Oregon Launches Investigation into Hillsboro Wage Theft Case

Wednesday, February 04, 2015

Cornelius Swart, GoLocal PDX Director of Content


The State of Oregon has opened an investigation into a Hillsboro company accused of stealing worker’s wages on a series of taxpayer funded construction projects that date back as far as 2011.

The Oregon Bureau of Labor and Industry launched a formal investigation into Cornerstone Janitorial last year after GoLocalPDX reported that several former workers claimed they had been denied their full legal wages on a handful of publicly funded construction jobs.

Last year, Hoffman Construction, a general contractor that hired Cornerstone, filed two complaints against the firm for work it did on the Oregon State Hospital in Junction City and an underground parking garage at Portland Community College Cascade Campus in North Portland. BOLI then launched separate investigations into three other projects that Cornerstone worked on over the last four years.

Jose Tandy, a Mexican immigrant and resident of Southeast Portland, has told GoLocalPDX that he was paid an average of $12 an hour for jobs with state-mandated wages of $36. Tandy presumed that Cornerstone owner, Sang Nam, pocketed the difference.

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Businessman David Emami must pay workers more than $512K for ‘scheme’ to avoid paying overtime

U.S. Department of Labor       Date: February 2, 2015

Wage and Hour Division          Release Number: 15-13-SAN


PORTLAND, Ore. — A federal court has ordered local developer David Emami and three of his affiliated companies to pay 33 Portland-area employees $512,290 in unpaid wages and liquidated damages. The U.S. District Court for the District of Oregon agreed with a U.S. Department of Labor investigation that found that Emami and companies Oak Grove Cinemas Inc., Barrington Management LLC and Barrington Venture LLC willfully violated the overtime and record-keeping provisions of the Fair Labor Standards Act. The court also held that Emami violated the anti-retaliation protections of the FLSA by threatening employees who cooperated with the department’s investigation.

“Those who flagrantly disregard basic wage obligations and then try to cover up those actions should think twice before threatening workers when they simply exercise their right to be paid fairly, as the law requires,” said Janet Herold, the department’s regional solicitor in San Francisco. “This judgment makes clear that we will not allow employers to violate the law and then try to bully their way out of trouble.”

The department concluded that those Emami employed as general maintenance, landscaping and construction workers at commercial properties he owned or maintained had two time cards for most pay periods. On one time card, an employee recorded their morning start time and a midafternoon end time. The employees immediately clocked in on a second time card to record the remainder of a day’s work hours. The workers’ duties and rates of pay remained the same each day at each work location.

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US Labor Department recovers more than $87K in unpaid wages, overtime for 39 workers on federally funded construction project in Portland, Oregon

U.S. Department of Labor        Date: January 28, 2015

Wage and Hour Division          Release Number: 14-2311-SAN

PORTLAND, Ore. — Sierra Construction Co. Inc. has agreed to pay $87,239 in back wages to 39 employees who worked on The Prescott apartment building, a federally financed construction project in Portland. U.S. Department of Labor investigators found that Sierra and two of its subcontractors failed to pay the prevailing wages required by the Davis-Bacon and Related Acts.

The department’s Wage and Hour Division determined that Sierra, the general contractor, violated the DBRA by improperly classifying workers in lower-paying positions that did not reflect all duties performed by the employees. For example, on the project carpenters and laborers spent significant time working as ironworkers, but were not paid the proper rate, which can be $7 to $15 more per hour than they were typically paid. Sierra also failed to include information listing the required DBRA wage rates in contracts with two subcontractors, who then failed to pay their employees the required prevailing wages.

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Wage Theft – How companies steal from our employees and communities



Ben Basom of the Pacific Northwest Regional Council of Carpenters gives the example of a worker who came forward and started talking to the union about the Portland company that he was working for and the scams he was seeing. Basom says the employee’s boss found out “and the next time we saw him, his arm was in a cast and he was all bruised up.”

The worker said, “This guy knows where my family is in Mexico.”

From July 2012 to June 2013, Oregon workers filed claims for more than $3 million in unpaid wages with the Oregon Bureau of Labor and Industries. Juan Carlos Ordonez of the Oregon Center for Public Policy (OCPP), which analyzed BOLI’s data on the claims, says that’s “just the tip of the iceberg” because workers fear retaliation if they complain about their missing wages, or they simply don’t know how or where to file a complaint. BOLI is the agency that investigates and enforces Oregon’s labor laws.

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Local Company Pockets Worker’s Wages, Tax Dollars, Whistleblowers say

Monday, October 27, 2014
Cornelius Swart, GoLocal PDX Director of Content


A local janitorial company that has worked on publicly-funded projects has been shortchanging its workers and pocketing their wages, according to the claims of whistleblowers.

Wage theft complaints against Cornerstone Janitorial Service of Hillsboro have been filed in Oregon and Washington and whistleblowers allege that the company hires undocumented immigrants and takes taxpayer-funded wages that rightfully belong to workers.

In response, Cornerstone tells GoLocalPDX it only hires legal residents and pays the proper wages.

But an investigation by GoLocalPDX has found that in some cases workers are only paid $12 an hour on jobs that should have been compensated at an hourly rate of $36.

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Hillsboro businessman convicted of tax evasion

By Brent Weisberg
Published: September 30, 2014, 8:05 am

PORTLAND, Ore. (KOIN 6) – A 53-year-old man was ordered by a federal judge to pay the Internal Revenue Service (IRS) close to $500,000 and spend a year and a half in federal prison after pleading guilty to federal tax evasion.

Stephen Gregory Nagy was the former president of Hillsboro-based S&S Drywall Assemblies. According to the United States Attorney’s Office, Nagy’s company produced drywall services from January 2005 through September 2011.

The IRS assessed the company $481,519 in federal employment taxes, penalties and interest for between June 2009 and September 2010. Nagy met with the IRS and committed to a plan to pay the past due payroll taxes for his company, but investigators said he decided not to comply with the payment play and engaged “in a variety of interrelated fraudulent schemes to evade the payment of the delinquent payroll taxes.”

Investigators learned that he started conducting extensive business transactions in order to hide funds from the IRS. He obtained cash by illegally hiring undocumented workers to work on prevailing wage jobs, paying them a small portion of the prevailing hourly rate and demanding that they kick back the largest part of their wages to him in cash, court documents state. Nagy failed to report the case to the IRS.

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Labor Bureau Recovers Lost Wages

The Oregon Bureau of Labor and Industries has secured more than $20,000 for 10 workers for a Salem contractor not paid wages to which they were entitled on a Pearl District park project.

The overtime and prevailing wage violations stem from work performed by Salem contractor Green Thumb Landscaping on The Fields Neighborhood Park in Portland’s Pearl District. Green Thumb Landscaping was a subcontractor on the public works project.

During investigation, Green Thumb initially refused to provide investigators with documents necessary to determine the accuracy of the workers’ claims. The bureau subpoenaed Green Thumb to provide it with the material, including payroll records and contact information for potentially affected employees.

The wages recovered represent the latest unlawful practice from the contracting firm. The bureau has secured more than $70,000 in unpaid wages from Green Thumb Landscaping and Maintenance, Green Thumb Yard Maintenance Inc., Green Thumb LLC and Green Thumb and Maintenance Inc. for previous wage and hour violations.

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Redmond Contractor Fined For Wage Violations, Barred From Public Contracts

State labor regulators ordered a Redmond contractor to pay $13,600 in penalties, after concluding the company violated prevailing wage laws.

The Oregon Bureau of Labor and Industries also barred Hard Rock Concrete Inc. and the company’s president from public works projects for three years.

The labor agency announced the penalties Friday. Hard Rock Concrete president Rocky Evans has not yet responded to a message left by The Oregonian regarding the penalties.

Investigators found that seven Hard Rock Concrete contractors were underpaid roughly $8,900 for concrete work at Hillside Elementary School in Eagle Point. The business did a poor job of keeping records and filed incorrect payroll data, according to the state.

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Oregon Senate Okays Bill Requiring Prevailing Wage

The Senate passed a bill Tuesday that will require contractors who do business with the Oregon University System to follow prevailing wage laws. House Bill 2646 received a 27-2 vote and will head to the House for approval. Oregon is one of 32 states to have a state-level prevailing wage, which is required on all state and local building projects. House Bill 2646 adds universities projects to the list.

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