Gov. Pritzker Releases Public Works Plan (IL)

Posted by National Alliance for Fair Contracting on

MAY 18, 2019
Radio.com

CHICAGO (WBBM NEWSRADIO) — It’s finally here — a proposed $41.5 billion public works plan called Rebuild Illinois.

Gov. JB Pritzker’s office presented it to lawmakers Friday. If enacted, it would be the first capital construction plan for the state in a decade.

Mike Sturino, president and CEO of the Illinois Road and Transportation Builders Association, says the construction proposed is a 70-30 split between horizontal (roads and bridges) and vertical (buildings).

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In an e-mailed statement, the governor’s spokeswoman, Jordan Abudayyeh, said:

“As a result of working group sessions with lawmakers on both sides of the aisle from both chambers of the general assembly, the administration is working on a preliminary draft of a comprehensive capital plan that will put 540,000 Illinoisans back to work and finally fix our crumbling infrastructure. The administration looks forward to continuing to engaging in productive conversations before the proposal is finalized.”

In an e-mailed statement, Senate Minority Leader Bill Brady of Bloomington said:

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Indiana seeks study to collect unpaid employment taxes (IN)

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By Craig Lyons
May 23, 2019, 3:00 PM

Indiana lawmakers plan to probe lost revenue when employees are listed as contractors or part-time by employers to avoid additional taxes.

A legislative study committee will look at worker misclassification and how to deal with potential lost revenue to the state. A study done by the Building Trades and Construction Council estimates the loss to the state from misclassification at $400 million, but a state-authored report posited the figure is closer to $14 million to $20 million for the state and $5 million to $7 million in local income tax revenue.

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The state says worker misclassification happens when employees are listed as independent contractors or part-time employees, which often leaves them without overtime pay, workers’ compensation and unemployment insurance.

“This is little more than payroll tax fraud committed by unscrupulous contractors who are trying to gain an unfair competitive advantage in the marketplace,” Beck said. “Payroll fraud affects every taxpayer, shrinking public budgets, and even health care costs. It is about regaining lost tax revenue and insurance fund premiums because of dishonest contractors.”

Two reports have studied worker classification, one by the Indiana Building Trades and Construction Council, and a second from the Indiana Department of Revenue and Workforce Development and the Workers’ Compensation Board.

“There are at least four state agencies in state government – the Indiana Department of Revenue, the Indiana Department of Labor, the Worker’s Compensation Board of Indiana, and the Department of Workforce Development – that have the ability to investigate and report on this subject matter,” Beck said. “What this study would do is direct these agencies to tell us how pervasive worker misclassification is in Indiana, and what we can do to combat it.”

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Dept. of Labor forces contractor to pay New Orleans laborers $180,000 back pay, follows class action lawsuit (LA)

Posted by National Alliance for Fair Contracting on

BY ANTHONY MCAULEY
MAY 21, 2019 – 2:06 PM

The U.S. Department of Labor said Tuesday it had forced a Florida-based contractor, Gomez Drywall Construction Inc., to pay 108 Louisiana-based workers nearly $180,000 in back pay for breaking federal rules on overtime compensation.

The Department of Labor said the action followed an investigation into claims Gomez misclassified workers as independent contractors and subsequently failed to pay them overtime when they worked more than 40 hours in a workweek, a violation of the Fair Labor Standards Act.

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Springfield can be the first to end construction tax fraud [Guest viewpoint] (MA)

Posted by National Alliance for Fair Contracting on

Posted May 6, 12:46 PM
By Tim Craw

I’m proud to work in Springfield. The people here are tough, hardworking, and innovative. It’s no surprise that the city is known as ‘The City of Firsts.’

Now, Springfield has the chance to be the first city to stop the epidemic tax fraud taking place in the construction industry. Criminal contractors are cheating the public, honest businesses, and local workers by neglecting to pay their fair share of employment and payroll taxes. It costs the American people $80 every second, and up to $2.6 billion a year in lost federal and state income.

Tax fraud is often committed through underhanded bookkeeping and worker exploitation. Frequently, developers and contractors will use labor brokers to do the dirty work of hiring employees off the record. Approximately 1.2 million workers are paid ‘off the books’ each year in the U.S., allowing contractors to avoid rules around safe jobs sites, deny benefits and workers compensation, skip out on payroll taxes, and even withhold or minimize workers’ payments. Other times a contractor might use ‘on the books’ methods, but cheat by requiring the worker to carry tax and other employment obligations. Nearly 300,000 construction workers are misclassified as ‘independent contractors,’ even though they work a full-time employee’s job.

In Massachusetts, illegal practices like these, particularly wage theft, denied overtime, and minimum wage violations, result in $700 million in losses to employees annually. The Massachusetts Attorney General reported in a 2018 fair labor report that wage theft, worker misclassification, and exploitation of young workers resulted in restitution and penalties of $9.6 million.

The contractors who skip taxes and shortchange workers can gain up to a 30% savings on labor costs, putting honest employers at a disadvantage. They do business the right way but aren’t able to issue as competitive bids, and are cheated of potential work.

The public is also affected by this problem, because when taxes go unpaid, tax pools receive less funding. Public services such as schools, roads, bridges, first responders, and Medicaid and Social Security suffer. The Massachusetts Joint Enforcement Task Force on the Underground Economy and Employee Misclassification reported that in 2014 alone, $16.5 million was recovered in lost payroll taxes and unemployment insurance. The money being pocketed through tax fraud schemes should be helping keep our state safe or close the gap in funding for our schools. These improvements could all be made without creating more debt.

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Tim Craw is a Council Representative with the New England Council of Carpenters and a member of Local 336.

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Lawmakers to vote to make wage theft a felony crime in Minnesota (MN)

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Law also increases state’s budget for enforcement.

By Stephen Montemayor
MAY 23, 2019 – 8:40PM

Minnesota lawmakers and labor groups hailed a bipartisan agreement Thursday to hold employers responsible for holding back workers’ wages, one of the nation’s firmest policies to beat back wage theft.

For the first time, refusing to pay workers would be a felony under an agreement lawmakers plan to vote on in special session. The law would also broaden the state’s ability to prosecute employers in an effort to prevent the loss of an estimated $12 million in unpaid wages from roughly 39,000 Minnesota workers each year.

“In my view it’s the best piece of policy legislation that’s going to pass and I’m very happy about it,” Attorney General Keith Ellison said in an interview Thursday.

Under the new law, wage theft in excess of $1,000 would become a felony crime. It would also penalize retaliation against employees who report wage theft. It also boosts the Department of Labor and Industry’s budget by nearly $4 million to expand prevention and inspection efforts.

Labor and Industry Commissioner Nancy Leppink, who called for the new law and increased resources to enforce it, praised the deal on Thursday.

“The Wage Theft law will level the playing field for Minnesota employers who both play by the rules and create decent jobs for their workers,” Leppink said in a statement Thursday. “The law will also ensure workers receive the wages they have earned.”

The issue emerged as a leading priority for House Democrats early this session and was also backed Sen. Eric Pratt, a Prior Lake Republican. Ellison and Leppink also called for new legislation criminalizing the practice. Wage theft can occur when employers don’t compensate workers through measures like failing to pay overtime, misclassifying employees as independent contractors or declining to pay them outright.

Despite early disagreements on how to craft the law in a way that protected both workers and Minnesota businesses, Pratt and state Rep. Tim Mahoney, DFL-St. Paul, the bill’s House sponsor, managed to strike a deal that was acceptable to state officials and labor groups.

“A couple things we always agreed on is if you earn a wage you should be paid a wage – that was the underlying value statement that we shared which really enabled us to work on this together,” Pratt said. “Every job has its dignity and we need to be able to make sure that every Minnesota worker is treated with dignity.”

Mahoney added that stronger wage theft laws and enforcement would also benefit businesses that find themselves undercut by competitors who can get by with illegally failing to pay their workers. He took issue with language in the bill’s criminal section that requires proof of “intent to defraud,” which he said can be very difficult to prove in many cases.

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OP-ED: CONSTRUCTION WORKERS MISCLASSIFIED AS CONTRACTORS – AN OUTRAGE (NJ)

Posted by National Alliance for Fair Contracting on

RICHARD E. TOLSON
MAY 7, 2019

‘Wealthy developers are taking advantage of labor laws and outdated regulation and enforcement to increase profit margins’

National civil rights and economic justice leaders gathered in New Brunswick late last week for the 2019 Summit for Civil Rights, and I was honored to join legendary leader Congressman Jim Clyburn on a panel at the event. It was privilege for New Jersey to host this event, but it was also ironic considering the injustices happening in our own backyard, and in plain sight.

It’s not often thought of as top-tier issue, but the gross, widespread and often crippling injustices imposed on working men and women in the construction industry in our state measure up as significant abuse and perpetuate structural inequality. While we purport to stand for fairness, all across our state, wealthy developers are taking advantage of labor laws and outdated regulation and enforcement to increase profit margins by abusing workers. And it has to stop.

These are millionaires utilizing middlemen to break state and federal laws by misclassifying full-time workers as contractors – denying them basic benefits and rights like healthcare, committing wage theft by paying below the required living wage, establishing illegal work weeks, paying cash and evading taxes – all to increase already record profits from rents and property sales.

A 2016 Stockton University report conservatively estimated that the developers are stealing more than $25 million in state tax revenue annually via these illegal tactics. But far worse, this theft involves approximately 35,000 workers who are off the books or illegally misclassified as independent contractors. An entire underground economy has been allowed to fester, all built on the abuse of workers, for the benefit of multimillionaires.

Not exactly a high-water mark for civil rights, huh?

(Read Me)

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‘Electronic Bidding Construction Act’ Bill Approved by Assembly Panel (NJ)

Posted by National Alliance for Fair Contracting on

May 16, 2019, 3:00 pm
Insider NJ

(TRENTON) – Legislation sponsored by Assembly Majority Leader Lou Greenwald, Assemblyman Matt Milam and Assemblyman Bruce Land to modernize the bidding process for public works construction projects in New Jersey was approved Monday by the Assembly State and Local Government Committee.

The bill (A-1308), known as the Electronic Bidding Construction Act, would require public contracting agencies that contract for public works construction projects to use electronic procurement technologies, also known as online bidding, when a project’s value exceeds five million dollars.

“In the age of technological innovation, it’s time to update our public bidding process for construction projects,” said Greenwald (D-Camden, Burlington). “Nowadays, there are many e-procurement resources available to help businesses and government agencies conduct business online. These tools make the process simpler and more efficient.”

Under the measure, the State Treasurer would be required to set regulations for the electronic procurement of public works projects The regulations would create a procedure for a public contracting unit to follow once awarded a contract to oversee the administration of the e-procurement process.

A contractor or vendor seeking a contract for public works under the regulations would be classified with the Division of Property Management and Construction in the Department of the Treasury prior to submitting a bid.

“Requests for proposals, requests for information and other bids for public projects can all be done via the Internet,” said Milam (D-Cape May, Atlantic, Cumberland). “We should take advantage of e-procurement tools in order to streamline the public bidding process.”

“E-procurement will help us reduce costs, save time and give us the ability to easily store important records digitally,” said Land (D-Cape May, Atlantic, Cumberland). “This common-sense approach will benefit public contracting and government agencies alike.”

Additionally, regulations established by the State Treasurer would require certain bidding components and would set qualifications for firms providing e-procurement processes.

The bill now heads to the Assembly Speaker for further consideration.

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NJ Labor Department Returns $162K in Back Wages to Truck Drivers After Prevailing Wage Violation Investigation (NJ)

Posted by National Alliance for Fair Contracting on

NJ Labor Department Returns $162K in Back Wages to Truck Drivers
After Prevailing Wage Violation Investigation

May 22, 2019, 3:01 pm

TRENTON – An investigation conducted by the NJ Department of Labor and Workforce Development’s (NJDOL) Division of Wage and Hour Compliance revealed that Richard E. Pierson Construction, Inc. of Woodstown failed to properly pay its truck drivers $162,912.53, in accordance with the Garden State’s prevailing wage laws.

The inquiry, sparked by a formal complaint to NJDOL, determined that 48 of the company’s drivers were properly paid by the employer only when the drivers were on public works job sites, but were not paid the state’s prevailing wage for the time hauling materials to and from those job sites, which is against the law.

“Public contracting is a privilege – not a right, and New Jersey workers deserve to take home every single penny they have earned,” said Labor Commissioner Robert Asaro-Angelo. “We want employers to know that we take the state’s prevailing wage laws seriously, and we will continue to investigate these matters to protect our taxpayers’ investments.”

Richard E. Pierson Construction, Inc. fully cooperated with the investigation and, once advised of the law, agreed to perform a self-audit, repay the due back wages to employees, and pay administrative fees and penalties in excess of $58,000.

The New Jersey Prevailing Wage Act (N.J.S.A. 34:11-56.25 et seq.) establishes a prevailing wage level for workers engaged in public works projects to safeguard their efficiency and general well-being, and to protect workers – as well as employers – from the effects of serious and unfair competition. In New Jersey, these rates vary by county and type of work performed.

For more information on New Jersey’s wage and hour laws, please visit myworkrights.nj.gov.

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Public-works projects must pay prevailing wages (NY)

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OP-ED By John R. Durso
Posted May 23, 2019

Few public policies do more to build strong communities across our region than New York’s prevailing-wage law for public-works projects. It is a job-creating economic engine that puts members of our local communities to work and creates local wealth, revenue and investment. However, this useful public law has been undermined because the definition of public works has been blurred by the amalgamation of public and private financing. A bill passed in the State Assembly and awaiting action by the Senate would require that all Industrial Development Agency-funded projects pay prevailing wages, and would help to ensure that our tax dollars are creating careers with fair wages and benefits for Long Islanders who want to build lives here.

Gov. Andrew Cuomo offered a proposal in his Executive Budget to restore the application of prevailing wages to projects receiving public dollars. New York state was on the verge of restoring these protections as originally outlined by statute in 1897, and enshrined in the state Constitution in 1938, but unfortunately, this policy priority fell off the table.

Opponents of restoring prevailing-wage protections assume that higher construction wages directly correlate to higher project costs. This just isn’t true. The best-case scenario is they are drawing this conclusion based on flawed studies, and at worst they are deliberately misleading communities and elected officials to frame the public discourse for their own profit.

According to a state-funded study by Professor Fred B. Kotler of Cornell University, that conclusion is “simplistic and inaccurate.” It fails to account for the fact that labor costs are a small percentage of total project costs, and ignores the fact that higher-paid workers are often higher-skilled workers who find efficiencies and make fewer errors, resulting in fewer expensive change orders. “Construction workers’ wages should be factored into the overall value of the state’s investment in economic development projects,” Kotler wrote. “The prevailing wage law is itself an economic stimulus and can reasonably be considered as part of a broader economic development strategy for the state.”

According to the Economic Policy Institute, for every $1 spent under prevailing-rate laws, $1.50 is generated for our local economies. When workers earn more, they are able to spend more. Wage protections promote a more localized workforce, ensuring that Long Island residents benefit from our economic development investments. It is clear that holding public construction projects to prevailing rate standards brings wealth into communities. This, in turn, creates the virtuous cycle of local consumption and revenue for public services.

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John R. Durso is president of the Long Island Federation of Labor, representing 250,000 members of 160 AFL-CIO local unions, and president of Local 338 RWDSU/UFCW, which represents 15,000 working men and women in the retail and health care industries.

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Nassau legislators unanimously back Albany prevailing wage effort (NY)

Posted by National Alliance for Fair Contracting on

In a bipartisan move, the county’s lawmakers endorse efforts to pay union wages and benefits to construction workers on building projects that receive tax breaks.

By James T. Madore
Updated May 24, 2019 7:45 PM

The Nassau County Legislature has unanimously backed a move in Albany to pay union wages and benefits to construction workers on building projects that receive tax breaks.

The endorsement comes as supporters and opponents of the higher rate, known as the prevailing wage, attempt to reach a compromise before the State Legislature ends its regular session on June 19.

The endorsement also is a rare show of bipartisanship in Mineola and provides a boost to unions that say real estate developers should be compelled to pay the prevailing wage on projects that win taxpayer aid from state or local governments.

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The prevailing wage bill “will ensure that the taxpayer-funded subsidies we are using to spur development also create strong, middle-class jobs for Long Island construction workers,” the Nassau lawmakers said in a May 8 letter to state Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers).

“It’s no secret that Long Island is an expensive place to live, and in Nassau County, the wages this legislation will codify give construction workers a quality of life they wouldn’t otherwise have,” states the letter signed by Presiding Officer Richard J. Nicolello (R-New Hyde Park), Minority Leader Kevan Abrahams (D-Freeport) and 17 other county lawmakers.

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Under current state law the prevailing wage must be paid to all workers, union and nonunion, on government-funded public-works projects such as roads, mass transit and schools. But that wage rate is not required for those employed on private construction projects aided by industrial development agencies or the state.

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