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Area DA’s pledge crackdown on wage theft, public works violations (NY)

Posted by National Alliance for Fair Contracting on

October 18, 2019

NEWBURGH – County district attorneys in the Hudson Valley, along with representatives from labor and construction associations, Thursday afternoon, explained the detriments associated with construction and wage fraud that has become a growing concern for public projects, subject to an RFP bidding process for which private contractors are eligible to apply.

In New York, as of 2018, $35.3 million were returned to 35,000 workers directly related to wage and workers compensation fraud.

Orange County District Attorney David Hoovler and Dutchess DA William Grady toured the construction underway at the Newburgh campus of Montefiore St. Luke’s Cornwall Hospital on Thursday.

Hoovler said his office has found a steady increase in the county over the last four years and he outlined a number of ways these different fraudulent practices appear that they have discovered.

“Prevailing Wage Fraud is where you don’t pay the proper wage; or, rather than paying the proper wage, you misclassify someone. Let’s just say a laborer is supposed to make $20 per hour, but a painter has to make $40 per hour. You have people painting; but, you classify them as a laborer. So, you should be paying them $40, but you’re saying you’re only paying them $20. That’s a form,” said Hoovler.

Worker’s Compensation, not having the proper Worker’s Compensation, or Worker’s Compensation at all. “It’s very dangerous if someone gets hurt on the job site. Other liability insurances, that contractors don’t carry, not having them; and then, finally, not paying the proper taxes,” he said.

Hoovler explained that these cases will use prosecution as a last resort. Their first priority is to get these contractors educated and then to get them compliant. A main incentive for these fraudulent behaviors is due to trying to rig the RFP process, where the lowest bidder must be taken. Wage fraud and lack of insurance allows these contractors to submit substantially lower bids.

When it comes to projects that are related to public health and safety, following appropriate practices is of the utmost importance because of the real danger shoddy construction, unqualified workers and lack of insurance could result in.

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Construction middlemen put workers in danger by cheating workers comp insurance providers: DA (NY)

Posted by National Alliance for Fair Contracting on

By SHAYNA JACOBS
NEW YORK DAILY NEWS
SEP 05, 2019 | 8:21 PM

A labor broker whose company pairs workers with construction gigs put endangered their employees by scamming workers compensation insurance companies in an “extensive fraud scheme,” Manhattan prosecutors said Thursday.

Labor broker Salvador Almonte, 38, and insurance broker Steven Asvazadourian, 40, denied the employees coverage partly by lying about the size of Almonte’s work force, Manhattan DA Cy Vance Jr.’s office said.

That drastically cut Almonte’s workers compensation insurance premiums, saving him millions of dollars.

But it also put the workers at risk of not being covered for on-the-job accidents or fatalities. More than a dozen of Almonte’s workers were injured and one died while he was playing games with their worker’s comp, Vance’s office said.

New York law requires nearly all employers to carry worker compensation insurance.

But not only did Almonte fail to buy the proper coverage – he declined to cooperate with the state board that decides workers’ claims, prosecutors say.

Almonte allegedly claimed to state officials his annual payroll for two carpenters and two cleaners was $70,000 per year. But in reality, he had dozens of employees, and his payroll for a typical two-week period was $110,000.

Almonte and Asvazadourian pleaded not guilty Thursday to charges including insurance fraud and scheme to defraud in Manhattan Supreme Court. They were released without bail.

Almonte is also under investigation by the IRS for failure to pay taxes.

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Thoughts on labor, unions and prevailing wages (OR)

Posted by National Alliance for Fair Contracting on

I’ve come to my support of labor, unions and prevailing wages in several ways.

Theresa Kohlhoff
Thursday, August 29, 2019

Labor Day signals the end of summer, kids going back to school, my birthday, late season harvests and barbecues. This Labor Day, given the PERS vote in the legislature and the LO council goal to advocate against our state prevailing wage law, as the sole dissenter on the council to this “goal,” I wanted to also make some observations about the significance of the holiday itself.

Oregon’s prevailing wage law, “Little” Davis-Bacon Act, is modeled after the federal law. The statutory purposes are progressive: “To ensure that contractors compete on the ability to perform work competently and efficiently while maintaining community-established compensation standards; to recognize that local participation in publicly financed construction and family wage income and benefits are essential to the protection of community standards; to encourage training and education of workers to industry skills standards and to encourage employers to use funds allocated for employee fringe benefits for the actual purchase of those benefits.”

If a public works project – e.g. schools, roads, pipelines and other public facilities – is going to cost over $50,000, LO must pay prevailing wages. These wages are generally, but not precisely, the rate that union workers get paid in a particular geographical area and are set by the Bureau of Labor and Industries. So for example, the prevailing rates for a public contract in the Portland metropolitan area will generally be higher than, say, in Eastern Oregon.

On the other far end, non-union, non-prevailing wage construction workers may be paid at a cheaper rate, and with or without benefits. Touted as choice and freedom for the worker, it is touted as fiscal responsibility: Paying the differential between the two rates – prevailing and non-prevailing – is denounced as a waste of tax payer money.

I disagree.

If one only focuses on the cost of prevailing wage labor in public contracting versus cheaper non-prevailing wage labor, the economic analysis completely overlooks equal or greater cost savings and the major benefits derived from prevailing wage – to the public entity, to the worker and to the community. Note: I am not advocating for public projects that are beyond our means, or for disregarding prudent budgeting. Raw cost to taxpayers obviously matters. It’s just that true costs have to include far more economic and community factors than just the one criteria: cheapest contract bid. One only has to look at the dismal prospects of our youth as the dark cloud of income inequality and the gig economy reveals who is benefitted by the squeeze and who is gasping from being squeezed.

I’ve come to my support of labor, unions and prevailing wages in several ways. For one, I’ve had practical experience as a lawyer representing a private contractor doing major projects in five states.

He preferred to use union labor and continues to support a strong union.

He got better ratings and therefore cheaper insurance. He was rewarded with an enhanced reputation, even in a fast moving environment, for getting jobs done well and on time. Nothing in this world is perfect but to this business owner the extra labor cost was really minimal when the issue was considered as a whole.

Research confirms and expands these observations. For example, see www.smartcitiesprevail.org/benefits-prevailing-wage/. A union construction worker earns as much as 17% more, lowering the poverty rate by 30%; worksite injuries and fatalities are reduced by as much as 18%; apprenticeships for veterans and POC are expanded by 40%; unfair competition from employers cutting corners on safety/quality is reduced; job productivity is improved by as much as 20%; up to $367 million is saved on food stamps and tax credits. Every $1 of prevailing wage produces $1.50 for the economy! Is this not the way to opportunity? Is this not the way to have confidence and NOT scare ourselves into recessions? The way to build/rebuild a vibrant, resilient, capable middle class that benefits and supports the entire community? I certainly think so.

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George Wade Bridge: painting contractor sentenced to 46 months’ imprisonment (PA)

Posted by National Alliance for Fair Contracting on

by: Kara Urland
Posted:
Aug 16, 2019 / 11:24 AM EDT

HARRISBURG, Pa. (WHTM) – The U.S. Attorney’s Office announced that the painting contractor for the George Wade Bridge Project, Andrew Manganas, age 61, of Canonsburg, Pa., and Panthera Painting, Inc. was sentenced to 46 months’ imprisonment followed by five years’ on supervised release.

Manganas is charged for theft from union plans, wire fraud, and discharge of pollutants into the Susquehanna River. Judge Sylvia H. Rambo also fined Manganas $20,000 and Panthera Painting, Inc. $200,000.

In September 2009, PennDOT awarded a contract for rehabilitation work on the George Wade Bridge to J.D. Eckman as the prime contractor. In October 2009, Panthera Painting was awarded a subcontract by Eckman that covered the blasting, resurfacing, and painting of the structural steel on the George Wade Bridge.

The federal oversight and funding of the contract required each contractor and subcontractor to submit Certified Payroll Reports for every worker and every pay period to certify that the appropriate wage was being paid to each worker.

Manganas and Panthera Painting, Inc. pleaded guilty in January 2018, to submitting false payroll reports that did not accurately reflect the amount workers were being paid.

By under-reporting wages paid, Manganas defrauded the federal agencies paying for the bridgework. By failing to properly remit wages to the unions, Manganas effectively stole money from the workers and the union.

“Andrew Manganas enriched himself by cheating his workers and their unions, and defrauding the U.S. government,” said Michael T. Harpster, Special Agent. “The FBI and our partners will continue to investigate and bring to justice those playing fast and loose with federal funds.”

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District Attorney Krasner Announces New Labor Liaison to Bolster Protections for Workers (PA)

Posted by National Alliance for Fair Contracting on

by Construction Citizen | October 11, 2019

Philadelphia District Attorney Larry Krasner announced the creation of a new Labor Liaison position in the Philadelphia District Attorney’s Office (DAO) to support the Economic Crimes Unit in investigating and prosecuting crimes against workers. Assistant District Attorney (ADA) Danielle Newsome has been appointed to the position, which is the first of its kind in the City of Philadelphia.

An experienced labor attorney, ADA Newsome will focus on crimes including wage theft, purposeful misclassification to avoid payment of benefits and wages, labor trafficking, worker’s compensation fraud, and unemployment compensation fraud.

“I am proud to appoint ADA Danielle Newsome our first ever labor liaison in the Economic Crimes Unit. Her experience and knowledge about workers’ rights and vulnerabilities to exploitation will increase our ability to prosecute crimes committed against people who historically had few avenues to seek justice,” District Attorney Krasner said. “Employers have enormous power over people, particularly low-wage and undocumented workers, and must be held accountable when they abuse that power, break the law, and take advantage of the vulnerable. The addition of labor liaison ADA Newsome to the District Attorney’s Office will help us make sure workers know their rights and that employers know their responsibilities under the law.”

Prior to joining the DAO in September 2019, Newsome was staff attorney for the Health Professionals and Allied Employees Union, American Federation of Teachers (AFT), which is New Jersey’s largest healthcare union. Newsome began her legal career as an associate at the Philadelphia labor and employment law firm of Willig, Williams & Davidson where she represented a variety of public and private sector unions and individual workers. She has also worked as an organizer with unions including the United Food and Commercial Workers (UFCW) and the AFT.

“I’m excited to be in this new position and to have the opportunity to protect some of the most vulnerable workers in our city, while we send the message to unscrupulous employers that their conduct will not be tolerated,” ADA Newsome said. “Through my experience as a labor attorney and my conversations with labor leaders across the region, the need for a labor liaison in the DAO is clear. I look forward to helping more vulnerable Philadelphians secure justice with the overall goal of improving labor conditions across the city, because this kind of work benefits all workers, regardless of their industry.”

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