Houston contractor indicted for making false statements about paying prevailing wage on CMHA jobs

Posted by National Alliance for Fair Contracting on

FOR IMMEDIATE RELEASE
Tuesday, November 17, 2015

 

A 61-count indictment was filed charging Marcus Butler, of Houston, with making multiple false statements to the United States Department of Housing and Urban Development and the United States Department of Labor while defrauding the Cuyahoga Metropolitan Housing Authority and several of his former employees, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, announced that.

The indictment alleges that Butler ran an electrical company called LB Electric of Northeast Ohio in the Cleveland area.  Butler and his company agreed to work as subcontractors on a number of CMHA construction projects, including projects at the Riverside Park, Union Square and Delaney Village properties.

Butler, as a subcontractor on the CMHA project, agreed to pay his employees a prevailing wage while they worked on these CMHA projects and further agreed to provide certified weekly payrolls to CMHA. Although Butler submitted numerous certified payrolls claiming that he paid a prevailing wage to his employees, he did not in fact make such payments to his employees and instead submitted false certified payrolls to conceal this conduct. As a result of his conduct, Butler overstated the amount of wages paid to his employees, and thus underpaid his employees, by approximately $126,514, according to the
the indictment.

Wage-theft enforcement needs a shot in the arm

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Advocates push for a crackdown, but cite estimates based on a survey done five years ago

November 17, 2015
By Rosa Goldensohn

Despite a law meant to keep employers from underpaying workers, wage fraud is “pervasive” and requires more regulation, a new report argues.

The study cites 11 individual cases that have occurred in New York since the state law in 2010 to supports its assertion that additional reforms are needed.

But in an attempt to show the statewide scope of the problem, the report extrapolates data from a survey of workers by a workers-rights group in 2010, before a state law passed that year to prevent wage theft had any effect.

Roughly 2.1 million New Yorkers lose $3.2 billion to wage theft annually, including more than $1 billion last year from pay that is less than minimum wage, according to a report to be released Tuesday by the Center for Popular Democracy and based on the worker-advocacy group National Employment Law Project’s study five years ago. Just a fraction of the $23 million in underpayments to 12,700 workers in 2013 was returned, the new report said.

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LWC Focus on Misclassification of Workers Yielding Record Results

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By WorkersCompensation.com
11/17/2015

 

Baton Rouge, LA (WorkersCompensation.com) – The Louisiana Workforce Commission is on track toward a second consecutive record-setting year in the identification of workers misclassified by employers as independent contractors.

Through November 12, 2015, LWC identified nearly 9,400 misclassified employees in audits of 865 companies. Audits in process through the end of 2015 are expected to surpass 2014’s record discovery of 12,782 misclassified employees.

Misclassifying employees as independent contractors can lead to companies not paying unemployment taxes, workers’ compensation premiums and their portion of Social Security and Medicare taxes. They may also gain an unfair competitive advantage over competitors by improperly lowering their labor costs.

(Read More)

City Council passes bill to curb wage theft (PA)

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By Max Marin
November 12, 2015

 

City Council passed a bill Thursday that will increase fines for employers who commit wage theft in Philadelphia. The bill, introduced by Councilman Bill Greenlee, received unanimous approval on the floor.

“This new law will help send a message that wage theft will not be tolerated in our city,” a representative from Community Legal Services said in a statement. “Philadelphia has taken a vital step towards stopping wage theft and we commend City Council for voting to pass this bill and protect workers.”

An estimated $19 million to $32 million worth of wages are withheld from workers statewide in the average work work. In this same period, some 93,000 instances of wage occur in Philadelphia alone.

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Cleveland contractor indicted, charged with paying criminally low wages on housing work

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By Eric Heisig
on November 11, 2015 at 4:05 PM, updated November 11, 2015 at 4:17 PM

 

CLEVELAND, Ohio – A federal grand jury has indicted a Cleveland contractor and charged him with paying criminally low wages to employees working on a public housing project.

Marcus Butler, 31, faces 61 counts of making false statements to a government agency. Prosecutors say Butler, the owner of L & B Electric of Northeast Ohio, lied on tax forms between 2011 and 2013 and said he paid his employees $126,514.80 more than he actually had.

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Sen. Brown and Labor Secretary Perez Outline Efforts to Address Worker Misclassification (OH)

Posted by National Alliance for Fair Contracting on

Publish Date: 2015-11-03

 
CLEVELAND, OH – Alongside workers who have been denied wages, benefits, and protections because they have been misclassified, U.S. Sen. Sherrod Brown (D-OH) and U.S. Secretary of Labor Thomas E. Perez outlined efforts that would protect workers and businesses that play by the rules. In Cleveland, Brown announced plans to introduce new legislation that would close a loophole in the tax code that allows employers to openly treat full-time workers as independent contractors in order to avoid providing them with earned safeguards and benefits – like payroll tax withholding, overtime, unemployment insurance, and workers’ compensation.

“We should call this what it is: fraud,” Brown said. “We see it in industries from trucking and construction, to service sectors like landscaping and home health care. If employees are classified as independent contractors, then an employer doesn’t have to pay them overtime or contribute to their Social Security or Medicare benefits. When companies cheat tax law and misclassify employees, workers lose, honest businesses lose, and taxpayers lose. This is unfair to workers, unfair to businesses that play by the rules, and it must stop.”

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US Labor Department’s Wage and Hour Division opens new office in Helena, Montana

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WHD News Release: [11/02/2015]
Release Number: 15-2133-MON 

HELENA, Mont. – The U.S. Department of Labor’s Wage and Hour Division has opened a new field office in Helena to connect employees, employers, community organizations and other stakeholders with resources and assistance to ensure compliance with federal labor laws. The new office is located in the Max Baucus Federal Building, at 10 West 15th St., Suite 1800, Helena, MT 59626.

“This new office will serve as a one-stop resource for compliance assistance and information concerning the federal labor laws we enforce,” said Betty Campbell, acting regional administrator for the Wage and Hour Division in the Southwest. “The Helena field office will benefit all the members of the labor community of one of the fastest growing metropolitan areas in the nation by putting them much closer to available resources.”

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Report: Construction sector faces 2nd-highest fraud rate across all industries

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By Kim Slowey | November 24, 2015

 

 

Dive Brief:

  • According to the 2015 Kroll Global Fraud Report, 75% of construction, engineering and infrastructure companies have experienced a fraud incident in the past year. The most common types of fraud experienced by respondents in the construction sector were theft of physical assets or stock (36%) and vendor, supplier or procurement fraud (24%). In 32% of surveyed firms, a senior executive or middle manager was involved in a fraud against the company.
  • The construction fraud rates were second only to the retail sector. Construction also had the highest percentage of regulatory or compliance breach fraud, 18%, of any sector. Exposure to fraud has increased for 92% of construction industry respondents in the last year – the highest increase to exposure for any sector.
  • Despite problems caused by high staff turnover, the consulting firm found that only 30% of construction companies are planning to invest in background screening in the coming year, and only 25% plan to spend on management controls – less than the survey average.

 

Dive Insight:

“While technology has enabled new ways to perpetrate fraud, our daily work with clients confirms what the report also reveals – that old fashioned theft, bribery and kickbacks are still amazingly effective and pervasive,” Daniel Karson, chairman of Kroll, said in a release. “Human nature being what it is, fraud will always be with us, whether it occurs in a company’s corner office or a world away in its supply chain. However, there are numerous strategies, resources and best practices available to companies that can go a long way toward helping them protect themselves and their investments.”

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NY Task Force to Combat Worker Exploitation Gets Boost

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October 16, 2015

NEW YORK – Gov. Andrew Cuomo this week announced new measures to advance the state’s Task Force to Combat Worker Exploitation, but advocates are concerned it may not be enough.

The measures include funding to coordinate outreach, investigations and prosecutions, and a new anti-retaliation unit for workers who stand up for their rights. According to Anita Halasz, executive director of Long Island Jobs with Justice, many of the workers who will benefit are immigrants.

“We definitely commend the governor for taking this very important step,” she said, “because, oftentimes, immigrant workers are working in the shadows and are unable to represent themselves.”

Worker advocates, however, are concerned that the additional $700,000 in funding is too little to address the problem of worker exploitation statewide.

(Read More)

Broken Laws, Unprotected Workers

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Violations of Employment and Labor Laws in America’s Cities

A report by Annette Bernhardt, Ruth Milkman, Nik Theodore, Douglas Heckathorn, Mirabai Auer, James DeFilippis, Ana Luz Gonzalez, Victor Narro, Jason Perelshteyn, Diana Polson, and Michael Spiller

At the start of the 21st century, America’s workplace laws are failing to protect our country’s workers. In industries ranging from construction and food manufacturing to restaurants, janitorial services and home health care, workers are enduring minimum wage and overtime violations, hazardous working conditions, discrimination, and retaliation for speaking up or trying to organize. They have little recourse because of their need for work, especially during the recession. Until now, however, advocates and policy makers lacked representative and reliable data on the magnitude of the problem, the workers who are most affected, and the industries that are the biggest culprits.

Broken Laws, Unprotected Workers is the first study of its kind, exposing systematic and routine violations of employment and labor laws in core sectors of the economy. In 2008, we conducted a landmark survey of 4,387 workers in low-wage industries in the three largest U.S. cities-Chicago, Los Angeles, and New York City. We used an innovative, rigorous methodology that allowed us to reach vulnerable workers who are often missed in standard surveys, such as unauthorized immigrants and those paid in cash. Our goal was to obtain accurate and statistically representative estimates of the prevalence of workplace violations

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(See Full Report Here)