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Ariz. Contractor Faces Big Fines Over Alleged Worker Pay Infractions

Posted by National Alliance for Fair Contracting on

June 7, 2022 – Jim Parsons
ENR Southwest

A federal judge has ordered a Tempe, Ariz., plastering and stucco contractor to rectify longstanding worker recordkeeping violations or face weekly coercive fines of up to $10,000.

The May 27 order, issued by US District Court Chief Judge G. Murray Snow against Valley Wide Plastering Inc., its owners and vice president, marks the latest chapter in a long-running effort by the U.S. Dept. of Labor to force firm compliance with the federal Fair Labor Standards Act.

According to court documents, separate department investigations, conducted in 2012 and 2017 into allegations of payroll discrepancies at Valley Wide, found that owners Jesse Guerrero and Rose Guerrero, and vice president J.R. Guerrero, intentionally allowed inaccuracies in the recording of employees work hours.

Examples included filling in false hours or manually altering the number of hours employees recorded without adequate justification. Evidence also suggested that Valley Wide failed to maintain daily time and payment records, including paying wages from non-payroll accounts, and intentionally reduced regular employee rates to give the false appearance of overtime pay.

A February 25, 2021, preliminary injunction, also issued by Judge Snow, ordered Valley Wide to implement a reliable timekeeping system and maintain accurate and complete records of each employee’s gross wages, deductions and net pay. The company subsequently converted from a piece-rate to an hourly wage system, with employees documenting time using a paper-and-pencil system.

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City apprenticeship program raises standards for workers and taxpayers (AZ)

Posted by National Alliance for Fair Contracting on

By Jennifer Grøndahl| Karla Walter
November 5, 2019

It’s no secret that Phoenix has become a Baby Boomer mecca. America’s largest generation has been flocking here for years, bringing with them revenue for local businesses and tax dollars for the city, but also their garbage. Garbage that the city now needs to collect.

Phoenix, like many cities, has struggled to keep up with the growing demand for government services like garbage collection, while also facing high retirement rates among aging municipal workers.

But unlike many cities, Phoenix has also come up with an original solution to meet this demand. When the city and LIUNA Local 777, which represents many municipal workers, realized they were facing a shortage of qualified sanitation workers, they partnered to create an innovative apprenticeship program that trains area residents to become skilled sanitation workers while maintaining a high level of service for taxpayers.

As a local leader who helped implement these apprenticeships and a researcher at a national think tank focused on policies to make government work better, we believe the Phoenix-LIUNA Local 777 partnership should serve as a national model.

Through the city’s solid waste equipment operator apprenticeship, workers obtain their commercial driver’s license and receive specialized instruction on operating trucks through narrow city streets and customer service skills. Previously, the city required applicants to have a commercial driver’s license before being hired, which was a significant barrier to employment, because tuition for commercial trucking schools costs thousands of dollars.

By giving sanitation workers an opportunity to earn these skills and credentials while on the job, the city ensures that workforce training is of high quality. Moreover, the Phoenix-LIUNA Local 777 partnership focuses recruitment on women, veterans and youth, attracting employees who reflect Phoenix’s diversity and who might not otherwise have had access to high-quality city jobs.

For apprentices, who are often transitioning from near minimum-wage jobs, city employment offers a significant earnings boost and a clear career path. The involvement of existing city employees makes the apprenticeships a success. Veteran employees help with recruitment and program graduates informally mentor new apprentices.

As a result, the apprenticeship graduates have higher levels of loyalty and motivation to both the City of Phoenix and the union. Nearly all who start the program finish, and despite their more junior status, graduates are among the most successful employees, at times outshining more senior workers.

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AZ contractor ordered to pay $48K in worker misclassification case

Posted by National Alliance for Fair Contracting on

By Kim Slowey
July 28, 2016

Dive Brief:

  • The U.S. Department of Labor has ruled that Arizona homebuilder DCO Custom Builders must pay $48,000 in back wages and penalties for misclassifying workers as independent contractors and not paying employees at overtime rates when required – in violation of the Fair Labor Standards Act, according to the Arizona Republic.
  • The DOL investigated DCO for two years and ordered the contractor to pay 31 employees $24,255 in unpaid overtime, additional penalty wages and restitution in the amount of $4,604.
  • Despite DCO’s actions, a DOL spokesman said the company is now in compliance with fair labor standards, and DCO managing owner Daniel Osete said the company was unaware it was violating a law and has taken internal measures to make sure the same situation doesn’t happen again.

Dive Insight:

Eric Murray, director of the DOL’s Phoenix Wage and Hour Division office, said misclassifying workers as independent contractors “cheats” employees and taxpayers alike. Murray told the Arizona Republic, “As this outcome shows, we are committed to protecting the rights of construction workers and will use every tool available to hold employers accountable.”

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Misclassification of workers called a ‘serious’ problem

Posted by National Alliance for Fair Contracting on

Laurie Merrill, The Republic
8:13 p.m. MST April 1, 2015

 

The federal government is using enforcement and education in its ongoing battle to stop construction businesses from hiring off-the-books laborers to cut costs, a Labor Department official said.

“There are, sadly, businesses out there that use misclassification as a business model,” David Weil, U.S. Department of Labor’s Wage and Hour Division administrator, said at a construction industry seminar in Phoenix Wednesday.

The practice of paying lower wages to untrained workers by misclassifying them as independent contractors is growing, Weil said. By doing so, companies avoid paying taxes, employment insurance, liability coverage and legal wages. Underpaid employees often are afraid to come forward.

“The misclassification of employees as independent contractor presents one of the most serious problems facing affected employees, employers and the entire economy,” Weil said.

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3 AZ Companies Pay Nearly Quarter Million in Back Wages

Posted by National Alliance for Fair Contracting on

Hundreds of Valley workers are getting paid the money they’ve been waiting for.

Two security service providers and a piping company are paying their workers back more than $220,000, according to the U.S. Department of Labor spokesman Jose Carnevali.

Special Security Force Inc. and United Metro Security Force LLC in Peoria paid $70,633 in back wages to 203 workers and $24,849 in penalties.

An investigation found that workers weren’t getting half-time pay for hours beyond the 40-hour work week and were only being paid for “scheduled” hours instead of hours worked.

Investigators also found the company made improper deductions to cover the costs of uniforms, cleaning fees, security equipment and other miscellaneous items, Carnevali said.

In an unrelated case, Speedy Gonzalez Construction, a contractor specializing in underground piping for electrical services in Glendale, paid $152,615 in back wages to 41 workers. 

(Read More)

Arizona Utility Subcontractor Debarred From Federally Funded Projects

Posted by National Alliance for Fair Contracting on

PHOENIX — The U.S. Department of Labor has recovered $198,085 in back wages for 23 workers employed by Glendale-based Tierra Contracting Inc. for willful violations of the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act. Tierra Contracting and its owner, Richard Juarez Sr., also have been debarred from applying for federally funded contracts for a period of three years because of the egregious nature of the violations found.

Investigators with the department’s Wage and Hour Division in Phoenix established that Tierra Contracting failed to pay the required prevailing wage rates and fringe benefits to power equipment operators, water truck drivers, pipe layers, grade setters and laborers working at the federally funded Northern Parkway highway project in Maricopa County. Tierra Contracting routinely submitted certified payroll records that did not accurately reflect the real hours worked by the affected employees. Employees were paid for overtime hours with separate checks, off-the-record and at straight-time rates, without the additional time-and-a-half, as required.

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Paul Johnson Drywall Inc. Agrees to Pay $600,000 in Back Wages, Damages and Penalties Following US Labor Department Investigation

Posted by National Alliance for Fair Contracting on
PHOENIX – As a result of a Wage and Hour investigation, Paul Johnson Drywall Inc. severed its relationship with Arizona Tract LLC., a construction labor contractor. Beginning April 2013, Paul Johnson Drywall entered into a contract with Arizona Tract for the provision of drywall labor. Arizona Tract classified former Paul Johnson Drywall workers as “member/owners” instead of employees, which stripped them of basic worker protections afforded to employees.

Today, the U.S. Department of Labor filed a consent judgment in the U.S. District Court for the District of Arizona by which Prescott-based Paul Johnson Drywall Inc., and its owner Robert Cole Johnson, agreed to take concrete steps to ensure that misclassification of its workforce does not occur again and to pay $556,000 in overtime back wages and liquidated damages to at least 445 current and former employees. The employer also agreed to pay $44,000 in civil monetary penalties.

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DOL Wage and Hour Division announces upcoming Prevailing Wage Seminars

Posted by National Alliance for Fair Contracting on

The Wage and Hour Division is pleased to announce the following Prevailing Wage Seminars for 2014:
Manchester, NH March 4-6, 2014
Phoenix, AZ March 18-20, 2014
Chicago, IL April 1-3, 2014
San Diego, CA April 22-24, 2014
Houston, TX May 7-9, 2014
Atlanta, GA June 3-5, 2014

If you wish to attend one of these seminars, please send an email to WHDPWS@dol.gov Your email should include your name, title, organization, mailing address, email address, and location of the seminar that you wish to attend. There is no fee for attending any of these seminars, however, space is limited. Upon receipt of this information, we will advise you whether your request can be accommodated.

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Tempe floor contractor forced to pay $100k in back wages

Posted by National Alliance for Fair Contracting on

Tempe-based Flooring Demolition Specialists LLC has paid $103,554 in back wages and liquidated damages to 24 employees.

An investigation by the U.S. Department of Labor’s Wage and Hour Division found that the Tempe floor removal contractor willfully violated the overtime and record-keeping provisions of the Fair Labor Standards Act.

The investigation by the division’s Phoenix District Office disclosed that a certain group of employees was paid straight time for all hours worked and did not receive an overtime premium for hours worked beyond 40 per week, as required by FLSA. The Tempe company also failed to pay employees for hours worked while loading company trucks and for travel time to job sites.