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‘Wealthy developers are taking advantage of labor laws and outdated regulation and enforcement to increase profit margins’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While we purport to stand for fairness, all across our state, wealthy developers are taking advantage of labor laws and outdated regulation and enforcement to increase profit margins by abusing workers.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.

…

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)

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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.

…

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.

…

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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New Memphis program encourages more students to pursue careers in construction (TN)

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BY LAURA FAITH KEBEDE
MAY 14, 2019

About 200 more Memphis students will be able to work toward certification in construction jobs next year thanks to a two-year state grant and an additional curriculum announced Tuesday.

The after-school program, known as Pre-Apprenticeship Certificate Training, or PACT, is Gov. Bill Lee’s latest push to train more high school students to enter careers straight out of high school in areas such as masonry, carpentry, landscaping, painting, plumbing, and construction technology.

“I’ve long known that there is a shortage of those skilled workers because we have left that part of education out of our public school system for decades,” said Lee, who ran a similar training program out of his family business in Williamson County.

“They have giftings and skills that college kids don’t, and yet we do very little to direct paths for them in successful careers,” he added.

The program is meant to help bridge the gap between young people looking for work and companies that can’t fill construction jobs. Memphis has the nation’s highest rate of youth not working or in school. As more building developments spring up, some companies have even turned down projects because they don’t have enough workers, according to local media reports. Memphis was named one of the fastest growing markets in construction in 2017 by the Associated General Contractors of America.

“Understanding what this program is about really gives me as the president of a company in the building industry a huge sigh of relief,” said Jennifer Ransom of The Ransomed Group.

About 100 students at five high schools this year were certified in skills required for construction jobs, but Shelby County Schools hopes to dramatically increase that number through the new program, said Tanika Lester, the district’s manager of college and career technical education programs. About 2,400 students earned certifications across more than a dozen other career fields this year – more than double the district’s goal, Lester said.

(Read More)

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Texas bill would create public database of wage thieves (TX)

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Written by Ryan Johnston
MAY 3, 2019 | STATESCOOP

Under a new bill making its way through the Texas legislature, the state would create a publicly searchable database of companies and employers that commit wage theft – a serious problem in a state that only sees 50 percent of offenders pay back stolen wages.

The bill, introduced last November by Democratic state Rep. Mary Gonzalez, would require the state’s workforce commission to maintain the database of offenders. Wage theft can take different forms, such as employers skimping on overtime for hourly workers or paying below minimum wage, which has been $7.25 per hour in Texas since 2009.

The database that would be created under Gonzalez’s bill would publish the names of each manager, owner and business that purposely withheld wages from employees and never paid them back. Though the bill doesn’t punish offenders monetarily, it would give workers, activists and politicians the ability to identify consistent violators. Right now, that information is only available through a public records request, something potential employees are unlikely to make of their future employer, particularly if they’re undocumented.

But the bill would give offending employers time to pay owed wages before they are added to the database. Companies that are ordered by the state’s labor commission to pay back wages have 30 days to do so; if they don’t comply, the state has 180 days to notify them they’re going to be added to the database, during which they can dispute the offense. Once an employer is added to the database, though, the identifying information would be searchable for three years or until they’re convicted of having committed wage theft.

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WI DWD Holds Worker Misclassification Roundtable (WI)

Posted by National Alliance for Fair Contracting on

05/14/19
WorkersCompensation.com

Waukesha, WI – The Department of Workforce Development (DWD), in collaboration with State Council of Carpenters and Painting and Allied Trades, held a Worker Misclassification Roundtable in Waukesha yesterday to gather information and input on the issue of Worker Misclassification in Wisconsin. The roundtable was hosted by Building Services Incorporated.

“Under Governor Evers, the rights of workers are first and foremost, and by ensuring that employees are properly classified, we are providing workers with the confidence that in the event of a separation or workplace issue, they will have proper supports in place,” DWD Secretary Caleb Frostman said. “The input of our employer partners and other stakeholders on this issue is absolutely vital as we move forward with implementing Governor Evers’ Joint Taskforce to combat Worker Misclassification and Payroll fraud.”

Last year alone, UI Division auditors conducted 2,459 audits, identifying 8,677 misclassified workers and recouping more than $1.5 million in Unemployment Insurance (UI) taxes, interest and penalties due to their efforts. The issue isn’t isolated to the UI program alone. Misclassified workers are often times denied access to worker’s compensation and various labor and civil rights protections. Employers who misclassify workers obtain a competitive advantage over their peers. Without action on this important issue, Wisconsin stands to lose tax revenue, employers who play by the rules lose work, and workers suffer.

Under Wisconsin law, workers are presumed to be employees and subject to tax unless determined by law to be independent contractors. An employer found to be utilizing misclassified workers may be liable for additional tax, interest and penalties. Employers engaged in the construction trades may also be subject to a stop work order. In addition, employers engaged in the painting or drywall finishing of buildings or other structures who willfully provide false information to DWD for the purpose of misclassifying or attempting to misclassify a worker as an independent contractor can be fined $25,000 for each violation.

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CHERYL MARIE STANTON BECOMES NEW ADMINISTRATOR OF U.S. DEPARTMENT OF LABOR’S WAGE AND HOUR DIVISION

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Agency: Office of the Secretary, Wage and Hour Division
Date: April 29, 2019
Release Number: 19-0750-NAT

WASHINGTON, DC – The U.S. Department of Labor today announced Cheryl Marie Stanton was sworn-in as the Administrator of the Department’s Wage and Hour Division.

“I welcome and congratulate Cheryl Stanton as she officially assumes the position of Administrator of the Wage and Hour Division,” said U.S. Secretary of Labor Alexander Acosta. “Cheryl brings with her a distinguished career including prior public service as Executive Director of the South Carolina Department of Employment and Workforce.”

The Wage and Hour Division (WHD) … administers and enforces the prevailing wage requirements of the Davis Bacon Act and the Service Contract Act and other statutes applicable to Federal contracts for construction and for the provision of goods and services.

Stanton was nominated by President Trump on September 2, 2017, and confirmed by the U.S. Senate on April 10, 2019.

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Parr: Prevailing wage bill will stop money from leaving New York (NY)

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By Ron Parr
April 15, 2019

New York faces a statewide problem related to public works. Despite what some may say, if this issue is left unresolved it could have disastrous implications for business, hurting both contractors and workers in New York State.

The lack of a clear definition of public works has created a loophole that can be exploited by bad actors to take millions in public subsidies, turn around and hire out of state contractors and pay workers poverty-level wages. The consequences for New York are vast. Tax dollars meant to invest in local companies and spur economic development are funneling into the back pockets of unscrupulous developers and millions in foregone tax revenue continues to accrue.

Legislation in both houses of the state Legislature in Albany would provide the statewide solution New York needs – from Western New York to New York City, from the North Country to Long Island.

Opponents claim public works legislation would increase the cost of construction and impede economic growth, but when you look at the numbers, this is far off the mark. Far from slowing economic growth, public works legislation would significantly boost the economy both upstate and down, first and foremost: through tax revenue.

Mandating wage standards and taxpayer benefits on projects that received public funding would produce an additional $3.5-6.9 million annual sales tax revenue. At present, local contractors lose out in the bidding process to out-of-state contractors that pay poverty-level wages to gain a competitive advantage. Leveling the playing field so that in-state contractors can compete would ensure these tax dollars stay in New York.

Additionally, the payment of prevailing wages often encourages a more skilled, localized workforce. Skilled workers minimize costs by increasing efficiency and decreasing the amount of time needed to complete a project. A clear definition of public works has the potential to actually reduce overall project costs.

Furthermore, public works legislation would strengthen industries outside of construction including insurance, financial services, health care and the restaurant industry, the combination of which would add billions in revenue and produce thousands of jobs.

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