California attorney general seeks to combat state’s growing underground economy

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by Mark Iandolo
Apr. 9, 2018, 10:44am

SACRAMENTO, Calif. (Legal Newsline) – California Attorney General Xavier Becerra announced April 2 that he is working with Sen. Cathleen Galgani on legislation to permanently establish the Tax Recovery and Criminal Enforcement (TRaCE) Task Force within the California Department of Justice.

“Here in California, home to the world’s sixth-largest economy, every worker who powers this engine deserves rights at work, every upstanding business owner deserves a fair market, and every taxpayer deserves to see their hard-earned money used to fund vital services,” Becerra said in a statement. “If you work hard and play by the rules, you should be able to get ahead. This legislation would provide the resources needed to enforce the law and protect the pocketbook of every hard working Californian.”

Senate Bill 1272 would expand TRaCE to all the state’s metropolitan regions- Sacramento, Los Angeles, San Diego, the Bay Area and Fresno. The bill seeks to combat California’s growing underground economy.

“The underground economy results in significant uncollected revenues that are desperately needed to fund basic government services,” said Galgiani in a statement. “The TRaCE Task Force, operating as a pilot program, has recovered millions of dollars in lost tax revenue for the state. I’d like to thank the agents for their rigorous work investigating and prosecuting the most egregious felony-level underground economic crimes in the state.”

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Trump signs bill that kills Obama-era rule targeting wage theft, unsafe working conditions

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By Kimberly Kindy – Washington Post
Mar 28, 2018, 8:56 am

President Donald Trump signed a bill Monday that killed an Obama-era worker safety rule that required businesses competing for large federal contracts to disclose and correct serious safety and other labor law violations.

Earlier this month, the Senate voted to eliminate the Fair Pay and Safe Workplaces rule, which applied to contracts valued at $500,000 or more. Votes on the bill in both the House and Senate divided along party lines.
said.

The Fair Pay and Safe Workplaces regulation was finalized in August but most of it was never implemented. Within days of it being finalized, the Associated Builders and Contractors (ABC) sued, securing a temporary injunction that prohibited the federal government from implementing it.

In a last-minute effort to fight for the rule earlier this month, Sen. Elizabeth Warren, D-Mass., released a staff report that showed that 66 of the federal government’s 100 largest contractors have at some point violated federal wage and hour laws. Since 2015, the report says, more than a third of the 100 largest OSHA penalties have been imposed on federal contractors.

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San Jose, Calif., Weighs Boost for Construction Project Workers

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By Joyce E. Cutler
March 27, 2018

Private construction projects in San Jose, Calif., that receive $3 million or more in tax breaks or other public financial support would have to pay prevailing wages and hire local workers under a proposal the city council is expected to consider next week.

“There are three basic challenges we’re trying to grapple with. One is a severe shortage of affordable housing and of housing supply generally; substantial shortage of construction labor, which are driving up construction costs; and third, a growing gap between those who are benefiting from the great prosperity here in the Bay Area and those who are gasping for air with the rising tide,” Liccardo said.

Local Standards

The proposal would require that employers on the projects pay a wage-and-benefits package that’s at least equivalent to the state-determined levels for the work and geographic area. At least 30 percent of the workers on a qualifying project within the city would have to live within 50 miles of the job site. A quarter of apprentice hours would have to go to disadvantaged workers. Projects would have monitoring and compliance provisions.

The requirements would cover projects that receive at least $3 million in public subsidies, including money, land, or other direct financial assistance or a substantial reduction in fees or taxes.

“The end goal is to provide good quality jobs to local workers. And whether we do that by way of initiative or reaching a compromise by the more conventional channels is not so important to us,” Ben Field, South Bay Labor Council executive officer, told Bloomberg Law.

Union-Backed Initiative

The agreement was reached after negotiations with the South Bay Labor Council, Working Partnerships USA, the Santa Clara-San Benito Counties Building Trades, and the Mechanical, Electrical, Plumbing, and Sprinkler Fitters (MEPS) unions, Liccardo said in a memo to the council.

“One of the best ways to ensure that good quality jobs go to local workers is to provide a prevailing wage,” Field said March 23. “One of the basic problems that we’re seeing here is middle class jobs are disappearing. A large part of the reason is the construction workforce is not being paid adequately.” Would-be construction workers aren’t going into trades or crafts where the wages are depressed.

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LYNN COUNCIL VOTES TO PENALIZE CONTRACTORS WHO VIOLATE STATE LABOR LAWS

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BY THOMAS GRILLO

March 27, 2018

LYNN – The City Council adopted a sweeping ordinance Tuesday night to prohibit contractors who violate the state’s labor laws from doing business with the city.

In a unanimous vote, the 11-member panel approved a measure to bar employers who have failed to pay their workers from obtaining city contracts.

Before the meeting, more than 100 union protesters rallied in front of City Hall urging the City Council to vote yes.

“Wage theft hurts all of us, including honest businesses who are underbid and undercut by businesses that cheat the system,” said Kathryn Cohen, an organizer with the North Shore Labor Council. “Taxpayers lose as much as $200 million in tax revenue annually. Here in Lynn we are saying enough.”

Two hours later, the council adopted the regulation that would also impact developers who have received a tax break from the city.

“Someone has to speak up for the workers,” said City Councilor Peter Capano. “We’ve put a lot of serious thought into this.”

…

But Cynthia Mark, chief of the attorney general’s Fair Labor Division, testified that her department, which consists of 13 lawyers and 20 investigators, could use the help a local law would provide.

Over the last two years, her office has received 40 complaints about Lynn companies and has recovered $80,000 in wages, she said.

“We welcome your partnership,” she told the council. “We can’t do it alone.”

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Construction workers least likely to have health insurance, report finds

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March 27, 2018

 

Dive Brief:

  • Of the 20 professions least likely to have health insurance, 11 of them are in the construction industry, according to MarketWatch
  • The average uninsured rate for fulltime workers in the U.S. is 12%, but the percentage of certain categories of construction workers without health insurance is much higher, including roofers (50.5%); drywall hangers, finishers and ceiling tile installers (49.5%); plasterers and stucco masons (49.1%); fence installers (45.7%); carpet, tile and floor installers (45.2%); painters and paperhangers (43.1%); construction trade helpers (42.8%); installation, maintenance and repair helpers (40.5%); cement masons, concrete finishers and terrazzo workers (38.7%); brick masons, block masons, stonemasons and reinforced iron and rebar workers (38.6%); and construction laborers (37.5%)
  • At least some of the workers who reported not having health insurance coverage could be classified as independent contractors, which means that they are operating as a business and not entitle to benefits from another employer.

Dive Insight:

In most states, companies are required to carry workers’ compensation insurance so that if a worker is injured on the job, medical bills, partial salary, rehabilitation costs and training for a new trade, if necessary, will be paid regardless of whether the injured person has health insurance. However, is the worker is classified as an independent contractor or contract worker, then he or she is not covered by this benefit.
And, according to the Workers Defense Project, the southern U.S. is the region most likely to have construction workers laboring as independent contractors.
As part of its study, the Workers Defense Project reported that only 5% of the 1,435 workers it interviewed in six southern states
said workers’ compensation would cover the cost of their work injuries, and 57% said they earned less than $15 an hour.

Hiring women can ease the construction labor shortage

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Vicki O’Leary
March 23, 2018

Editor’s Note: This piece was written by Vicki O’Leary, who was appointed chair of the North American Building Trades Union (NABTU) Tradeswomen’s Committee after joining the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers Union in 2016. She is a 32-year ironworker member from Local 1 in Chicago, and has bachelor’s and master’s degrees in labor and leadership. The opinions represented in this piece are independent of Construction Dive’s views.

It’s a time to celebrate the progress we have made in women’s rights but also time for reflection. We ought to stop and look back at the progress we have made or the lack there of. In many areas we have made progress but in many others, progress is rather illusive. Women are viewed as equal bread winners and they hold key positions in many industries. Does it mean that we have achieved gender equality?

Let’s turn to the construction industry. Despite the progress we have seen in the societal acceptance of women as equal breadwinners, capable leaders and successful entrepreneurs, in many industries such progress is less prevalent than others. Construction industry has a long history of sexism and discrimination against tradeswomen. In some cases, such treatment ended in tragedy such the fate of carpenter apprentice Outi Hicks, who was killed on the jobsite by a coworker.

An uphill battle

In the 21st century, it is shocking that women in the construction industry still face an uphill battle when it comes to advancement. But when you consider the root causes and statistics, it’s not such a shock.

Almost a third of women working in construction fear sexism will hold them back from the industry’s top jobs, a recent study by Royal Institute of Chartered Surveyors (RICS) found last year. The construction trades have long been among the industries with the lowest percentage of gender diversity in the workforce. Women represent only 9% of the overall construction workforce and 3% of the building trades.

Why does it matter? The construction industry is experiencing a dire skilled labor shortage and women make up half of the population and workforce. It’s intuitive to conclude that a large part of the solution to the skilled labor shortage is in the hands of the untapped talent – we need more tradeswomen! It’s that simple. If the construction industry doesn’t act promptly to address and mitigate sexism and breakdown gender bias, it wouldn’t just be hindering progress in closing the gender gap but also the skilled labor gap.

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DA holds labor law conference

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By: Adina Genn
March 23, 2018

Labor leaders, elected officials and representatives from county, state and federal agencies gathered this week for a labor law conference at The Morrelly Center in Bethpage, hosted by Nassau County District Attorney Madeline Singas.

The conference, the district attorney’s second, aimed to share information and discuss trends toward protecting employees and taxpayers.

“When unscrupulous employers cheat in one aspect, they often cheat in everything,” Singas said in a statement. “It starts with stealing hard earned wages from their employees, and then evolves into submitting false payroll records, false tax returns and cheating the unemployment insurance system.”

In 2017, the Nassau DA began working with district attorney offices in New York City and Westchester, along with the state Attorney General’s office and the U.S. Department of Labor to launch a wage-theft investigation within the construction industry. This year the Nassau DA’s wage theft saw 30 cases related to undocumented workers who aren’t being paid, up from two last year. And at an event that the DA’s office organized with Univision generated new cases.

Attendees at the 2018 conference included Nassau County Executive Laura Curran, Westchester County District Attorney Anthony Scarpino and Putnam County District Attorney Robert Tendy as well as representatives from the Gov. Andrew Cuomo’s office; Attorney General Eric Schneiderman’s office; the New York State Labor Department; Occupational Safety and Health Administration; Queens County District Attorney’s Office; the Law Office of Archer, Byington, Glennon & Levine; and Maryhaven Center of Hope.

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Albany retrieves $35M in wages stolen from N.Y. workers

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BY GLENN BLAIN
NEW YORK DAILY NEWS
Tuesday, April 3, 2018, 8:30 PM

ALBANY – State investigators recovered more than $35.3 million in stolen wages in 2017 – a boost of over $1.3 million from the year before, officials announced Tuesday.

The wages were returned to 36,446 workers across New York, including 15,577 in the city, who were not properly compensated for their time on the job.

“We have zero tolerance for those who seek to rob employees out of an honest day’s pay for an honest day’s work,” Gov. Cuomo said.

Since taking office in 2011, Cuomo has made wage theft a priority for the state Labor Department and other agencies. With the 2017 figures, the state has now returned $258.4 million to 215,335 workers.

The state’s just-approved 2018-19 budget included $1 million to fund the Labor Department’s efforts to investigate wage theft, Cuomo added.

Among the most common forms of wage theft are failure to pay overtime, failure to pay the correct prevailing wage and the charging of workers for required uniforms and equipment.

State officials urged workers who wish to file a wage theft complaint to call (888) 4-NYSDOL.

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Do wage theft laws in Ohio harm or help workers?

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BUSINESS
Updated Apr 15, 10:24 AM; Posted Apr 15, 5:00 AM

Cleveland, Ohio — Matthew J. Grassi got to savor victory for only a few minutes.

The Ohio Department of Commerce had just awarded him $1,701 in a wage theft claim against his former employer. Then the investigator told him, “It is going to really be difficult for you to see this money.”

A decade later, Grassi has “never seen a dime.” His former employer never responded to the state’s request for payment. The state says the debt probably can’t be collected.

Grassi was a victim of wage theft, a term commonly used to describe failure to pay workers fully for their labor. In Ohio, his story may not be that uncommon.

Ohio ranked second among the 10 largest states for a common type of wage theft, minimum wage violations, according to a report last year by the Economic Policy Institute, a left-leaning think tank in Washington. It estimates that Ohioans annually lose $600 million to wage theft.

But the state generally denies claims of wage theft, according to a Plain Dealer analysis of 4,800 complaints filed from 2010 to 2017. Even when it approves claims, victims only have a 50-50 chance to collect what they are owed.

Experts say it stems from two problems: the below-average strength of Ohio’s laws against wage theft, and the state’s lax enforcement of them.

Officially, Ohio lets wage-theft victims collect three times their back wages, called treble damages. In practice, it often chooses to waive that penalty for first-time offenders.

“In Ohio, it is not a set policy that is geared toward protecting workers and advocating for their rights,” said Daniel J. Galvin, a Northwestern University professor who studied enforcement of the law across the states. “They’re in the business of employer assistance.”

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Union workers: More coming forward against wage theft

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By Bill Shaner
April 12, 2018

Carpenters and activists again rallied in front of the 145 Front St. development earlier this week, but this time for a different reason: They were taking a victory lap of sorts, after a subcontractor on the job was forced to pay a carpenter $15,000 in a wrongful termination settlement.

P&B Partitions, a subcontractor hired by Erland Construction for sheet wall work, was forced by the National Labor Relations Board to pay contractor Eddie Vasquez $15,200 in back pay and $147 in interest, according to a copy of the settlement. Vasquez was fired, according to a release from the New England Regional Council of Carpenters, after he started working with the union on a wage theft case and encouraging others to join the effort.

Vasquez himself was at the rally, and said the money was overdue, but the larger issue of wage theft, of which the union now has 12 open cases, is still ongoing. The carpenters union rallied outside of 145 Front St. weekly for much of last year, demanding a resolution to the wage theft cases.

“We got the upper hand. More workers are coming forward. More workers are telling the truth,” said Vasquez. “What happens is, they prey on the weak. These companies prey on the weak.”

The U.S. Department of Labor complaints the union filed against the contractor are still under review. The cases, including Vasquez’s, mostly center around cash overtime pay promised but never delivered, according to the union. While only 12 complaints have been filed, Vasquez said the number of workers who weren’t paid overtime on the job is closer to 30.

Union organizer Manny Gines said a main goal of the antiwage theft effort, which would be addressed by a wage theft bill currently in the state Senate, is making sure companies with a record of cheating workers don’t get brought on jobs. As it stands now, Gines said, nothing prevents companies from hiring subcontractors with a history of wage theft.

“The bottom line is, they want to use cheap labor,” said Gines. “We’re trying to hold them accountable.”

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