Dana Nessel, in a nod to Michigan workers, creates payroll fraud unit (MI)

Posted by National Alliance for Fair Contracting on

April 22, 2019
Lindsay VanHulle

Attorney General Dana Nessel on Monday said she will step up investigations of Michigan companies that don’t pay full wages and benefits to their employees.

The announcement is in keeping with her campaign promise to protect workers and labor unions. The event featured a number of union workers and Democratic lawmakers, but no Republicans, the majority party in the state House and Senate.

Nessel, a Democrat, is creating a payroll fraud enforcement unit within the Attorney General’s office to investigate such claims as wage theft, lack of overtime pay and misclassifying workers as independent contractors rather than employees.

The unit will be led by Zachary Risk, an assistant state attorney general, and housed within the office’s labor division. It will coordinate with other state departments and agencies – for example, the Department of Licensing and Regulatory Affairs’ Wage and Hour Division, or the Unemployment Insurance Agency – to investigate complaints against companies.

“These are companies that fraudulently report employees as self-employed and independent contractors, or they’re paying workers under the table,” Nessel said during a news conference in Lansing to unveil the payroll fraud unit.

“They refuse to pay overtime, benefits, health insurance and workers’ compensation. And because they cheat on time cards to keep costs off the books, they’re not paying their taxes,” Nessel said. “The majority of Michigan companies play by the rules, but those who don’t are cheating the system, raking in unfair profits and hurting Michigan in the process.”

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Financial Fraud and Wage Theft Continue to Plague Construction Industry

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Cases of fraud and wage violations continue to soil the image of the construction industry during this labor shortage

FEBRUARY 28, 2019

Every week there seems to be yet another item in the news about contractors being charged with fraud, wage theft and more. This week is no different, unfortunately.

…

Meanwhile in Massachusetts, a state that has been under scrutiny for construction wage theft, Attorney General Maura Healy issued 165 civil citations against 66 construction companies in 2018. According to a press release from the Attorney General, restitution in 2018 exceeded $1.47 million for more than 1,030 employees, and the companies were fined more than $1.23 million.

Wage Theft Big Problem in Massachusetts Construction Industry

Violations included:

  • Failure to page proper wages
  • Failure to pay overtime
  • Retaliation
  • Failure to furnish records for inspection
  • Failure to pay prevailing wage
  • failure to submit true and accurate certified payroll records
  • Failure to register and pay apprentices appropriately

“Workers in the construction industry are particularly vulnerable to wage theft from dishonest contractors who cheat their workers,” said AG Healey. “As Massachusetts undergoes a historic construction boom, my office will continue to fight for exploited workers and ensure they are paid the wages they earn.”

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Financial Fraud and Wage Theft Continue to Plague Construction Industry

Posted by National Alliance for Fair Contracting on

Cases of fraud and wage violations continue to soil the image of the construction industry during this labor shortage

The National Law Review
FEBRUARY 28, 2019

Every week there seems to be yet another item in the news about contractors being charged with fraud, wage theft and more. This week is no different, unfortunately. 

In Arkansas, Matthew Beasley, President of Cobas, Inc. construction company in Conway, AK, was sentenced to 36 months in federal prison for defrauding a bank by creating fraudulent invoices. According to the Unisted Sates Department of Justice press release, Cobas would perform construction work for other companies and send invoices for that work.

…

Meanwhile in Massachusetts, a state that has been under scrutiny for construction wage theft, Attorney General Maura Healy issued 165 civil citations against 66 construction companies in 2018. According to a press release from the Attorney General, restitution in 2018 exceeded $1.47 million for more than 1,030 employees, and the companies were fined more than $1.23 million.

Violations included:

  • Failure to page proper wages
  • Failure to pay overtime
  • Retaliation
  • Failure to furnish records for inspection
  • Failure to pay prevailing wage
  • failure to submit true and accurate certified payroll records
  • Failure to register and pay apprentices appropriately

“Workers in the construction industry are particularly vulnerable to wage theft from dishonest contractors who cheat their workers,” said AG Healey. “As Massachusetts undergoes a historic construction boom, my office will continue to fight for exploited workers and ensure they are paid the wages they earn.”

(Read More)

Supes Unanimously Approve $500K For Office Protecting Workers’ Rights (CA)

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Bay City News Service
Published 6:44 pm PST, Tuesday, February 12, 2019

The Santa Clara County Board of Supervisors voted unanimously to stand with workers who have experienced wage theft or abuse from their employers by increasing the budget of its enforcement office by $500,000 on Tuesday. 

The decision brings the Office of Labor Standards Enforcement’s overall funding to $1 million, which will be directed toward multilingual workers’ rights trainings, individual interviews for workers who report abuse and greater partnerships with community-based rights organizations. 

The training curriculum may include education on human and labor trafficking, wage theft, sexual assault, sexual harassment, and retaliation, as the office moves toward expanding its purview in these areas. 

The office was established in November 2017, but many workers argued its scope was limited. Some individuals said they had won settlements against their employers, but the money had not yet been awarded to them due to a lack of enforcement. 

The supervisors’ vote begins to address funding for both issues. 

“This decision will have a major impact on wage theft in Santa Clara County and help to protect workers from wage theft, human trafficking and sexual assault,” Derecka Mehrens, executive director of Working Partnerships USA, said in a news release. 

Smaller local organizations, such as those directed to Vietnamese, Filipino and Chinese-American communities, will be able to work with the county to identify industries that frequently violate the law.  

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City of Industry construction firm fined nearly $12 million for wage theft (CA)

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The violations impacted more than 1,000 workers at projects in Los Angeles and Orange counties

By KEVIN SMITH PUBLISHED: February 11, 2019 at 5:11 pm

A City of Industry construction firm has been fined nearly $12 million in what state regulators are calling the biggest wage theft violation ever by a private company in California.

The state Labor Commissioner’s Office announced Monday, Feb. 11 that it cited RDV Construction Inc. for violations that left more than a thousand workers waiting weeks or months to be paid, only to receive a portion of what they were owed.

The company hired crews to provide framing, drywall and other trade work for hotels, apartments and mixed-use buildings around Southern California.

A litany of violations

Investigators determined that between 2014 and 2017, RDV employed more than 1,000 workers at 35 construction sites scattered primarily throughout Los Angeles and Orange counties and typically worked its crews nine hours a day without proper rest breaks or overtime pay.

The company “habitually and illegally” withheld up to 25 percent of the wages workers earned, investigators said, and during a 21-month period, they were paid with checks that bounced due to insufficient funds.
RDV projects have included the Crown Apartments complex in West Hollywood and Boardwalk by Windsor, an upscale apartment community in Huntington Beach, among others.

…

“Dodging labor laws and stealing wages hurts workers and creates unfair conditions for law-abiding employers,” California Labor Secretary Julie A. Su said in a statement. “Stealing earned wages from workers’ pockets is illegal in California and this case shows that employers who steal from their workers will end up paying for it in the end.”

The citations total $11,943,054 payable to workers in unpaid wages and premiums…

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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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DRYWALL CONTRACTOR FINED $2 MILLION; IS CALIFORNIA WAGE THEFT RAMPANT? (CA)

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By Jane Mundy
August 10, 2018

THE CALIFORNIA LABOR COMMISSIONER’S OFFICE FINED A DRYWALL COMPANY $2 MILLION FOR WAGE THEFT-SPECIFICALLY FAILING TO PROPERLY COMPENSATE WORKERS FOR REST PERIODS, OVERTIME AND SOME WORKERS FOR NOT PAYING MINIMUM WAGE.

Los Angeles – After workers at Fullerton Pacific Interiors Inc., complained about California labor law violations to the non-profit Carpenters Contractors Cooperation Committee, the California Labor Commissioner’s Office stepped in. Investigators found that the drywall company paid a daily rate that didn’t include overtime hours or rest breaks and 28 workers were not even paid minimum wage. Fullerton was fined nearly $2 million for wage theft violations.

The work included taping and drywall installation at hotels, recreation centers and casino projects in Los Angeles, Orange and San Bernardino counties between August 2014 and June 2016. According to the citation, Fullerton failed to properly compensate 472 workers for rest periods and 289 workers were not paid for overtime, along with other wage violations. California state Labor Commissioner Julie Su said in a statement that, “In construction, unscrupulous contractors attempt to obscure their wage theft by paying workers a flat rate rather than for all hours worked. But a daily or other flat rate system does not take the place of minimum wage and overtime obligations.”

THE $2 MILLION FINE

This is how the wage theft fine was calculated. $1,892,279 payable to the workers was broken down as follows:

* $798,664 for rest period violations. Most workers in California are entitled to a paid 10-minute break for every four hours worked, or paid for an extra hour at their regular rate. Fullerton’s workers were allowed a 30-minute lunch “hour” but did not receive rest breaks.

* $386,685 for unpaid overtime.

* $692,500 for wage statement violations.

* $14,431 for the unpaid wages, liquidated damages and waiting time penalties. Workers paid less than minimum wage are entitled to liquidated damages that equal the unpaid wage plus interest. There are also penalties for waiting times that are calculated based on taking the employees wages and multiplying it by the days they waited for compensation, at a maximum of 30 days.

* $72,400 civil penalty: The company would also be on the hook for civil penalties of $50 per work day for the initial violation, which increases to $100 for subsequent pay periods.

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Aldermen, labor renew push for fair work week ordinance (IL)

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05/10/2018, 07:09pm
By Fran Spielman

Armed with a new study that shows the devastating impact of “just-in-time scheduling,” a coalition of alderman and union leaders on Thursday made a renewed push for a “fair work-week” they called a “basic human rights issue.”

The City Council has approved three ordinances over the last five years aimed at confronting income inequality in Chicago.

They are: the anti-wage theft ordinance of 2013; the 2014 ordinance that raised Chicago’s minimum wage to $13-an-hour by 2019 and the ordinance mandating companies large and small – with the exception of construction companies – to provide their employees with at least five paid sick days each year.

But until workers have stable schedules – or guaranteed compensation if they don’t – the City Council’s “work is not done,” according to retiring Ald. Ameya Pawar (47th).

Pawar pointed to a survey of 1,700 workers across the state, 44 percent of them in Chicago, conducted by the University of Illinois and Penn State University.

One of every five hourly workers reported being scheduled for on-call shifts “regularly or often.”

Thirty-five percent of all workers have less than one week’s advance notice of their schedule, with 22 percent having three days or fewer notice. More than 25 percent of those surveyed are required to keep their schedules “open” with no guarantee of work.

Nearly 20 percent receive their work schedules, only after traveling to their workplaces.

“Imagine what it’s like not knowing whether you have to work in two hours. Imagine what it’s like not knowing what your schedule is like until the day before the week begins. Imagine what it’s like not knowing how you would arrange for child care if you’re working 12-to-8 on one day and 7-to-3 the next,” Pawar told a City Hall news conference.

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Laborers on a ‘Billionaires’ Row’ Tower Cheated of Wages, D.A. Says (NY)

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By James C. McKinley Jr.
May 16, 2018

The laborers were doing concrete work on the luxury Steinway Tower at 111 West 57th Street, a needlelike skyscraper set to open next year full of condominiums for some of the world’s wealthiest people. But the company employing the $25-an-hour workers, the authorities said, was cheating them out of hundreds of thousands of dollars in wages by purposely shorting their hours and failing to pay them overtime.

The Manhattan district attorney, Cyrus R. Vance Jr., said on Wednesday that the company, Parkside Construction, and its affiliates stole more than $1.7 million in wages over three years from about 520 workers at the tower and seven other high-rise buildings. The company also hid nearly $42 million in wages from state insurance officials to avoid paying millions in workers’ compensation premiums.

Many of the cheated workers were undocumented immigrants from Mexico and Ecuador, Mr. Vance said. When the workers complained, they were falsely told the money would be in their next check or were encouraged to find work elsewhere.

At a news conference announcing the arrests, Mr. Vance said the victims were especially vulnerable to exploitation because they were not in unions and did not have immigration papers. “Often it’s the very people who are tasked with building this great city who are the most vulnerable to fraud from their managers and employers,” Mr. Vance said.

Parkside Construction and its co-owners – Francesco Pugliese, 39, and Salvatore Pugliese, 46 – were charged with grand larceny, insurance fraud and scheme to defraud. Also charged in the scheme were Parkside’s construction foreman, James Lyons, 54; its payroll manager, Yenny Duarte, 42; an outside accountant, Michael Dimaggio, 58; and the owner of a Michigan payroll company, Jerry Hamling, 57. The Pugliese family’s companies made more than $100 million off the masonry and concrete contracts for the eight buildings.

“This was a business model for these defendants,” Mr. Vance said.

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