Wage-theft bill sparks debate about repeat offenders (IL)

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By Rebecca Anzel, Capitol News Illinois
Posted Apr 19, 2019 at 11:38 AM

Legislation that punishes employers in Illinois who short their workers’ pay left Republican representatives with open-ended questions about the bill’s impact on state businesses.

Proposed by Chicago Democratic Rep. Celina Villanueva, the House-approved measure enhances current penalties against companies convicted of wage theft – each day an employee’s paycheck is withheld would now be a separate felony offense instead of a misdemeanor.

Businesses would also be barred from working with the state of Illinois for five years.

“This proposal will help working families by ensuring that any business that is willfully withholding wages is held accountable,” Villanueva said.

But during floor debate, Republican representatives questioned whether Villanueva’s characterization of the bill accurately portrayed the practical effects it would have if passed into law.

Villanueva consistently said her bill targets “bad actors” who “repeatedly and willfully engage in wage theft.”

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Carpenters: Industry plagued by tax fraud (MA)

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Picketers aim illuminate illegal employment practices

By Mike LaBella
April 11, 2019

HAVERHILL – More than a dozen union carpenters, including members of New England Regional Council of Carpenters Local 339, stood at the corner in front of City Hall for several hours Thursday morning to illuminate what they claim is rampant tax fraud tainting the construction industry.

They held picket signs and banners bearing statements such as, “Tax fraud impacts me,” and “Construction industry tax fraud costs taxpayers over $80 per second and $2.6 billion per year.”

Organizers said the event was intended to educate the public on the magnitude of illegal construction employment practices, discuss their impact on Haverhill and Massachusetts, and call for a unified front against what they called an insidious activity. Similar events took place Thursday in Lynn, Framingham and Portland, Maine, they said.

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Local 339 issued a statement saying that each year, labor brokers and contractors cheat their tax obligations by misclassifying their hires, such as classifying a carpenter as a laborer, and paying an estimated 1.2 million workers “off the books,” (also known as “under the table”), thereby robbing taxpayers of up to $2.6 billion through lost federal income, employment taxes, and state income taxes.

Union member Adam DiGiovanni of Haverhill said he is reaching out to city officials in hopes they will support the creation of an ordinance that would penalize an employer for engaging in unfair wage practices on large construction projects that involve taxpayer money, including projects that receive tax credits.

“Other communities have passed these kinds of ordinances, including Springfield, Quincy and Lynn,” he said. “There needs to be oversight as right now it’s a free for all.”

He said that such an ordinance would typically speak to large-scale commercial construction projects valued at $10 million or more, and typically not the “local home-builder market.”

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Union-backed budget amendment would combat construction wage theft in Massachusetts (MA)

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By Shira Schoenberg
Posted Apr 24, 4:55 PM

A union-backed amendment expected to be included in the Massachusetts House budget would increase the attorney general’s ability to enforce wage and hour laws in the construction industry.

Rep. Dan Cullinane, D-Boston, introduced an amendment that would spend $500,000 to create a specialized unit in the attorney general’s office to investigate and enforce wage violations in the construction industry.

“This underground economy is real,” Cullinane said. “Bad companies are stealing wages from workers, bad companies are pocketing taxpayer dollars by falsifying payroll records.”

Historically, the construction industry has had frequent occurrences of wage theft.

Attorney General Maura Healey, in a February report, said her office issued 165 civil citations against 66 construction companies in 2018 for wage violations. These companies paid fines of more than $1.23 million and restitution of $1.47 million for 1,030 employees.

Wage theft can include things like failing to pay overtime, failing to pay the required wage for public projects or not accurately documenting how many hours someone works.

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McGarvey of North American Building Trades Unions addresses MBTC convention (MA)

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April 19, 2019 – Construction Design & Engineering

Plymouth, MA The Massachusetts Building Trades Council (MBTC) unveiled its 2019 agenda to elevate the interests of construction workers and union contractors across the Commonwealth. The three-day convention was held at HOTEL 1620.

Sean McGarvey, president of North America’s Building Trades Unions (NABTC), served as keynote. McGarvey represents millions of workers from 14 national and international unions in the U.S. and Canada. He addressed hundreds of local labor leaders and delegates who made the trip to the town for the convention. The delegates at the convention came from 74 member locals, who together represent 75,000 men and women from across the Commonwealth.

The 2019 agenda discussion included policies around Apprenticeship & Training, providing career paths for more women & people of color, workplace safety, building more affordable housing, state and federal legislative priorities, and veteran employment.

Cracking down on the state’s wage theft epidemic remained a top concern, with MassBTC president Frank Callahan calling on the state legislature to provide additional funding for investigators within the Attorney General’s office. “Funds spent on wage enforcement more than pay for themselves in the form of taxes from recovered wages, and fines and penalties paid by the violators,” said Callahan. “Expanding wage enforcement personnel isn’t just the right thing to do, it’s an economically wise investment for taxpayers too.

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Public Work Contractors Should Check Their Payroll, Then Check it Twice… (MD)

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JD Supra
April 10, 2019

Maryland “public work” contractors and subcontractors better be checking their payroll, and then checking it twice, because Senate Bill (“SB”) 300 just came to town! Of course, this level of payroll diligence should already be the norm, but effective October 1, 2019, the stakes for certain public work contractors and subcontractors are just a little bit higher for those that fail to pay the appropriate Maryland prevailing wage rates. As a result, the legal process for their underpaid employees could move much faster.

For those less familiar with Maryland public work contracts, pursuant to Section 17-201(j)(1), “‘public work’ means a structure or work, including a bridge, building, ditch, road, alley, waterwork, or sewage disposal plant, that: (i) is constructed for public use or benefit; or (ii) is paid for wholly or partly by public money.” Notably, however, Maryland prevailing wage laws and the new changes for public work contracts do not apply to: (i) projects performed by a public service company under order of the Public Service Commission; (ii) certain elementary or secondary school projects for which less than 25% of the money used for construction is State money; (iii) certain other public work projects for which less than 50% of the money used for construction is State money; (iv) certain contracts where the contractor is already required to pay prevailing wage rates determined by the federal government; or (v) public works contracts valued at less than $500,000.00.

On March 28, 2019, the General Assembly of Maryland enacted certain new provisions in Section 17-224 of the State Finance and Procurement Article. These provisions allow employees of contractors and subcontractors working on eligible “public works” projects in Maryland, to the extent those employees are not paid the prevailing wage rate established by the Commissioner of Labor and Industry (the “Commissioner”), to immediately sue their employers for the difference between the prevailing wage rate and the amount actually received by the employees. Additionally, to the extent the employer is a subcontractor, both the contractor and subcontractor shall be jointly and severally liable for any violation of the subcontractor’s obligations under Section 17-224.

Under the old Section 17-224, employees were first required to file a complaint with the Commissioner to secure an order of restitution. Only after the employer failed to comply with the order could the Commissioner or the employee bring a civil action in circuit court to enforce the order. Further, the allegedly underpaid employee only had recourse against his or her employer, without an express right to recovery against upstream contractors.

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Dana Nessel, in a nod to Michigan workers, creates payroll fraud unit (MI)

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April 22, 2019
Lindsay VanHulle

Attorney General Dana Nessel on Monday said she will step up investigations of Michigan companies that don’t pay full wages and benefits to their employees.

The announcement is in keeping with her campaign promise to protect workers and labor unions. The event featured a number of union workers and Democratic lawmakers, but no Republicans, the majority party in the state House and Senate.

Nessel, a Democrat, is creating a payroll fraud enforcement unit within the Attorney General’s office to investigate such claims as wage theft, lack of overtime pay and misclassifying workers as independent contractors rather than employees.

The unit will be led by Zachary Risk, an assistant state attorney general, and housed within the office’s labor division. It will coordinate with other state departments and agencies – for example, the Department of Licensing and Regulatory Affairs’ Wage and Hour Division, or the Unemployment Insurance Agency – to investigate complaints against companies.

“These are companies that fraudulently report employees as self-employed and independent contractors, or they’re paying workers under the table,” Nessel said during a news conference in Lansing to unveil the payroll fraud unit.

“They refuse to pay overtime, benefits, health insurance and workers’ compensation. And because they cheat on time cards to keep costs off the books, they’re not paying their taxes,” Nessel said. “The majority of Michigan companies play by the rules, but those who don’t are cheating the system, raking in unfair profits and hurting Michigan in the process.”

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Column: Payroll fraud robs workers of overtime pay and wages (MI)

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By Nate Shannon, Special to MediaNews Group
Apr 27, 201

Every year, unethical businesses are unfairly stealing from their own workers. These businesses misclassify their workers as “1099 Independent Contractors” to rob their workers of overtime pay. In Michigan, minimum wage workers have 27 percent of their wages stolen by their employers.

An analysis by the Economic Policy Institute estimates that Michigan workers were robbed of $429 million in stolen overtime wages between 2013 and 2015. More than 2.8 million Michigan workers were victims of this scam within that short timespan.

When workers are robbed of their wages, they’re more likely to end up in poverty. EPI estimates that one-third of cheated workers depend on public assistance programs to feed their families and pay the bills.

Recently, I joined my fellow legislators in introducing legislation to crack down on payroll and tax fraud to close any loopholes.

To tackle this crime, we must have enforcement with tougher penalties for businesses that take advantage of their employees.

An enforcement unit to investigate violations of wage and hourly laws has been proposed in Michigan by the Attorney General. This team will be made up of professionals from the AG’s office as well as, Michigan’s Occupational Safety and Health Administration, the state Department of Licensing and Regulatory Affairs, the Michigan State Police and other relevant departments. By bringing these departments together, we can better coordinate law enforcement activities and uphold fairness for our employees.

This is a critical piece of the puzzle to protect Michigan workers. I’m also joining my colleagues in co-sponsoring legislative proposals to address wage and overtime theft, by increasing punishments against lawbreakers. Additionally, we will be focusing on protecting those that speak out when they see these unfair practices in the workplace.

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Q&A: Former Commerce chief returns to a familiar role (MN)

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Brian Johnson
April 19, 2019 at 1:17 PM

After a couple of high-profile jobs in state government, Jessica Looman has returned to her roots in the construction trades.

Looman recently spoke with Finance & Commerce about issues such as the construction labor shortage, efforts to bring more young people into the construction industry, and wage theft. …

You previously served as general counsel for the laborers’ union. Did it feel like a homecoming when you took over as executive director of the Minnesota Building and Construction Trades Council?

Yeah, a lot of people have been welcoming me back, which has been really fun. I started my professional career in the labor movement – first in Washington, D.C., and then here in Minnesota. And then I went to law school and when I got out of law school, I became the general counsel for the Laborers District Council of Minnesota and North Dakota, which is the construction craft laborers union. That was a wonderful experience.

I think the combination of my work as general counsel for one of the larger building trades unions, and then particularly the great experience I got as a public servant in Minnesota, really brought me to where I am today.

What are some of your priorities as executive director?

We want to continue to develop public and private investment in infrastructure and construction. We see that we have a role in economic development of Minnesota, our communities and our economy. That includes growing our construction services sector.

The second goal is, how do we make sure we are bringing new people into the construction industry and the construction trades? And how do we make sure we are increasing our diversity, increasing our inclusion?

We currently have about 10,000 registered apprentices that are participating in building trades apprenticeship programs. About 20 percent of those are people of color. That is something we have been focusing on and trying to increase. And we continue to work in the space around workforce development. That includes increasing the number of women in the construction trades.

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(Op-ED) Keith Ellison: Time to Address Wage Theft is Now (MN)

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By Keith Ellison, Union Advocate
April 29, 2019

Frankly, I was shocked.

Here I was, listening to a man through an interpreter describe how the paycheck that he worked so hard for at fairly low wages was delivered to him in a debit card. He didn’t get a regular paycheck or a check stub of any kind: he was told that this debit card represented his pay and that the pay had been deposited for him.

It was hard for him to figure out how much he had actually gotten paid. When he did, he found that he had lost as many as three days’ wages even though he had worked hard every single day.

…

These folks are all victims of wage theft. Wage theft takes many forms: having hours shaved off your paycheck; being forced to work off the clock; not getting paid for overtime; being paid at a lower rate than promised, sometimes below minimum wage; being paid in cash or other forms, with no Social Security, unemployment, or worker’s comp withheld; being misclassified as an independent contractor; and more.

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I was also shocked at the frequency with which wage theft happens. Reputable studies from several years ago estimate that two-thirds of all low-wage workers in the country have experienced at least one form of wage theft. The amount of wages stolen each year in Minnesota may be in the hundreds of millions of dollars: nationally, the Economic Policy Institute has estimated that $50 billion a year is stolen in wage theft. That’s more than three times the value of all the goods stolen through robbery, burglary, larceny and auto theft combined.

Those estimates are 5-10 years old now. In an economy that’s gotten more and more predatory, it’s surely only gotten worse.

One reason people don’t know wage theft happens is because employers often retaliate or threaten to retaliate against people who report it. Another reason is that wage theft commonly happens in the shadows, to the most vulnerable among us, especially immigrants, people of color, and young people. African American workers are three times more likely to have had their wages stolen than white workers, and Latina/o workers are four times more likely. The predators who steal from these folks do so because they figure they’re the least likely to report it.

Too often, wage theft is connected to criminal abuse. According to human-rights advocates, every case of human trafficking also involves wage theft. If you find people being trafficked, you’ll find people whose wages are being stolen. That’s happening right here: in Hennepin County, a contractor has been charged with human trafficking, insurance fraud, and undocumented wage theft. The charges claim that “he knew the men that he had employed were undocumented workers and used that knowledge as leverage to force them to work long hours for less than market pay and without adequate safety protection,” and that “when workers were injured, he told his employees that they would lose their jobs and be deported if they sought medical attention.”

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– Keith Ellison has been serving as Minnesota’s Attorney General since January 7, 2019. As the People’s Lawyer, his job is to help Minnesotans afford their lives and live with dignity and respect. Before becoming Attorney General, he represented Minnesota’s 5th Congressional District in the U.S. House of Representatives for 12 years.

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Labor Union Says Workplace Violations Widespread in N.H. (NH)

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By SARAH GIBSON * APR 16, 2019

A local labor union is urging lawmakers to support legislation to combat what it says is a growing problem with workers compensation and wage theft in New Hampshire.

Members of the New England Regional Council of Carpenters say companies are using a loophole to underpay workers and underreport employees, by misclassifying these employees as independent contractors.

At an event organized by the union Monday, Rudolph Ogden, a deputy commissioner at the N.H. Department of Labor, told NHPR it’s not just carpenters who are getting shortchanged.

“For 20 years people have talked about misclassification and they said it’s all in construction and many said it’s all drywallers,” he said. “Now we’re seeing that it’s not just in construction; it’s in a variety of industries.”

When a company pretends its employees are independent contractors, it doesn’t have to provide workers comp if they’re injured, and it doesn’t pay as much in business taxes.

“We can’t compete with a company that doesn’t pay its workers and that doesn’t pay workers’ compensation,” said Richard Pelletier, of Auburn, N.H. His company, Universal Drywall, was fined for misclassification for projects in Massachusetts, but he says he’s since become a union contractor.

Pelletier and other representatives from union contractors said they do most of their business in Massachusetts because they’re so often undercut by companies in New Hampshire that reduce overhead costs by misclassifying workers and paying many under the table in cash.

The union is backing Senate Bill 151, a Democrat-sponsored bill that would make it easier for the DOL to issue stop work orders, but some in the industry fear it would slow down building projects.

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