to 19 employees. Investigators found the company failed to pay finishers, painters and carpenters prevailing wage rate. The employer also failed to pay required fringe benefits to employees.

Due to the repeat and “willful nature” of these violations, the labor department said 8 Aces Construction Inc. and owner Jose “Tony” Ochoa have been declared ineligible to bid on federal contracts for a period of three years. A 2017 investigation found 8 Aces owed back wages totaling $99,313 to 95 employees.

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“Lifting Up Illinois Working Families Act” Increases Minimum Wage to $15 Per Hour (And Penalties for Non-Compliance) (IL)

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By Carole Carlson
February 18, 2019

Illinois Governor J.B. Pritzker signed the Lifting Up Illinois Working Families Act into law on February 19, 2019. The Act gradually increases the minimum wage to $15 per hour over the next six years. Illinois is now the fifth state (after California, New Jersey, New York, and Massachusetts) to raise the minimum wage to $15 per hour. While the Act is receiving a lot of press for the minimum wage increase, it makes other changes to Illinois law about which Illinois employers must also be aware.
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Penalties Increase for Underpayment and Recordkeeping Violations

In addition to the minimum wage increases, the Act increases certain penalties for recordkeeping violations and underpayment of wages. Employers who fail to keep payroll records as required by the IMWL are now subject to a new penalty of $100 per impacted employee. This penalty arguably will accrue each day that the violation continues under the IMWL’s existing provisions.

The Act also increases employers’ exposure in the event of underpayment of wages. An employee who is able to show underpayment of wages is entitled to recover three times the amount of the underpayment. Previously, the law limited recovery to the amount of the underpayment. For each month that the amount of the underpayment remains unpaid, a prevailing employee can recover damages in the amount of 5% of the underpayment. Prior to the Act, employees could recover 2% as damages.

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Payroll tax fraud believed to be spreading throughout Indiana’s construction industry (IN)

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By: Drew Gardner
Posted: Feb 25, 2019 10:34 PM EST


SOUTH BEND, Ind. — The construction industry across Indiana is facing something many contractors call a growing problem — payroll tax fraud.
Some contractors are believed to be misclassifying workers, which robs them of many of the regular benefits employees receive and robs the state and federal government of hundreds of millions in tax dollars.

As you drive through Michiana it’s easy to see things are pretty good in the construction industry right now. There are new developments around almost every corner, but in recent years contractors like Tim Larson of La Porte-based Larson-Danielson construction noticed something seemed ‘off’ in some of the bids they were seeing.

” When we bid for a job we know how much is labor, how much is material and we found other contractors bidding at prices we couldn’t quite perceive how they were getting there, because we knew how much they were spending on material and we figured they had to be spending a lot less on labor than we were,” said Larson.

That’s because some contractors are believed to be participating in worker misclassification.

Worker misclassification is the practice of labeling workers as independent contractors instead of employees.

The IRS has a 20 point checklist to determine whether a worker is an employee or an independent contractor.

(Read More)

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Lawmakers debate bill to allow Idahoans to get unpaid, underpaid wages back (ID)

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by KLEW News Staff
Tuesday, February 26th 2019

BOISE, ID – A bill allowing working Idahoans to recoup up to one year of under-paid wages is trying to become law.

Currently, Idaho only allows workers to get six-months of unpaid or underpaid wages through a process with the State Department of Labor.
It is one of the lowest look-back periods in the nation. Supporters of working Idahoans say it’s about fairness.

The Department of Labor said that most workers notice wage theft in one of two time periods; either the Monday after payday or when they do their taxes.

The bill being debated Monday maintains protections for Idaho employers while injecting fairness into the system.

“What this does is level the playing field and makes sure that someone who’s legitimately had wages stolen from them, can claim those wages up to a full year when they realize that their wages were taken from them, when they go to do their taxes,” said Rep. Mat Erpelding.

The Idaho Department of Labor processed more than 900 wage theft claims last year from workers representing virtually every line of work including construction, service workers, healthcare employees and retail workers.

(See Article)

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Local building unions, immigrant labor advocates unite over worker misclassification (LA)

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By: Michael Joe, Reporter

February 8, 2019

On a recent Saturday in January at Corpus Christi Church in the 7th Ward, Curiel stood in the afterglow. A workers’ forum aimed at “bringing immigrants out of the shadows” had just concluded. And it was jointly organized by the Southeastern Louisiana Building and Construction Trades Council and three community organizations focused on workers’ rights and economic justice – Step Up Louisiana, the Workplace Justice Project and the New Orleans Workers’ Center for Racial Justice, a grassroots group founded after the storm by immigrants and African Americans.

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Organizers said the goal on Jan. 26 was to educate immigrant workers about their rights and highlight what they say is a common problem that hurts unions and immigrant workers alike: the misclassification of workers as independent contractors – rather than employees – by construction contractors and subcontractors.

When you call an employee an independent contractor – when they are actually an employee – that allows you to not pay workers’ compensation, not pay social security and not pay time and a half for overtime. Not only is the worker being exploited, it’s creating an unfair playing field for the contractors that are actually doing the right thing,” said Chip Fleetwood, marketing manager with the Painters and Allied Trades International Union, District Council 80, in Kenner.

Union contractors are even more disadvantaged when bidding on jobs, because they are also paying for the health and welfare benefits of unionized workers, Fleetwood added.

(Read More)

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Subcontractor Ordered To Pay Back $160k In Stolen Wages (MA)

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The subcontractor for Worcester’s new luxury apartments at 145 Front Street will have to pay almost $160k to 50 employees.

By Samantha Mercado, Patch Staff 

Jan 30, 2019 4:47 pm ET

WORCESTER, MA- A subcontractor has to pay $158,000 in back pay to 50 employees on the 145 Front Street development in Worcester after a determination announced by the U.S. Department of Labor Wednesday.
The subcontractor is P&B Partitions, a New Jersey company hired by the general contractor, Erland Construction, for the luxury apartment building owned by Mack-Cali. The company was found to have skimped on overtime pay, giving employees straight time in cash.

An investigation into the wage theft began in April 2017 when the Worcester Carpenter’s Union filed a complaint. What started as five carpenters, grew to a group of 12 signed complaints, the union said, adding that all of the wage theft victims were people of color, primarily Latino.
David Minasian, Business Manager for Carpenters Local 336, called the determination a loud warning bell for city and state leaders. “The wage theft business model perpetuates itself because it is profitable. We were concerned when Erland was selected to build the project, and worried when we heard they were going to hire P&B Partitions with a history of avoiding wage and hour laws,” Minasian said.

The union held weekly rallies for months to support the workers and raise awareness about wage theft. In April, 2018, the National Labor Relations Board awarded one of the carpenters that stepped forward $15,000 in back wages, after the union said he was unlawfully terminated for trying to improve the working conditions and beginning efforts to organize the carpenters.

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Massachusetts AG’s Office Aims To Clamp Down On Wage Theft (MA)

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By Arun Rath

February 26, 2019

Massachusetts’ ongoing construction boom has brought with it a problem: wage theft – when workers don’t get things like overtime or sick pay, or when they’re not paid at all – on a massive scale.

Last year, Attorney General Maura Healey’s office brought more than $2.7 million in penalties and restitution against local construction companies. Some of that money is going to the more than 1,000 Massachusetts workers who were victims of wage theft last year.

Javier Hernandez was one of them. He spent six months working construction on a new hotel in Porter Square. But he said that every time it was pay day, “They always say, ‘Next week. Next week. Next week.'”
It was the same story when the holidays came.

“I spent Christmas with no money,” Hernandez said. “I have a kid. 10 years old. So, I couldn’t buy a present for him. Because I’m still waiting for the money. And, and that’s so sad.”

Hernandez’ story is a familiar one to Gladys Vega of the Chelsea Collaborative – a Latino-led social services organization that assists a lot of immigrants and refugees. Vega said immigrants are often targets of unscrupulous employers.

“We probably get 10 to 15 people a week with individual cases of not getting paid, of wage theft,” Vega said. “So, I mean, it’s huge.”

In Hernandez’ case, the collaborative was able to work with partners like the local Carpenter’s Union to get the company to pay up. But when the companies don’t cooperate, it’s the job of law enforcement. And Healey has had a busy year busting wage thieves.”We went after a local construction company that wasn’t paying its workers overtime or hourly wages or the prevailing wage that they were supposed to be paying them doing public construction projects,” Healey said. “We cited them over half a million dollars.”

The AG’s office issued citations to 66 construction companies working in the state last year. Those companies face a combined $1.23 million in fines, in addition to providing back pay to more than 1,000 workers.

Healey said many of the investigations are prompted by tips from workers. But a lot of workers are immigrants or undocumented and are afraid to complain.

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In Major Wage Theft Case, Ipswich Construction Company Cited $580,000 for Violating State Wage Laws (MA)

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Office of Attorney General Maura Healey – 2/28/2019

BOSTON – An Ipswich construction company and its owners have been cited $580,611 in restitution and penalties for violations of state wage and hour laws, Attorney General Maura Healey announced today.

The AG’s Office has issued six citations against ERA Equipment LLC and its owners, Kristen and Angelo Ciardiello, for a range of wage theft violations including failing to pay overtime and the prevailing wage. 

“Our investigation showed that this construction company stole hundreds of thousands of dollars from its workers,” said AG Healey. “Wage theft is a serious offense in Massachusetts and we will continue to take action when needed.”

The AG’s Office began its investigation in September 2017 after receiving a report alleging the company was not paying the proper prevailing wage. The investigation revealed that none of the company’s 13 employees received overtime pay when working more than forty hours in a week. Four employees were also not paid the appropriate prevailing wage rate while working on projects in the towns of Littleton, Scituate, and Wellesley, sometimes receiving less than half the prevailing wage rate required by law.

The investigation also revealed that the company failed to include some employees in the company’s payroll records, inaccurately reported the employees’ hours of work to avoid paying them overtime and kept inadequate and inconsistent payroll records.

The AG’s Office previously brought enforcement action against ERA and the Ciardiellos for nonpayment of wages, prevailing wage, and payroll records violations, including issuing citations that Angelo Ciardiello and his company, ERA Disposal LLC d/b/a ERA Equipment LLC, paid in 2015 for failing to pay five employees for one day of snow removal work.

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Testimony at MN Capitol underscores need for stronger wage theft laws (MN)

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By Howard Kling, Workday Minnesota – February 12, 2019

MINNEAPOLIS/SAINT PAUL – Workers and business owners highlighted the need for stronger wage theft laws during a press conference and legislative hearing at the Minnesota Capitol on February 6. The hearing before the Minnesota House Labor Committee was the first stop for HF6, a bipartisan bill that would set rules and penalties for employers who avoid paying, or fail to pay, wages earned by their employees.

“I am here today to demand an end to this practice of wage theft,” said Humberto Miceli, a member of Centro de Trabajadores Unidos en la Lucha (CTUL). With the help of CTUL, Miceli was able to recover wages stolen by an employer, but in the end he received only 10% of what he was owed. “It is real people who suffer the consequences the way things are right now,” added Miceli.

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Based on complaints filed with the Minnesota Department of Labor and Industry (MNDLI), an estimated 39,000 Minnesota workers are not paid what is owed to them in earned wages each year. In 2015, the last year data was compiled, the Department recovered $1.3 million in back wages for Minnesota workers. MNDLI, as well as labor and community organizations, maintain the scope of the problem is much larger since most workers don’t report wage theft violations, many out of fear of retaliation from their employer.

“There are no repercussions for some of the worst offenses that we see in the construction industry and I am here today hoping legislators support HF6,” said Arturo Hernandez, a journeyman carpenter with Carpenters Local 68. “If I stole money from my boss at work, I would go to prison.”

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