Senator Lewis: We Need To Do More to Stop Wage Theft

It is estimated that nearly $700 million is not paid to about 350,000 mostly low-wage workers each year in Massachusetts.

By Bob Holmes (Patch Staff)
Updated Oct 6, 2017 2:12 pm ET

An Op-Ed Column from Senator Jason Lewis and Representative Paul Brodeur:

Earlier this year, at the start of the new legislative session, we were pleased to be appointed by the Senate President and House Speaker, respectively, to co-Chair the Joint Committee on Labor and Workforce Development. Together, we have since immersed ourselves in a wide range of labor and employment issues in the Commonwealth. We have held committee hearings on proposed legislation, met with many different stakeholders to hear their concerns and feedback, and conducted research on policies and best practices around the country.

One particular issue that may surprise many people is the serious problem of wage theft. Wage theft is a collective term for any denial of wages or benefits that are rightfully owed to an employee. The most common wage theft violations in Massachusetts are non-payment of wages, failure to keep true and accurate records, failure to pay the proper overtime rate, child labor violations, failure to pay minimum wage or tips, and failure to pay prevailing wage. Other violations include failure to submit accurate payroll records, earned sick time violations, and improper classification of employees as independent contractors.

Just how pervasive is wage theft? It is estimated that nearly $700 million is not paid to about 350,000 mostly low-wage workers each year in Massachusetts. In addition to the harm this inflicts on struggling working families, it also cheats the state out of greater economic activity, jobs, and tax revenue.

The Attorney General’s Office (AGO) is the state’s primary enforcer of laws relating to wages. Enforcement is carried out by attorneys and investigators in the AGO’s Fair Labor Division (FLD). In Fiscal Year 2017, the FLD received 16,684 calls and 5,604 complaints, and opened 607 cases related to wage theft. The FLD ordered employers to pay more than $6 million in restitution and more than $2.6 million in penalties. This is more than double the restitution ($2.6 million) and about triple the penalties ($900,000) from Fiscal Year 2016. The FLD also cited or settled 27 earned sick time cases, totaling $160,000 in restitution and penalties. And, the FLD issued 47 citations to 46 employers and assessed more than $270,000 in penalties for child labor law violations.

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Wage Theft Charged At Farnam Court (CT)

by ALLAN APPEL | Oct 6, 2017 8:35 am

A “fat cat” in a plush three-piece suit dangled and strangled a working guy in a yellow construction helmet on Grand Avenue the other day.

The cat and worker were 15-foot-tall cartoon characters full of compressed air and bobbing in the breeze. But the display was no joke no joke. The blow-up figures were deployed Thursday afternoon by members and supporters of the New England Regional Council of Carpenters (NERCC) in support of Terail Slaughter, a non-union carpenter who had been employed helping to build the tower buildings of the Housing Authority of New Haven’s Farnam Court Townhouses rebuilding project.

About a dozen carpenters and their supporters were on the corner of Grand Avenue and Hamilton Street for two purposes, according to lead organizer Ernest Pagan: to support a wage theft complaint, and to encourage other workers to step forward and make similar complaints when necessary.

The Complaint

Slaughter has lodged an $18,000 wage theft complaint against Palmucci Rivera Construction Concepts (PRCC), a carpentry subcontractor managed by Haynes Construction. The Seymour-based company is a general contractor on the $42 million redevelopment project of the 75-year-old troubled housing complex.

The complaint, which was filed with the state Department of Labor in mid-summer, documents that Slaughter, a nine-year veteran carpenter who had also been a starting guard at Wilbur Cross, was paid $14 an hour. The “prevailing wage” – that is, the nationally mandated wage for a carpenter in Connecticut working on a publicly funded project, is $56 an hour.

Slaughter began work in January 2016. In April he met Pagan, who had come to fact-find and organize. Pagan urged Slaughter to ask for a more appropriate salary. Slaughter eventually took the advice, and PRCC, without acknowledging wrongdoing, raised his hourly wage to $46.

That, however, is the prevailing wage for a laborer, not for a carpenter. This alerted Pagan that, in addition to theft of wages directly, PRCC’s move was misclassifying Slaughter into a lower-paying category than he deserved.

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House, Senate Democrats Move to Prevent Wage Theft (MI)

Hardworking men and women deserve full amount they’ve earned

Monday, October 30, 2017

LANSING – House and Senate Democrats announced their plan to Prevent Wage Theft today to make sure workers get what they’ve earned. A report from the Economic Policy Institute earlier this year found that Michigan workers across all demographic groups are losing $429 million every year as a result of wage theft. It’s been almost 40 years since Michigan updated many of the state’s laws to protect workers’ pay.

“When we’re talking about nearly half a billion dollars being taken from workers’ paychecks illegally, it’s clear the system is broken,” said state SenatorJim Ananich (D-Flint). “These folks are playing by the rules and trying to provide for themselves and their families. We need to do right by them and bring our laws into the 21st century.”

Data from the EPI report show that 17 percent of low-wage workers in Michigan have experienced wage theft, which includes paying less than minimum wage, failing to pay overtime, working off the clock, confiscating tips, misclassifying employees as independent contractors, or even failing to pay workers at all. Earlier this year, FOX 17 reported the story of 24 West Michigan carpenters who hadn’t been paid $35,000 that a construction company owed them. They had bank accounts frozen, couldn’t afford family medical expenses and even lost their cars.

In addition to holding back Michigan’s workers and its economy by keeping hundreds of millions of dollars out of pocketbooks around the state, law-abiding businesses are at a disadvantage to the bad actors who increase their profits by stealing from their employees.

“When Michigan’s workers do better, our whole state benefits. Sadly, a handful of bad actors are holding us back to the tune of nearly half a billion dollars per year and our state isn’t doing enough to help,” said House Democratic Leader Sam Singh (D-East Lansing). “Democrats are stepping up to ensure that hardworking Michigan workers get what they earn and that everyone plays by the same rules.”

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Sen. Wirch’s bill takes aim at ‘wage theft’ (WI)

Tuesday, October 26, 2017

MADISON – Whether it’s not being paid for overtime, forcing employees to work off the clock or violating minimum wage laws, wage theft is an issue for employees across the country and some new legislation in Madison is looking to reduce the problem.

State Sen. Bob Wirch, D-Somers, testified at a public hearing on Thursday in support of Senate Bill 371, which he hopes will have a positive impact for workers, if passed.

“The changes I am proposing are reasonable solutions that will address some of the legal loopholes that have allowed this practice to grow, level the playing field for the many business owners who play within the rules and take care of their employees,” Wirch said.

The proposed law would penalize employers who violate their workers rights starting with a $500 fine for the first violation, $750 for the second violation and $1,000 for every violation after that.

Wirch said he’s hoping to have bipartisan support for the bill and that it will be voted on before the end of the session

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Federal lawmakers seek to crack down on wage theft

By Mark Gruenberg, Press Associates Union News Service
August 20, 2017


Saying too many bosses steal workers’ wages, congressional Democrats introduced legislation to crack down on wage theft, through stiff fines, enabling worker class action suits, and, in the worst cases, threats of criminal prosecution.

The measure is designed to particularly help low-wage workers, the lawmakers said. But overall, citing Economic Policy Institute data, they said employers steal at least $15 billion yearly from workers.

“Today, across the country, many people are putting in long hours on the job and working hard for an honest day’s pay, only to have their employers cheat them out of their wages,” said Senate co-sponsor Ed Markey, D-Mass.

“While the vast majority of employers do the right thing and treat workers fairly, too many others force their workers to work off the clock, refuse to pay workers the minimum wage, deny workers overtime pay even after they work more than 40 hours a week, steal workers’ tips, or knowingly misclassify workers to avoid paying fair wages.

“This bill will strengthen fundamental protections to allow workers to get the money they have earned through hard work and it will crack down on the corporations that subject workers to these abuses. These steps will help ensure our country can work for all Americans, not just the wealthiest few, so our economy grows from the middle out, not the top down,” he added.

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Newly available wage theft data shows nearly 130 Colorado employers with violation (CO)

Adrian D. Garcia
August 24, 2017

The state of Colorado is starting to name companies that steal wages from their employees, ending decades of businesses being able to shield their identities under claims of trade secret protections.

Nearly 130 employers have been ordered to pay employees $547,780.90 in back pay and penalties since April 13. The companies were also ordered to pay the state another $170,750 in fines in connection with wage-law violations, according to the data shared Monday by the Colorado Department of Labor and Employment.

The new transparency around wage theft violations comes after a Rocky Mountain PBS investigation into Colorado’s wage-theft secrecy in 2015 highlighting how “you can’t know if your favorite bar stiffs its servers” or “if your future employer cheats its workers” because a state law from 1915 allowed companies to keep their wage law violations from the public by claiming the information contained “trade secrets.”

In 2016, state Rep. Jessie Danielson of Wheat Ridge and former state Sen. Jessie Ulibarri of Commerce City, both Democrats, attempted to change the law. They were unsuccessful.
This spring, Danielson tried again. She partnered with state Sen. John Cooke, a Greeley Republican, and ultimately got through the Wage Theft Transparency Act.

The act, signed into law by Gov. John Hickenlooper in April, clarifies that wage law violations are not confidential and should be released to the public. The state still has the ability to withhold some information like an employer’s exact vacation policy if the company can successfully show why the info is a trade secret and shouldn’t be released to the public.

“These companies, in theory, without this new law could continually commit wage theft and continually cheat and steal from their employees,” Danielson said. “This is is the kind of legislation that will protect workers all across the state.”

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Labor Commissioner’s Office Files $6.3 Million Misclassification and Wage Theft Lawsuit against Glendale Construction Company (CA)

PR Newswire

Aug. 14, 2017, 01:55 PM

LOS ANGELES, Aug. 14, 2017 /PRNewswire-USNewswire/ — The Labor Commissioner’s Office has filed a lawsuit against Calcrete Construction, Inc. seeking $6,300,338 for multiple wage theft violations affecting a group of 249 construction workers and the willful misclassification of 175 workers as independent contractors.

An investigation launched in October 2016 uncovered the Glendale-based company’s failure to pay the workers for overtime hours, allocate pay for sick leave and provide proper wage statements. The lawsuit, filed in Los Angeles Superior Court, also seeks civil damages and penalties.

Beginning in August 2016, Calcrete forced its workers under threat of termination to sign contracts stating they were independent contractors. The company then used staffing agencies Dominion Staffing and Southeast Personnel Leasing to pay the workers.

“It is illegal for employers to use subcontractors to distance themselves from the obligation to pay workers, and we will use every tool to dissuade employers from this scheme,” said Labor Commissioner Julie A. Su. “This lawsuit aims to recover the money these misclassified workers should have been paid after years of wage theft.”

Calcrete employees typically worked 10-12 hours Monday through Friday and eight hours on Saturday. They were paid only their regular hourly rate and not for the 18-28 hours of overtime they regularly worked. This underpayment occurred for a nearly two- year period from 2014-16, the lawsuit specifies.

The lawsuit seeks:
  • Wages and damages of approximately $2,596,438 payable to the workers:
    • $352,000 in overtime wages
    • $1,244,438 in waiting time penalties
    • Over $1,000,000 (specific amount to be determined at trial) for unpaid sick leave and liquated damages
  • Penalties of approximately $3,703,900 payable to the state:
    • $2,625,000 in statuary penalties for willful misclassification
    • $78,900 in civil penalties.
    • Over $1,000,000 (specific amount to be determined at trial) for failure to provide proper wage statements

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Labor Commissioner’s Office Cites Oakland Construction Company Over $3.5 Million for Wage Theft Violations (CA)

California Department of Industrial Relations
Jul 25, 2017, 15:43 ET

OAKLAND, Calif., July 25, 2017 /PRNewswire-USNewswire/ — The Labor Commissioner’s Office cited an Oakland contractor more than $3.5 million in wages and penalties for multiple wage theft and labor law violations. Attic Pros is ordered to pay $2,109,480 in wages, liquidated damages and waiting time penalties for 119 workers who were misclassified as independent contractors, and $1,481,600 for civil penalties.

“This is an egregious case of wage theft, with workers misclassified and denied a just day’s pay,” said Labor Commissioner Julie A. Su. “My office enforces California’s labor laws to stop employers willing to cheat employees of their pay as a means to gain an unfair advantage over their law-abiding competitors.”

The Labor Commissioner’s Office launched its investigation of the company and its owner, Leonid Molchanov, after receiving a Private Attorneys General Act claim. Investigators found that Attic Pros’ employees worked 10-14 hours per day up to six days a week, and were paid a daily rate regardless of the actual number of hours worked-putting their earnings below minimum wage.

Su ordered Attic Pros to pay $191,400 in unpaid minimum wages, $321,330 in unpaid overtime wages, $191,400 in liquidated damages on unpaid minimum wages, $1,405,350 in waiting time penalties, and $1,481,600 in civil penalties for minimum and overtime wage violations, wage statement violations and employee misclassification. The citations were issued for violations that occurred during the 32-month period from July 2014 to March 2017.

When workers are paid less than minimum wage, they are entitled to liquidated damages that equal the amount of underpaid wages plus interest. Waiting time penalties are imposed when the employer fails to provide workers their final paycheck after separation. This penalty is calculated by taking the employee’s daily rate of pay and multiplying it by the number of days the employee was not paid, up to a maximum of 30 days. The civil penalties collected will be transferred to the State’s General Fund as required by law.

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Immigrant workers rally in NE Portland to shed light on problems in construction industry (OR)

Posted: Jul 28, 2017 12:34 AM EDT
Updated: Jul 28, 2017 12:34 AM EDT
By FOX 12 Staff

A group representing immigrant construction workers say they’re victims of rampant wage theft with many workers too afraid to come forward.

On Thursday the group held a rally that was organized by Portland Jobs with Justice for Immigrant Carpenters in Portland-area construction.

Workers took the podium to talk about instances of wage theft and other abuses they say they’ve experienced.

Workers say Thursday’s rally was to shed light on what they call a huge problem in Portland’s construction industry.

“Portland is under a huge construction boom right now. We got cranes all over, buildings going up left and right. But there’s an underground problem,” said Ben Besom with Northwest Carpenters Union. “It’s a really hard number to quantify because a lot of the people being exploited on these projects are afraid to come out of the shadows and tell their stories.”

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Wage theft demands legislative response, advocates say

June 21, 2017
By Katie Lannan and Colin A. Young

Supporters of legislation aimed at preventing wage theft painted a picture of an urgent need for action on Tuesday, telling lawmakers that Massachusetts workers across all industries are denied hundreds of millions of dollars annually.

A bill (S 999/H 1033) filed by Sen. Sal DiDomenico and Rep. Aaron Michlewitz seeks to prevent wage law violations by allowing the issuance of stop-work orders until violations are corrected and giving Attorney General Maura Healey’s office the power to bring wage theft cases to court for civil damages.

“We’ve seen people not get paid for months on end,” Steve Joyce of the New England Regional Council of Carpenters told the Labor and Workforce Development Committee. “They’re selling what they have in order to live. That’s just wrong, and you have the opportunity to change this by passing this bill.”

Eleven months into the 2017 fiscal year, Healey’s office has received 16,000 calls to its wage theft hotline, or about 70 per day, said Cynthia Mark, the chief of Healey’s Fair Labor Division. More than 5,000 complaints have been made to the office, and the division is on track to resolve nearly 600 cases through citation or settlement. It has ordered employers to pay almost $5 million in restitution in and more than $2 million in penalties to the state’s general fund.

The bill is opposed by business groups, 16 of which signed on to a letter to the committee arguing that the solution to wage theft is not in a new law “but rather in enhanced enforcement efforts and additional funding for the Attorney General’s office to enable her staff to use the tools currently in place.”

“This bill, in its current form, will unfairly punish legitimate and law-abiding companies in all industries across Massachusetts who contract with other businesses for services, but have no control over the operations of those independent businesses,” said the letter, signed by the Associated Industries of Massachusetts, Greater Boston Chamber of Commerce, NAIOP Massachusetts, the Retailers Association of Massachusetts and other groups. “If a company violates the current laws, the company in violation should be penalized through existing statutes and regulations, which ensure fair and timely payment of wages.”

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