Misclassification of workers called a ‘serious’ problem

Posted by National Alliance for Fair Contracting on

Laurie Merrill, The Republic
8:13 p.m. MST April 1, 2015

 

The federal government is using enforcement and education in its ongoing battle to stop construction businesses from hiring off-the-books laborers to cut costs, a Labor Department official said.

“There are, sadly, businesses out there that use misclassification as a business model,” David Weil, U.S. Department of Labor’s Wage and Hour Division administrator, said at a construction industry seminar in Phoenix Wednesday.

The practice of paying lower wages to untrained workers by misclassifying them as independent contractors is growing, Weil said. By doing so, companies avoid paying taxes, employment insurance, liability coverage and legal wages. Underpaid employees often are afraid to come forward.

“The misclassification of employees as independent contractor presents one of the most serious problems facing affected employees, employers and the entire economy,” Weil said.

(Read More)

Study shows wage theft rampant in construction industry

Posted by National Alliance for Fair Contracting on

By Katie Johnston GLOBE STAFF MAY 12, 2015
 

For more than three years, workers doing asbestos removal and demolition jobs for several Woburn companies were paid in cash, resulting in more than $700,000 in unreported wages, federal prosecutors charged in an indictment last week.

Meanwhile, construction workers around the state – particularly immigrants hired by subcontractors – say they sometimes go for weeks without pay. When they do get paid, it can be less than promised, and overtime pay is virtually nonexistent.

Many of them are hired as independent contractors, without the job protections or tax deductions of a traditional employment relationship.

The practice, known as wage theft, “has reached epidemic levels” in Massachusetts, namely in the booming residential construction industry, according to research from the University of Massachusetts Amherst.

In the past 18 months, the state attorney general’s office has issued more wage violation citations against employers in the construction industry than in any other sector – 253 citations in all, resulting in more than $1.6 million being recovered in penalties and unpaid wages. The attorney general’s office said cracking down on wage theft continues to be a priority.

Successful investigation into worker misclassificatrion is victory for Utahns

Posted by National Alliance for Fair Contracting on

By David Weil

For the Deseret News

Published: Friday, May 1 2015 12:04 a.m. MDT

Imagine if one day you went to your job, and the very next day you went back to the same job – working for the very same boss in the same location and performing the same tasks – but your employer declared you to be an independent contractor or part of a limited liability company.

That’s exactly what one Utah construction company was doing, as part of a worker misclassification scheme that denied workers basic protections. But an investigation by the U.S. Department of Labor’s Wage and Hour Division shut down this business model and made the workers whole again, to the tune of hundreds of thousands of dollars.

The defendants in this legal matter (operating collectively as CSG Workforce Partners, Universal Contracting, LLC and later as Arizona Tract/Arizona CLA) required their workers to become “member/owners” of limited liability companies, stripping them of legal rights that come with employee status. That means no minimum wage guarantee, no time-and-a-half overtime pay, no workers’ compensation, no unemployment insurance and other benefits.

(Read More)

New Study: ROAD AND BRIDGE CONSTRUCTION WORKERS IN THE MIDWEST

Posted by National Alliance for Fair Contracting on

Productive, High-Skilled, and Well-Paid

March 1, 2015

Road and Bridge Construction Workers in the Midwest was co-authored by Frank Manzo, Policy Director of the Midwest Economic Policy Institute, and Professor Robert Bruno of the University of Illinois School of Labor and Employment Relations.  It  looks at the economic and construction-related benefits of skilled workers in the Great Lakes region, which the study defined as Illinois, Indiana, Michigan, Ohio, and Wisconsin.

Executive Summary

Construction workers who specialize in road and bridge infrastructure projects are productive, high-skilled, and well-paid in America’s “Great Lakes” region- which comprises Illinois, Indiana, Michigan, Ohio, and Wisconsin.

Key findings from this report include:

  • Employment in construction jobs is expected to increase by 21.4 percent over the next decade, the second-fastest growing occupation. The majority of these new employment opportunities will require the completion of a three- to five-year apprenticeship program.
  • In 2013, three out of every five new construction jobs in the Great Lakes region were filled by a candidate with an associate’s or apprenticeship degree.
  •  Road and bridge construction workers each produce an average of $155,100 in economic value for the Great Lakes region, second only to their counterparts in the Far West states ($162,461 per worker). Wisconsin’s street, highway, and bridge construction workers were the most productive in the Great Lakes region, annually contributing an average of $184,592 to the economy.
  •  Construction workers in the Great Lakes region build highways in a cost-effective manner, constructing each lane-mile up to 43 percent cheaper than the national average.
  • The apprenticeship share- the ratio of active apprentices to total workers in construction occupations- is higher in states with a prevailing wage law (7.7 percent) than in states without a prevailing wage law (5.4 percent). Additionally, 10 percentage-point increase in a state’s construction industry unionization rate is associated with a 3.2 percentage-point average increase in its apprenticeship share.

Construction workers across the Great Lakes region are well-compensated and can support a middle-class family. Road and bridge construction workers receive significant training in the Great Lakes states and, in turn, translate their increased human capital into higher levels of productivity for employers. Unfortunately, there are threats across the Midwest to weaken the institutions that are statistically correlated with increased worker efficiency, including prevailing wage laws and trades unions. If the Great Lakes region is to remain one of the nation’s leaders in worker productivity on public construction projects, these institutions must be both defended and strengthened.

(Read More)

[PR Watch addresses forces behind prevailing wage repeal]

Posted by National Alliance for Fair Contracting on

ALEC, NFIB Push Prevailing Wage Repeal

Posted by Jody Knauss on March 24, 2015

Lower Wages for Workers, No Savings to Taxpayers

Studies have consistently found that prevailing wage laws do not increase government contracting costs, and repeal of prevailing wage laws does not save taxpayer money, primarily because higher-wage construction workers are much more productive. An exhaustive study using a database of 150,000 construction projects over the period 2003-2010 compared the eight Midwestern states with prevailing wage laws to the four without and found per-square-foot construction costs to be equal or lower in prevailing wage states. Taxpayer savings associated with the absence of a prevailing wage law: zero.

(Read More)

CONSTRUCTION COMPANY FOREMAN SENTENCED FOR DEFRAUDING EMPLOYEES BY TAKING $330,000 IN WAGES FROM TWO PUBLIC WORKS CONTRACTS AND BURGLARIZING NEIGHBOR’S HOME

Posted by National Alliance for Fair Contracting on

 *Co-defendant in this case is scheduled for a preliminary hearing tomorrow

Date: March 23, 2015            Case # 13CF3959

SANTA ANA – A construction company foreman was convicted and sentenced Friday for defrauding employees of $330,000 in wages and keeping the money for himself from two public works contract. Antonio Naranjo Jr., 41, Costa Mesa, pleaded guilty Friday, March 20, 2015, to 11 felony counts of taking and receiving a portion of a worker’s wage on public works project and two felony counts of recording a false and forged instrument. He was sentenced to four years and six months in state prison. Naranjo Jr. is currently serving two years and eight months in state prison for a residential burglary conviction in 2012 (Case #12HF3186) and will now serve seven years and four months in state prison.

Walsh: Dialogue needed on public project wages

Posted by National Alliance for Fair Contracting on
Monday,

March 23, 2015

By: Jack Encarnacao

 

Mayor Martin J. Walsh said raising the wages of union laborers who work on public projects should be part of the national dialogue on income inequality during a panel discussion with the mayors of New York, Baltimore and Seattle.

Walsh praised the Legislature for boosting the state minimum wage to $11 by 2017 before mentioning the “prevailing wage law,” which pays Boston tradesman in the range of $30 to $50 an hour to work on public projects.

“I think we have to look at the prevailing wage law as well to make sure that we give people the opportunity to … have a living wage,” Walsh said during the “Municipal Strategies for Financial Empowerment” public forum at the University of Massachusetts Boston.

(Read More)

3d_money_construction_dreamstime_xxl_21903206

Report: Wage theft on the rise in Bay area

Posted by National Alliance for Fair Contracting on

Sarah Hagen, WTSP6:43 p.m. EDT

March 20, 2015

 

 

St. Petersburg, Florida — Could you be a victim of wage theft? It’s when an employer doesn’t pay in full, fails to pay minimum wage, ignores overtime pay, makes you work through meal breaks or pays late.

“Pushing for a wage theft ordinance in St. Pete will make bad businesses think twice before cheating employees,” said councilwoman Darden Rice. She adds, it’s the many personal stories like Scott Snurpus’ that have motivated her for change

“Once I realized I was being robbed I was mad,” says Snurpus who was working as an electrician. He says his temp agency was wrongly taking money from his paycheck to pay for equipment. Since then the US Labor Board got involved and he’s gotten his money back.

Rice says certain industries are more likely to target victims “Low-wage industries: fast food workers, nursing homes, construction workers,” she says.

(Read More)

Sunshine Week: Beat reporter shines light on schools’ use of federal contracts

Posted by National Alliance for Fair Contracting on

By Robert Brauchle

March 16, 2015

 

Reporter Ryan Murphy began 2014 with a tip that Isle of Wight County Schools may have skirted federal regulations in the construction of the new Georgie D. Tyler Middle School.

Using the state Freedom of Information Act to access copies of contracts, emails and bid documents, the Daily Press Isle of Wight County beat reporter found that the school division had omitted wage standards from the construction contract that are required under the federal Davis-Bacon Act. The effect was to lower the cost of construction by underpaying local workers hundreds of thousands of dollars.

“I spent a couple of months digging into the documents and digging into legislation to figure out exactly what had happened,” Murphy said.

Murphy worked with school administrators to get the documents he needed.

(Read More)

Texas Urged to Crack Down on Employers That Misclassify Workers

Posted by National Alliance for Fair Contracting on

By Julian Aguilar

March 15, 2015

 

Workers’ rights groups in Texas are revamping their efforts to increase protections for low-income laborers by urging lawmakers to crack down on employers that intentionally misclassify their employees.

Misclassifying workers as independent contractors – rather than employees – allows employers to avoid paying payroll taxes, overtime and workers’ compensation. The practice also allows employers to skirt federal law that requires new hires to provide proof that they can work in the country legally.

About 35,000 Texas workers were misclassified between 2010 and 2012, according to the Texas Workforce Commission. That includes 4,300 in the construction industry and 4,100 in the health care and social assistance industries. Those workers’ employers should have paid about $2.4 million to the state’s unemployment insurance fund, according to a report by the Legislative Budget Board.

(Read More)