Roseville adds labor standards to subsidies after union criticizes developer’s use of subcontractors (MN)

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By J.D. DUGGAN
PUBLISHED: September 20, 2019 at 6:58 pm

Roseville has begun adding labor standards to development tax break deals after union officials raised concerns about how developers are using subcontractors.

Earlier this week, prompted by a dispute over a $29.4 million Fairview Avenue apartment building, the city required developers to obey all environmental, labor, health and zoning laws and restrictions, as well as to pay all contractors, subcontractors and laborers before requesting a Certificate of Completion. If a developer is found guilty of wage theft, the city can withhold payments.

“How are we going to make sure people are treated fairly and paid fairly and not given these promises?” said Roseville City Council member Wayne Groff. “I don’t know how much this will affect this exact development.”

The requirements will become standard language in all future agreements where the Roseville Economic Development Authority provides financial assistance.

Roseville’s move comes after members of the North Central States Regional Council of Carpenters told members of the Roseville Economic Development Authority at a meeting that some developers use subcontractors who allegedly break labor laws such as using child labor, stealing wages and exploiting workers.

DEVELOPER IN THE CROSSHAIRS

Minneapolis-based Reuter Walton is planning an apartment building in the 2700 block of Fairview Avenue in Roseville. A $3.5 million tax increment financing deal would be part of the package.

As the project neared its final approval stages, members of the carpenters union jammed an Economic Development Authority meeting and objected to Reuter Walton’s use of subcontractors. One of those past subcontractors – Ricardo Batres – was charged with labor trafficking, theft by swindle and insurance fraud.

The union has taken its criticisms to other cities where Reuter Walton is considering projects, including St. Paul, where an apartment complex was approved last month.

“Reuter Walton continues to profit off of these (subcontractors) that are engaging these violations repeatedly,” said Richard Kolodziejski, spokesperson for the carpenters union.

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Minnesota Building Trades Announce Plans to Fight Wage Theft, Exploitation, Labor Trafficking (MN)

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By Filiberto Nolasco Gomez
Workday Minnesota
July 26, 2019

BRAINERD
Leaders of 14 unions that represent Minnesota’s unionized construction workforce Thursday announced the launch of a new initiative to combat wage theft, exploitation, and labor trafficking, which they say pose a growing threat to the welfare of immigrant workers and the health of the state’s construction industry.

The Not On My Watch campaign will enlist union staff and rank-and-file members in efforts to identify cases of abuse, and to assist exploited construction workers. Union construction workers will be asked to wear hard-hat stickers that read “Not On My Watch” or “Ya No Mas” and participate in job-site actions to show solidarity with immigrant construction workers who may be vulnerable to exploitation by unscrupulous contractors.

“This initiative is about ensuring that no construction workers in our state are exploited and that all contractors are held accountable to the law,” said Jessica Looman, Executive Director of the Minnesota State Building and Construction Trades Council, “In Minnesota, workers stand-up for workers.”

Union members and nonunion workers joined forces last month at a rally to protest allegations of wage theft by immigrant concrete workers building the Digi-Key Expansion Project in Thief River Falls, Minnesota that was widely covered on TV and in print. A second major rally is planned for downtown Minneapolis on Monday, July 29, immediately before a Minneapolis City Council hearing on a proposed wage theft ordinance.

Minnesota Building Trades leaders were joined at the unveiling of their wage theft initiative by Attorney General Keith Ellison welcomed the announcement.

“Wage theft is theft, pure and simple. Not only does it rob workers of their ability to afford their lives, it robs them of their dignity,” Attorney General Ellison said. “It’s also often the canary in the coal mine for other serious abuses, like denial of healthcare and human trafficking, which we’ve seen right here in Minnesota. I’m proud that our new law against wage theft is the strongest in the country, but we in government can’t fight it alone. That’s why I’m grateful for the ‘Not On My Watch’ and ‘Ya No Más’ campaigns. It’s powerful that workers themselves will be on the front lines in helping us fight wage theft and helping all workers afford their lives and live with dignity and respect.”

Nancy Leppink, Commissioner of the Minnesota Department of Labor and Industry also welcomed the announcement. “The State of Minnesota is committed to combating wage theft, but we can’t do it alone,” said Commissioner Leppink. “We will need the help of labor, community leaders, responsible employers, and of course workers themselves, to make sure workers know their rights and can bring abuses to light.”

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ROCHESTER WAGE THEFT CASE IS THE FIRST INVESTIGATION UNDER A NEW LAW (MN)

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According to The North Central States Regional Council of Carpenters, worker exploitation is a common practice in the Med City.

Posted: Jul 9, 2019 7:22 PM
Posted By: Annalise Johnson

ROCHESTER, Minn. – A group of Rochester area workers are pursuing a wage theft claim against Ed Lunn Construction. Workers allege Ed Lunn Construction duped them out of thousands of dollars in wages after working the majority of 2018 on a $40 million, city-funded affordable housing project that’s now filling with residents.

Lunn denies legal responsibility and says a subcontractor employed the workers who are accusing him of wage theft.

A new bipartisan law went into effect July 1st aimed at cracking down on wage theft. It doubles the amount of state investigators working on wage theft cases. Violaters can face 5 years prison and a $10,000 fine. The law will be enforceable beginning August 1st.

KIMT spoke to Mike Wille, business agent for North Central States Regional Council of Carpenters. The union advocates for workers rights. He tells KIMT that a labor broker business model exploits workers. He says employees often work long hours without overtime pay and don’t receive workers compensation of unemployment insurance. “They don’t get paid for the work that they performed, or they’ll perform work and they’ll withhold the money and then they’ll pay them for the past work as they do work in the future, so it’s like they’re dangling a carrot in front of this person and the carrot is the money they’re owed,” he explains.

According to Wille, roughly 70% of apartments and hotels built in Rochester in the last five years are built under this business model. “Shirking their responsibilities back onto the employees helps them keep their costs down and enables them to basically cheat and win jobs from contractors that play by the rules,” he says.

Minnesota’s new wage theft prevention law is one of the strongest in the country. “I hope it sets a precedent and a standard across the country for all states and cities and counties to abide by because there is no place for this kind of practice anywhere in the United States,” says Wille. “We’re better than that and our workers deserve better than to be cheated out of their wages.”

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Minnesota to open wage theft investigations unit (MN)

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Written By: Tess Williams
Jul 16th 2019 – 12pm

Gov. Tim Walz signed a new law that invested $3.1 million to the Department of Labor and Industry to enforce wage and hour laws. The new law is designed to protect workers from exploitative employers who do not pay them for their work. The legislation adds criminal penalties for employers.

In turn, the attorney general formed a Wage Theft Unit to enforce the new law and litigate the cases. A press release from Attorney General Keith Ellison said wage theft includes “having hours shaved off your paycheck; being forced to work off the clock; not getting paid for overtime; being paid at a lower rate than promised, sometimes even below minimum wage; being paid in cash or other forms like gift cards, with no Social Security, unemployment or worker’s comp withheld; being misclassified as an independent contractor and more.”

Assistant Attorney General Jonathan Moler and investigator Ana Vergara will staff the unit. Any Minnesotan who has experienced wage theft can contact the attorney general’s office at 651-296-3353 or attorney.general@ag.state.mn.us.

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Evers announces members of worker misclassification task force (MN)

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By: Nate Beck
Jul 26, 2019

Gov. Tony Evers on Friday announced appointments to a task force that will examine worker misclassification and payroll fraud in Wisconsin.

The appointments come after Evers in April signed an executive order forming the group to re-examine how the state enforces misclassification – a practice believed to be rampant in the construction industry. The task force is charged with developing recommendations on the topic and reporting its activities and findings to the governor on or before March of each year.

“Individual agencies do a great job at combating this serious issue that adversely affects some of our most vulnerable workers, but through this task force, agency efforts will be better coordinated,” Evers said in a statement. “By evaluating each agency’s approach and investigation methods and sharing best practices, our efforts to support Wisconsin workers who are left without important safeguards like unemployment insurance and labor protections will be more strategic and coordinated.”

The task force will be staffed by the Department of Workforce Development and DWD Secretary-designee Caleb Frostman will serve as chair.

DWD’s Unemployment Insurance Division enforces worker misclassification and in 2018 conducted 2,459 audits of companies, identifying 8,877 misclassified workers. The agency last year collected more than $1.5 million in unemployment insurance taxes, interest and penalties.

“I am excited to chair this important task force and proud of the work that investigators have done and will continue to do to help eradicate worker misclassification,” said DWD Secretary-designee Frostman. “The goal of the task force is to give our front-line staff even more tools and strategies that they can employ as they continue their work to support the Wisconsin worker.”

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Fair Contracting Foundation of Minnesota and ILEPI Address Minnesota’s AG (MN)

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Minnesota’s Attorney General Keith Ellison invited Fair Contracting Foundation’s Mike Wilde and ILEPI’s Frank Manzo to present on the value of prevailing wages to nearly 400 public attorneys and regulators. The history and policy purpose behind prevailing wage laws was covered by FCF. The Illinois Economic Policy Institute’s Manzo gave the audience the findings of a recent study that examined 640 school bid packages. The academic study gave further empirical evidence to the audience of compliance professionals that the projects that required prevailing wages were no more costly than those projects that did not. Attorney General Ellison has already proven to be a champion of Minnesota’s workforce and FCF is encouraged by his commitment to prevailing wage laws.

 

                           

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Nessel exploring criminal, civil charges in payroll fraud cases (MN)

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By Derek Robertson
July 2, 2019

State Attorney General Dana Nessel announced Tuesday that her office could soon file criminal or civil charges against Michigan businesses accused of payroll fraud.
In a statement, a Nessel spokesperson wrote that by the end of the week her office “will have sent letters demanding business records to at least 10 businesses operating in Michigan and plans to use subpoenas and warrants in other cases to obtain vital information from Michigan-based businesses allegedly operating fraudulent payroll schemes.”

“No family should live in poverty because greedy businesses cheat the system and refuse to play by the rules,” Nessel said in her statement. “This has gone on for far too long and Michigan isn’t going to wait any longer to crack down on these crimes.”

When asked about the 10 businesses in question, Nessel spokesperson Kelly Rossman-McKinney told the Advance that the attorney general and her team are “not naming any names until we take formal action.”

In April, Nessel formed a “Payroll Fraud Enforcement Unit” to investigate claims of such fraud, which usually takes the form of employee misclassification, failure to pay overtime and outright wage theft. Her office said Tuesday that it’s received nearly 100 complaints since its launch.

…

A 2017 report from the liberal Economic Policy Institute said that between 2013 and 2015, payroll fraud cost Michigan residents more than $400 million. Nessel’s office cites that report and a 2009 study from Michigan State University that reported that misclassification costs the state $107 million a year in revenue through tax fraud.

The attorney general’s office said it’s collaborating in its investigation with the U.S. Department of Labor, the Internal Revenue Service, the Michigan Department of Treasury, the state’s Wage and Hour Bureau and its Unemployment Insurance Agency.

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Minnesota Wage Theft Bill with New Employer Requirements Takes Effect July 1 (MN)

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JD Supra
June 12, 2019

In one of the most significant pieces of legislation affecting employers in many years, the Minnesota Legislature passed, and Governor Walz signed, the Jobs and Economic Development Omnibus bill that includes new wage theft protections for employees and new requirements for employers. The wage theft bill is one of the few pieces of bipartisan employment legislation that survived the 2019 legislative session. The law constitutes a very significant change in wage payment requirements and enforcement. It includes increased civil enforcement and recordkeeping requirements for employers, as well as new criminal penalties for intentional wage theft. These changes will go into effect on July 1, 2019.

What is Wage Theft?

The Omnibus bill includes two separate areas of enforcement. The first area concerns civil enforcement of wage payments. It increases the penalties for failure to pay wages and creates certain notice and recordkeeping requirements. The second area concerns criminal penalties for intentional wage theft. While both areas are referred to colloquially as wage theft, the statutory definition of wage theft applies only to intentional wage theft under the criminal statute. The law, however, increases potential exposure for employers that do not pay employees properly.

Civil Enforcement

The bill allocates over $2 million annually to civil enforcement of wage theft issues through the Minnesota Department of Labor and Industry and the Attorney General’s Office. It provides greater enforcement mechanisms including the authority to inspect places of employment “without unreasonable delay” and gives the Commissioner of Labor the ability to obtain an inspection order from the court if the employer refuses. It also makes it a misdemeanor to hinder or delay the Commissioner in the performance of his duties.

The new law gives the Commissioner the right to interview non-management employees in private regarding matters under investigation. It also increases the penalty for repeat failures to provide the records required by the Department of Labor to $5,000 per repeated failure. The law gives the Department the ability to share data with other public agencies, including licensing agencies. The data sharing will likely have implications for government contractors that run afoul of these new requirements. Finally, the law includes a retaliation prohibition, which includes a private right to bring a lawsuit, as well as a civil penalty in an amount between $700 and $3,000 per violation.

Timing of Payment of Wages

The law amends Minnesota Statute § 181.101 regarding the timing of wage payments. The statute now explicitly includes salary, earnings, and gratuities within the types of wages that must be paid at least once every 31 days. The law also states that all commission earned by an employee must be paid at least once every three months. The law removes the 15-day cap on penalties for late payment of wages. The law now explicitly includes commissions in the types of wages that may be demanded for payment; if the commission is not paid within 10 days of a demand for payment, the Department may charge and collect the commission earned along with a penalty equal to 1/15 of the commissions earned but unpaid for each day beyond the 10-day limit.

Notice and Recordkeeping Requirements

The law requires that employers include additional information in the earning statements provided to employees at the end of each pay period. In addition to the information previously required under Minnesota Statute § 181.032, employers must now also include 1) the rate or rates of pay including the basis of that rate, i.e., whether the employee is paid hourly, by shift, day, week, salary, piece, commission, or other method; 2) allowances claimed pursuant to permitted meals and lodging; 3) the physical address of the employer’s main office or principal place of business including a mailing address if different; and 4) the employer’s telephone number.

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Lawmakers to vote to make wage theft a felony crime in Minnesota (MN)

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Law also increases state’s budget for enforcement.

By Stephen Montemayor
MAY 23, 2019 – 8:40PM

Minnesota lawmakers and labor groups hailed a bipartisan agreement Thursday to hold employers responsible for holding back workers’ wages, one of the nation’s firmest policies to beat back wage theft.

For the first time, refusing to pay workers would be a felony under an agreement lawmakers plan to vote on in special session. The law would also broaden the state’s ability to prosecute employers in an effort to prevent the loss of an estimated $12 million in unpaid wages from roughly 39,000 Minnesota workers each year.

“In my view it’s the best piece of policy legislation that’s going to pass and I’m very happy about it,” Attorney General Keith Ellison said in an interview Thursday.

Under the new law, wage theft in excess of $1,000 would become a felony crime. It would also penalize retaliation against employees who report wage theft. It also boosts the Department of Labor and Industry’s budget by nearly $4 million to expand prevention and inspection efforts.

Labor and Industry Commissioner Nancy Leppink, who called for the new law and increased resources to enforce it, praised the deal on Thursday.

“The Wage Theft law will level the playing field for Minnesota employers who both play by the rules and create decent jobs for their workers,” Leppink said in a statement Thursday. “The law will also ensure workers receive the wages they have earned.”

The issue emerged as a leading priority for House Democrats early this session and was also backed Sen. Eric Pratt, a Prior Lake Republican. Ellison and Leppink also called for new legislation criminalizing the practice. Wage theft can occur when employers don’t compensate workers through measures like failing to pay overtime, misclassifying employees as independent contractors or declining to pay them outright.

Despite early disagreements on how to craft the law in a way that protected both workers and Minnesota businesses, Pratt and state Rep. Tim Mahoney, DFL-St. Paul, the bill’s House sponsor, managed to strike a deal that was acceptable to state officials and labor groups.

“A couple things we always agreed on is if you earn a wage you should be paid a wage – that was the underlying value statement that we shared which really enabled us to work on this together,” Pratt said. “Every job has its dignity and we need to be able to make sure that every Minnesota worker is treated with dignity.”

Mahoney added that stronger wage theft laws and enforcement would also benefit businesses that find themselves undercut by competitors who can get by with illegally failing to pay their workers. He took issue with language in the bill’s criminal section that requires proof of “intent to defraud,” which he said can be very difficult to prove in many cases.

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Q&A: Former Commerce chief returns to a familiar role (MN)

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Brian Johnson
April 19, 2019 at 1:17 PM

After a couple of high-profile jobs in state government, Jessica Looman has returned to her roots in the construction trades.

Looman recently spoke with Finance & Commerce about issues such as the construction labor shortage, efforts to bring more young people into the construction industry, and wage theft. …

You previously served as general counsel for the laborers’ union. Did it feel like a homecoming when you took over as executive director of the Minnesota Building and Construction Trades Council?

Yeah, a lot of people have been welcoming me back, which has been really fun. I started my professional career in the labor movement – first in Washington, D.C., and then here in Minnesota. And then I went to law school and when I got out of law school, I became the general counsel for the Laborers District Council of Minnesota and North Dakota, which is the construction craft laborers union. That was a wonderful experience.

I think the combination of my work as general counsel for one of the larger building trades unions, and then particularly the great experience I got as a public servant in Minnesota, really brought me to where I am today.

What are some of your priorities as executive director?

We want to continue to develop public and private investment in infrastructure and construction. We see that we have a role in economic development of Minnesota, our communities and our economy. That includes growing our construction services sector.

The second goal is, how do we make sure we are bringing new people into the construction industry and the construction trades? And how do we make sure we are increasing our diversity, increasing our inclusion?

We currently have about 10,000 registered apprentices that are participating in building trades apprenticeship programs. About 20 percent of those are people of color. That is something we have been focusing on and trying to increase. And we continue to work in the space around workforce development. That includes increasing the number of women in the construction trades.

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