Register Now – 20th Annual NAFC Conference, August 19-22, 2018 – San Diego, CA

Posted by National Alliance for Fair Contracting on

July 2018

It’s our 20th Anniversary! Save the date and join NAFC at our upcoming Annual Conference in sunny San Diego, CA. The Conference will be held at the Hilton San Diego Bayfront Hotel, in downtown San Diego. This year’s Conference will be jointly sponsored by the Center for Contract Compliance and will have a national as well as a California specific focus. The NAFC National Conference is attended by participants from across the nation, including representatives from labor organizations, responsible contractors, fair contracting compliance organizations as well as researchers, academics, attorneys and officials from federal, state and local governments.

(Visit NAFC’s Conference Page)

(Download Joint Conference Registration Form)

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US prosecutors target construction firms that “institutionalise theft” from their own workers

Posted by National Alliance for Fair Contracting on

A recent spate of criminal prosecutions in New York and California against builders who don’t pay their workers the agreed wage suggests a hardening mood against corporate graft in the country.

27 June 2018 | By GCR Staff

In one case, a luxury home-builder in Manhattan has been charged with stealing more than $1.7m from 500 workers through payroll tricks.

Previously, failure to pay the correct wage was treated as a civil matter, putting the onus on the worker to bring a suit against their employer. But now state prosecutors seem more willing to treat the issue as a violation of criminal law.

Diana Florence, an assistant district attorney (DA) in Manhattan, said the aim was to stop companies in industries that rely on lots of low paid workers from “institutionalising theft as a business model”.

The new approach was illustrated most recently last week when authorities in New York announced that a Brooklyn construction company had pleaded guilty to second-degree grand larceny for underpaying 21 employees.

The Urban Group then made full restitution of $303,411 to the workers, all of whom were immigrants.

Contractors on public sector projects often commit to paying wages as a certain rate, and this case revolved around Urban’s falsely certifying that it had paid employees on a public schools contract at the prevailing wage rates of $63 an hour when in reality it had paid between $10 and $17, and had offered no overtime or benefits.

The discrepancy was revealed when the company was forced to post the legal wage on signs around its worksites.

As well as making restitution, Urban was debarred from public work in New York state as a contractor or subcontractor for five years.

(Read More)

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Brooklyn contractor pays more than $300K to settle worker wage theft claims (NY)

Posted by National Alliance for Fair Contracting on

Kim Slowey
June 21, 2018

Dive Brief:

Brooklyn District Attorney Eric Gonzalez, together with New York City Department of Investigation Commissioner Mark Peters, announced Monday that a Brooklyn construction company pleaded guilty to second-degree grand larceny for underpaying and committing wage theft against 21 employees. Brooklyn-based contractor The Urban Group made full restitution of $303,411. According to the New York Daily News, Gonzalez said the affected workers were immigrants.

Between 2014 and 2015, according to Gonzalez’ office, Urban employed six non-union workers to perform construction-related work – including demolition, masonry, carpentry and painting – at five schools in Brooklyn and the Bronx. Urban reportedly falsely certified that it paid those workers at prevailing wage rates ($62 to $63 per hour), but only paid between $10 and $17 per hour and no overtime or benefits. Urban ended up owing those workers more than $230,000 in restitution. Urban also reportedly underpaid non-union day laborers hired to perform construction work at other school sites by more than $71,000.

The pay discrepancies reportedly were revealed when the company was forced to post the legal wage on signs around its worksites. The Urban Group on June 13 was sentenced to a conditional discharge and is debarred from performing public work in New York state as a contractor or subcontractor for five years.

Dive Insight:

In December, New York city officials, led by Manhattan District Attorney Cyrus Vance, launched a crackdown on wage theft in the city by announcing the prosecution of area construction companies that had allegedly stolen more than $2.5 million in wages from approximately 400 of their workers by writing them bad checks, not paying them prevailing wage rates or overtime and, in some cases, withholding payment altogether. The DA’s office accused the companies involved of making total underpayments ranging from $13,000 to $700,000.

(Read More)

Automating Wage Theft: A Crime Against Families and Community Made Easy

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CAROLE LEVINE | June 1, 2018

We probably should not be surprised that an industry has been built to support “rounding down” the wages of low paid workers, but there’s evidently a large market for it. Perhaps United Way’s new ALICE initiative should pay attention to this kind of corporate behavior.

It’s all pretty simple. You clock into your job, and the system is set to round the time up or down (sometimes in your favor, sometimes not) if you are a few minutes early or you stay late. The system is set to deduct time for your breaks and your lunch, even if you are not able to take that time because of a crisis or a demanding work project. You don’t get paid for that time worked. And now we know that companies are deducting these hours purposefully.

University of Oregon Associate Professor of Law Elizabeth C. Tippett documented this first and co-authored a 2017 study on timekeeping software and a follow-up article on wage theft. Now, she writes in The Conversation about how employers are using software for the purpose of “wage theft” and are cheating workers out of millions of dollars of wages they have worked and should have been paid for.

“Wage theft” is a shorthand term that refers to situations in which someone isn’t paid for the work. In its simplest form, it might consist of a manager instructing employees to work off the clock. Or a company refusing to pay for overtime hours.

A report from the Economic Policy Institute estimated that employees lose $15 billion to wage theft every year, more than all of the property crime in the United States put together.

That report, however, focused on workers being paid less than the federal or state minimum wage. Our 2017 study, which was based on promotional materials, employer policies and YouTube videos, suggested that companies can now use software to avoid paying all sorts of hourly workers.

Tippett focuses on two main areas of digital wage theft by employers: rounding and automatic break deduction. She did a search to see if there were legal cases brought to reclaim lost wages to these two causes, expecting to find only a few. To her surprise, she found hundreds and hundreds of legal opinions. To quote her from the article, “The study’s methodology does not support quantitative inferences about how often digital wage theft occurs or how much money US workers have lost to these practices over time. But what I can say is that this is not a theoretical problem. Real workers have lost real money to these practices.”

(Read More)

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Plymouth man sentenced for wage theft, ordered to pay $100,000 back to workers (MA)

Posted by National Alliance for Fair Contracting on

By Alana Levene GLOBE CORRESPONDENT
JUNE 07, 2018

A Plymouth man accused of swindling dozens of his construction employees out of their wagespleaded guilty Tuesday in Suffolk Superior Court and ordered to pay them nearly $100,000 in restitution, prosecutors said.

Joseph B. Kerrissey, III, 41, was also sentenced to three years of probation, and barred for bidding on public works projects for five years, state Attorney General Maura Healey announced Wednesday.

Kerrissey and his two companies, J. Kerrissey LLC and Sunrise Equipment & Excavation Inc., pleaded guilty to more than one hundred charges including willful wage and hour violations, larceny, and failure to pay the state’s prevailing wage from 2011 to 2017, prosecutors said.

Kerrissey will have to pay $91,743 to 37 former employees of the two companies,which did public construction projects in Hanover, Weston and West Tisbury, the statement said.

“For years, this employer refused to pay his workers and took intentional steps to make it impossible for them to obtain their wages,” Healey said in the statement. The transgressions included bouncing payroll checks, not issuing checks, shaving hours from paychecks, and paying employees less than their agreed-upon rate, prosecutors said.

Prosecutors launched an investigation after several employees complained about not getting paid by Kerrissey, who was indicted in 2016.

He made up an array of excuses to avoid paying, including “telling employees the money should be in the account, saying they did not earn the wages or had to work for nothing, and threatening to take out criminal complaints if they attempted to use the legal system to obtain their wages,” according to the statement.

(See Article)

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BUILDING A FIGHT FOR BETTER WAGES IN SEATTLE (WA)

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Steve Leigh reports from Seattle on a solidarity rally organized by rank-and-file building trades workers who are fighting to win their fair share.

Steve Leigh
June 6, 2018

SEATTLE IS in a building boom, but most building trades workers can’t afford to live in the city.

That was the message that 150 members and allies of CORE 46, the Caucus of Rank-and-File Electrical Workers in International Brotherhood of Electrical Workers (IBEW) Local 46, delivered at a rally on May 31.

The level of construction activity in Seattle is three times what it was in 2011. Contractors and developers are making money hand over fist. CORE 46 has been fighting for decent union contracts and against an unresponsive union leadership since a poor contract was settlement three years ago. In one section of IBEW Local 46, union leaders imposed an inferior contract after members had voted it down several times. Another section of the local is organizing to make sure the same doesn’t happen to them.

In order to step up the fight, CORE 46 organized a “Cross Trades Rally” of all the construction trades in downtown Seattle. The theme was solidarity between all the trades, and with workers in general.

One sheet metal worker explained, “Even with the building boom, the contractors in Seattle are demanding a wage freeze in our next contract. Outside the city, they’re demanding a 30 percent wage cut.”

Others noted that even workers in trades that are being offered a raise won’t get enough to keep up with the rising cost of living.

(Read More)

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Contractor Hired by San Diego Firm to Pay $1.1M for Wage Theft (CA)

Posted by National Alliance for Fair Contracting on

POSTED BY ALEXANDER NGUYEN
ON JULY 9, 2018 IN BUSINESS

State labor regulators secured more than $1.1 million in wages and penalties from the settlement of a case involving a Long Beach construction project, it was announced Monday

Labor officials alleged that Newport Beach-based Champion Construction Inc., a drywall and framing contractor hired by San Diego general contractor TB Penick for the Browning High School construction project, maintained false payroll records over a six-month period to cover up wage theft affecting 103 workers who were not paid wage and fringe benefits.

California’s wage laws hold general contractor TB Penick jointly liable for the violations of its subcontractor Champion, state Labor Commissioner Julie Su said.

“Prevailing wages create a level playing field for all contractors bidding on public construction projects,” Su said. “This case clearly demonstrates that general contractors who select contractors that don’t play by the rules will pay a heavy price. Under the law, they are responsible for the wage theft of their subcontractors.”

The Labor Commissioner’s Office opened its investigation after receiving a report from the Carpenters Contractors Cooperation Committee in March 2016 alleging public works violations. The investigation included interviews with more than 30 workers, site visits and an audit of pay records for the dozens of workers involved in the project, Su said.

(Read More)

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Senate unanimously OKs wage theft bill (MA)

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UPDATED: 06/22/2018 06:35:35 AM EDT

By Katie Lannan
State House News Service

BOSTON — The Massachusetts Senate voted unanimously Thursday to approve legislation offering new protections to combat what senators characterized as a $700 million problem.

The bill (S 2327) targets the practice of wage theft, through which workers are denied the compensation owed to them by employers.

Despite the Senate’s support for the bill, Minority Leader Bruce Tarr warned it contained a “poison pill” that would make it “legally indefensible” and could keep it from becoming law.

Types of wage theft include failure to pay overtime, minimum wage violations, illegal deductions and working off-the clock, said Sen. Jason Lewis, who co-chairs the Labor and Workforce Development Committee.

“The practice of wage theft comes in many different forms, but they all have the common denominator of hurting workers, their families, and our communities,” said Sen. Sal DiDomenico, the bill’s lead sponsor.

Lewis told of one man, the father of an infant, who worked more than 50 hours a week for a construction subcontractor and was not receiving a paycheck. When the man approached his employer about the lack of pay, he was fired.

According to DiDomenico’s office, 350,000 Massachusetts workers lose an estimated $700 million annually to wage theft.

(Read More)

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Orange County DA to crack down on contractors breaking wage laws (CA)

Posted by National Alliance for Fair Contracting on

By Heather Yakin
Times Herald-Record
Posted Jun 25, 2018 at 11:02 AM

GOSHEN – Lowball wages. Skimping on benefits. Fudging workers’ job titles. Paying off the books.

These are a few of the strategies unscrupulous contractors use to skirt New York’s prevailing wage laws on public projects. Orange County District Attorney David Hoovler says his office will crack down on the illegal practices this summer. Investigators will visit public-works job sites throughout the county to make sure contractors are complying with prevailing wage requirements.

“Prevailing wage laws are designed to protect workers from unscrupulous public-works contractors, so that those workers are paid a decent wage and provided with decent benefits,” Hoovler said. “Dishonest contractors, however, in an effort to make that extra buck, often illegally undercut the required prevailing wages and benefits, to the detriment of the honest workers that they have hired.”

In May, the Orange County District Attorney’s Office joined government agencies in the lower Hudson Valley, New York City and Long Island in the regional Wage Theft Task Force. The task force aims to ferret out and stop employment crimes including violations of the prevailing wage laws that govern public contracts.

New York law sets minimum wages and minimum fringe benefits that contractors must pay and provide to workers on county, municipal and other public-agency construction. Those minimum standards are meant to be comparable to the wages and benefits generally paid to construction industry workers.

A contractor’s failure provide prevailing wage violates state Labor Law, and is punishable by criminal sanctions including fines, imprisonment, and a contractor being barred from bidding or working on public-works projects.

(See Article)

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Prosecutors Treating ‘Wage Theft’ as a Crime in These States

Posted by National Alliance for Fair Contracting on

June 26, 2018
By Chris Opfer

When a business doesn’t pay workers minimum wages or overtime, it usually risks a government investigation or private lawsuit. In some states, companies and their officers may also be looking at criminal charges that could land them behind bars.

“We prosecute companies that have institutionalized theft as a business model,” Manhattan Assistant District Attorney Diana Florence said.

Prosecutors in New York and California are starting to view wage violations as an actual crime more often, as opposed to a matter for civil courts. Their approach could be a model for other states looking to beef up enforcement in an era when the federal wage-and-hour watchdog is shifting its emphasis to voluntary compliance.

Also changing the landscape are a recent U.S. Supreme Court decision that’s likely to increase private arbitration and an immigration crackdown that may make some workers less likely to come forward with complaints.

“Companies take criminal cases more seriously,” Rena Steinzor, a University of Maryland professor who wrote a book about corporate criminal prosecutions, told Bloomberg Law. “If you’re an executive and the cops come to your door, you don’t soon forget it.”

Prosecutors are focusing on particular industries-such as construction, restaurants, janitorial services, garment makers, and home care providers-where they say low wages, temporary job assignments, and businesses that pop up and shut down with little notice leave workers especially vulnerable to abuse. Prosecutors are also packaging “wage theft” investigations as part of a wider look that encompasses health and safety violations, payroll tax fraud, and human trafficking.

Defense lawyers say the threat of criminal prosecution for what has largely been handled in civil courts may give prosecutors too much leverage.

“They can come in with these outrageous demands knowing that there’s no basis in reality,” Allan Bahn, a partner at FordHarrison in New York, told Bloomberg Law. “At times, they can hold” criminal charges “over a contractor and say, ‘If you don’t settle, we’re going to refer you for prosecution.'”

(Read More)