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Minnesota to open wage theft investigations unit (MN)

Posted by National Alliance for Fair Contracting on

Written By: Tess Williams
Jul 16th 2019 – 12pm

Gov. Tim Walz signed a new law that invested $3.1 million to the Department of Labor and Industry to enforce wage and hour laws. The new law is designed to protect workers from exploitative employers who do not pay them for their work. The legislation adds criminal penalties for employers.

In turn, the attorney general formed a Wage Theft Unit to enforce the new law and litigate the cases. A press release from Attorney General Keith Ellison said wage theft includes “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 even below minimum wage; being paid in cash or other forms like gift cards, with no Social Security, unemployment or worker’s comp withheld; being misclassified as an independent contractor and more.”

Assistant Attorney General Jonathan Moler and investigator Ana Vergara will staff the unit. Any Minnesotan who has experienced wage theft can contact the attorney general’s office at 651-296-3353 or attorney.general@ag.state.mn.us.

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Evers announces members of worker misclassification task force (MN)

Posted by National Alliance for Fair Contracting on

By: Nate Beck
Jul 26, 2019

Gov. Tony Evers on Friday announced appointments to a task force that will examine worker misclassification and payroll fraud in Wisconsin.

The appointments come after Evers in April signed an executive order forming the group to re-examine how the state enforces misclassification – a practice believed to be rampant in the construction industry. The task force is charged with developing recommendations on the topic and reporting its activities and findings to the governor on or before March of each year.

“Individual agencies do a great job at combating this serious issue that adversely affects some of our most vulnerable workers, but through this task force, agency efforts will be better coordinated,” Evers said in a statement. “By evaluating each agency’s approach and investigation methods and sharing best practices, our efforts to support Wisconsin workers who are left without important safeguards like unemployment insurance and labor protections will be more strategic and coordinated.”

The task force will be staffed by the Department of Workforce Development and DWD Secretary-designee Caleb Frostman will serve as chair.

DWD’s Unemployment Insurance Division enforces worker misclassification and in 2018 conducted 2,459 audits of companies, identifying 8,877 misclassified workers. The agency last year collected more than $1.5 million in unemployment insurance taxes, interest and penalties.

“I am excited to chair this important task force and proud of the work that investigators have done and will continue to do to help eradicate worker misclassification,” said DWD Secretary-designee Frostman. “The goal of the task force is to give our front-line staff even more tools and strategies that they can employ as they continue their work to support the Wisconsin worker.”

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Fair Contracting Foundation of Minnesota and ILEPI Address Minnesota’s AG (MN)

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Minnesota’s Attorney General Keith Ellison invited Fair Contracting Foundation’s Mike Wilde and ILEPI’s Frank Manzo to present on the value of prevailing wages to nearly 400 public attorneys and regulators. The history and policy purpose behind prevailing wage laws was covered by FCF. The Illinois Economic Policy Institute’s Manzo gave the audience the findings of a recent study that examined 640 school bid packages. The academic study gave further empirical evidence to the audience of compliance professionals that the projects that required prevailing wages were no more costly than those projects that did not. Attorney General Ellison has already proven to be a champion of Minnesota’s workforce and FCF is encouraged by his commitment to prevailing wage laws.

 

                           

Why Minneapolis passed a wage-theft ordinance that essentially duplicates state law (MN)

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By Jessica Lee | 08/08/2019

The Minneapolis City Council unanimously passed an ordinance that establishes the city’s own set of rules to crack down on wage theft and force employers to be transparent with payrolls. The ordinance is similar to a state law that went into effect last month.

On Thursday morning, the 13-member council rewrote city code to give attorneys within the city’s Department of Civil Rights authority to enforce the municipal law against wage theft – which is when employers don’t pay employees, or pay them less than guaranteed – and require employers to provide earnings statements on a regular basis.

Meanwhile, a larger-scale effort is beginning within the Minnesota Department of Labor and Industry and the attorney general’s office. Last month, Gov. Tim Walz signed a bipartisan bill to establish protections for workers that substantially grow the state’s resources for investigating allegations of wage theft – guidelines that are almost identical to the Minneapolis ordinance. Supporters call the new policies necessary considering the pervasiveness of underpayment that disproportionately affects Minnesota’s communities of color and immigrants.

But while labor and social-justice advocates celebrate the new efforts, which they describe as the toughest of their kind in the country, this question remains: Why is it necessary for Minneapolis to pass an ordinance that basically duplicates state law?

The state law

The state Labor Department estimates that up to 40,000 employees in Minnesota are not fully paid what they have earned each year. Examples of wage theft are when employees clock out but keep working, don’t receive sick and safe time or time and a half for overtime, or work more hours than promised at a flat rate.

That is what prompted the 2019 change to state law. The law set aside roughly $3 million over the next two years to establish a new investigative program and help pay the salaries of about 12 new hires, including investigators, communication personnel and researchers. In an interview last week, Labor Commissioner Nancy Leppink said the department is in the process of finalizing job descriptions. Once administrators establish the new team, she said the department will create new operating and training procedures.

Currently, Labor Department investigators mostly do “records-based” investigations by examining documentation such as employees’ pay stubs. But with the funding boost, investigators will be able to travel to employees’ workplaces to do in-person interviews and look around.

“[Onsite investigations] have greater capacity to detect various, certain kinds of wage theft, and also to detect things like labor trafficking, which you’re not going to see in … simply the review of paper records,” Leppink said. “It’s clear that we need to be getting into workplaces to find workers who may not even be on the books in terms of payroll records.”

She said the state welcomes Minneapolis’ efforts to create its own team of investigators and enforcement regulations, and staff within the city and Labor Department have been meeting regularly to coordinate strategies.

“The problem is significant, and so therefore additional resources to respond to these issues are always welcome and needed,” Leppink said. “Having more hands on deck can only make for improvements on this issue.”

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Governor Murphy Releases Report on Employee Misclassification (NJ)

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Governor Murphy Releases Report on Employee Misclassification
Announces Intent to Sign Law Giving the New Jersey Department of Labor & Workforce Development Authority to Shut Down Job Sites When Violations Are Found

July 9, 2019, 12:08 pm
Insider NJ

ATLANTIC CITY – Governor Phil Murphy today released a comprehensive report from the Task Force on Employee Misclassification, vowing to intensify efforts to curtail the widespread and illegal practice of misclassifying workers as independent contractors instead of employees, which cheats some workers out of benefits and wages, hurts law-abiding business owners, and costs the state tens of millions of dollars a year in lost employment-related tax revenue.

The Governor has given the New Jersey Department of Labor and Workforce Development (NJDOL) new tools to help put an end to misclassification and noted that his administration has already acted on eight of the task force’s 16 recommendations.

Additionally, while addressing the New Jersey State Building & Construction Trades Council’s annual convention, the Governor announced his intent to sign a bill (A-108/S-2557) giving the NJDOL the power to issue stop-work orders whenever an initial work site investigation finds sufficient violations.

“Employee misclassification hurts hardworking New Jersey workers and prevents them from receiving the benefits and the pay they worked for and deserve,” said Governor Murphy. “We know that we cannot build a stronger and fairer economy without strong worker protections. Our Administration has made cracking down on misclassification a top priority, and we will continue to root out contractors who exploit and cheat workers.”

The Governor established the task force by Executive Order No. 25 in May 2018 in response to the widespread problem of employee misclassification. In an audit last year of one percent of New Jersey businesses, NJDOL found that 12,315 workers were misclassified, resulting in $462 million in underreported wages and $14 million in lost contributions to unemployment, disability, family leave and workforce programs, according to the report.

“Misclassifying workers as 1099 employees denies them benefits, robs the State Treasury of needed revenue, and makes it harder for law-abiding businesses to compete,” said Labor Commissioner Robert Asaro-Angelo. “I want to thank Governor Murphy for his leadership on this issue, which is critical to his vision for a stronger, fairer economy.”
Misclassification is especially prevalent in construction, janitorial services, home care, transportation, trucking and delivery services, and other labor-intensive, low-wage sectors.

Among the report’s recommendations are expanding interagency cooperation through coordinated enforcement, data sharing, and cooperation with neighboring states.

NJDOL already has in place a Memorandum of Understanding with the U.S. Department of Labor, enabling the two agencies to more easily share information and jointly develop misclassification cases. A similar Memorandum of Understanding among New Jersey, Pennsylvania, and Delaware was signed today. The reciprocal agreement maximizes the neighboring states’ enforcement efforts through referrals, data sharing, and joint investigations.

The task force held public forums in Newark, New Brunswick, and Atlantic City, where it heard from scores of employees, employers, subject-matter experts, and others impacted by misclassification. Their experiences and comments informed the task force’s report.

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New Law Championed by Greenstein and DeAngelo Bans Worker Wage Theft (NJ)

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By TAPINTO HAMILTON/ROBBINSVILLE STAFF
August 7, 2019 at 4:32 PM

TRENTON, NJ — Workers will no longer need to worry about wage theft under a new law signed on Tuesday by Acting Governor Sheila Oliver to enhance enforcement of New Jersey’s wage and hour law. The measure holds employers accountable for unpaid wages, benefits, or overtime through increased damages and fines.

It also will make victims of wage theft eligible to receive both the wages owed and liquidated damages of 200 percent of wages owed.

“We must ensure that every hardworking individual in New Jersey receives the wages they worked hard to earn,” said Oliver. “I am proud to sign this legislation that will protect the rights of workers, furthering the Murphy-Oliver Administration’s commitment to build a stronger and fairer New Jersey through protecting the right to earn a fair wage.”

The law is sponsored by Hamilton and Robbinsville’s legislative representatives Senator Linda Greenstein and Assemblymembers Wayne DeAngelo. Assemblyman Dan Benson was a co-sponsor.

“The unscrupulous employers robbing the hard working people of New Jersey of their time and money need to face the consequences of their actions,” said Senator Linda Greenstein. “When wage theft is apparent, there must be effective laws in place to protect the workers of our state and to punish the employers. Wage theft is a serious crime and it is about time that our laws reflect this.”

“Above all else, this law is about workers’ rights,” said Assemblyman Wayne DeAngelo. “Employers in New Jersey should be held to a high standard to treat their employees with the decency and legality they deserve. No one should be withheld one penny of the wages they are legally entitled to.”

“In signing this legislation, the Murphy Administration sends a clear message to workers that we have their backs and will protect them from being disciplined for reporting unpaid wages. And, it sends a clear message to the vast majority of businesses that we are aggressively pursuing their dishonest competitors with penalties for wage theft that are now stronger than ever,” said Labor Commissioner Robert Asaro-Angelo.

The new law takes effect immediately.

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NJ Labor Department Returns $170,000 in Back Wages to Laborers and Carpenters After Investigation into Trenton Construction Project (NJ)

Posted by National Alliance for Fair Contracting on

August 9, 2019, 9:44 am

TRENTON – Ten New Jersey laborers will be paid $170,000 in back wages after investigators found Tri County Real Estate Co. did not pay workers the legally required prevailing wage on a construction project at the Trenton East/West Senior Apartments.

“Public contracting is not a right – it is a privilege,” said Labor Commissioner Robert Asaro-Angelo. “We want all employers to know that our department takes the state’s prevailing wage laws seriously, and we will continue to investigate these matters to protect our taxpayers’ investments.”

The construction project received State Economic Redevelopment and Growth Tax Credit Incentive grant funding, and was therefore subject to New Jersey’s prevailing wage laws.

The New Jersey Prevailing Wage Act (N.J.S.A. 34:11-56.25 et seq.) establishes wage levels for workers engaged in public works projects to protect workers, promote workforce development and prevent unfair competition for labor. In New Jersey, these rates vary by county and building trade.

The initial complaint was referred to the New Jersey Department of Labor and Workforce Development (NJDOL) by the state’s federal partners at the U.S. Department of Labor.

As part of the settlement agreement, the company agreed to pay back wages due to employees, and pay $30,000 in administrative fees and penalties.

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

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New York State Passes Bill Allowing Employees to Place a Lien on Employer’s Property for Accusation of Wage Violations (NY)

Posted by National Alliance for Fair Contracting on

Friday, July 26, 2019
The National Law Review

The New York State Assembly and Senate have passed a potentially groundbreaking act (S2844B/A486B) (the “Act”) that would allow current or former employees to obtain liens on their employer’s personal and real property based upon only the mere accusation of wage violations. And it arguably would allow those employees to obtain liens against individuals, including owners, managers and supervisors.

If the Act is signed by Governor Cuomo, New York would join the few states to permit such liens based on an unproven wage violation allegation.

A lien is a legal claim or a right against property. The Act, if passed, would give current and former employees priority in any bankruptcy proceeding involving the employer and, among other things, make it difficult for the employer to sell or transfer ownership of real estate.

The Act would apply to wage claims under both the federal Fair Labor Standards Act (“FLSA”) and the New York Labor Law. That would include claims relating to minimum wage, overtime, spread of hours, call-in pay, uniform maintenance pay, withheld tips, unlawful deductions from wages, or improperly taken meal and tip credits.

The Act defines employer as any person who is an “employer” under the FLSA or New York Labor Law. The definition of “employer” under these statutes is extremely broad – and includes not only the corporate entity that employs the employee, but also managers, executives, supervisors, owners, shareholders, and any other person or entity who exercises control over employees’ working conditions. Thus, this Act creates concerns for anyone who meets this broad definition of “employer.”

Importantly, under the Act, the employee would not have to prove that he or she was underpaid to file the lien. The lien could be filed on the basis of an allegation of underpayment.

If passed, the Act would also streamline the process by which employees could hold the ten largest shareholders of a non-publicly traded corporation, as well as the ten members with the largest ownership interests in a limited liability company personally liable for wage theft.

The Act also contains a provision which would allow employees and their agents to examine a business corporation and LLC’s records to obtain the shareholders’ or members’ names, addresses, and ownership value in the company. In addition, the Act provides that a lien can remain on a property for the duration of a wage lawsuit, which can exert undue pressure on an employer to settle an otherwise defensible, or perhaps even frivolous wage claim.

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Largest Single Wage Recovery in DOL’s 115-Year History (NY)

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Employer Pleads Guilty to Theft of Wages, Convicted of Grand Larceny,
AGL Industries Will Return Stolen Wages to 499 Workers

AUGUST 13, 2019
Albany, NY

Governor Andrew M. Cuomo today announced that a joint investigation between the New York State Department of Labor and the Manhattan District Attorney’s Construction Fraud Task Force has led to a plea agreement that will return approximately $6 million in stolen wages to about 500 welders and iron workers, the largest single wage recovery in DOL’s 115-year history. The investigation began following a referral by the Manhattan District Attorney and Iron Workers Local 361 in February 2018.

“We have absolutely zero tolerance for any business that exploits workers and robs employees of hard-earned wages – period,” Governor Cuomo said. “With this plea agreement we’re holding AGL Industries accountable for its fraudulent practices and returning millions in stolen wages to hundreds of welders and iron workers.”

The joint investigation revealed that from November 2013 until December 2017, AGL Industries – based in Maspeth, Queens County – cheated workers out of overtime pay and wages owed and reported fraudulent financial information to the state. When workers brought concerns about underpayment to the company, they were told that there was nothing they could do to receive their proper wages.

This monumental victory for construction workers-who face some of the most treacherous working conditions of any industry and widespread exploitation-is the latest high-profile takedown by the Task Force aiming to prosecute wage theft to the fullest extent of the law.
The structural steel fabrication company has admitted to 3rd Degree Grand Larceny and will pay back the money on a five-year plan, starting with a $1.5 million payment on August 13th. Company official Dominic Lofaso also pleaded guilty to a Class D felony for Grand Larceny.

In total, AGL will be responsible for $6.25 million in restitution, which in addition to wage restitution also includes $260,855 in contributions due to the state’s Unemployment Insurance fund.
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Matthew Chartrand, Business Manager for the Ironworker’s Local 361 said, “It is our job as labor leaders to assist all workers when they are being wronged. Through the efforts of the Construction Fraud Task Force, as well as the great team at the Department of Labor, one of the bad players in the construction field is being brought to justice. Thanks to all – this is a great job for the benefit of workers!”

In 2018, the New York State Department of Labor collected nearly $35 million and returned that money to approximately 35,000 workers victimized by wage theft and public work violations. Since 2011, DOL has recovered nearly $300 million in stolen wages and returned it to more than 280,000 workers who were cheated by their employers.

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Easthampton City Council to consider wage theft ordinance (NY)

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By MICHAEL CONNORS
Staff Writer
Published: 7/26/2019 3:12:28 PM

Easthampton – The city is exploring new rules that would require construction employers who are either hired by the city or receive municipal tax relief to abide by a set of conditions in an effort to discourage wage theft.

The proposed amendment to the city ordinances is set for a public hearing in front of the City Council on Aug. 7. It requires any bidder, proposer, contractor or subcontractor receiving public funds or tax relief to sign an affidavit stating they will abide by wage laws, attempt to meet certain diversity requirements and submit detailed records of employee work to the city.

City Councilor Owen Zaret said the proposal comes at a time when the city is planning to fund multiple construction projects. He said having rules on the books to protect construction workers from theft was an important step going forward.

“I think it’s important to make a statement through … municipal projects in Easthampton that (workers) are classified, covered and paid appropriately,” Zaret said. “It’s about fairness for workers and workers’ rights.”

Too often, he said, contractors classify laborers as independent contractors instead of employees – allowing them to not have to pay employer taxes on workers or provide employment insurance such as workers’ compensation. There can also be instances of workers not being paid for the amount of hours worked, he said.

Though Zaret said he was not personally aware of any such activity happening in Easthampton, he believes the city should follow the example of other cities like Springfield, which passed a similar ordinance in 2018.

Under the proposal, contractors hired for work by the city must prove, on a weekly basis, that they have not been debarred or found to be in violation of labor laws in the past five years, provide accident insurance, classify workers as employees, pay fair wages and give employment preference to Easthampton residents.

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