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Racine slated to testify in Congress in wake of AG’s report on illegal worker misclassification in DC’s construction industry (DC)

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By Kevin Fasic and Anthony N. Delcollo
August 15, 2019 at 11:10 AM

DC Attorney General Karl Racine is set to testify Thursday at a U.S. House hearing on misclassification of employees as a form of payroll fraud, the subject of a report released earlier this month by Racine’s office on how the practice affects the District’s construction industry.

Racine is one of six witnesses called by the Education & Labor Committee’s Workforce Protections Subcommittee for a 10:15 a.m. hearing on “Misclassification of Employees: Examining the Costs to Workers, Businesses, and the Economy.”

The report commissioned by Racine’s office – “Illegal Worker Misclassification: Payroll Fraud in the District’s Construction Industry” – found that by illegally misclassifying employees as independent contractors, construction companies in the District can evade at least 16.7% of the cost of doing business. The report is the latest step in the attorney general’s broad effort in recent years to curb wage theft in DC.

“Here in the District we believe it is incredibly important to protect workers’ rights, including workers’ rights to fair wages, overtime pay, sick and safe leave, and to help create economic opportunity for all of our residents,” Racine said at a Sept. 10 panel event at Georgetown University. Safe leave enables workers to take job-protected time off to cover their needs if they or an immediate family member are the victim of domestic violence, stalking or human trafficking.

Racine delivered the report’s findings at a forum hosted by the Kalmanovitz Initiative for Labor and the Working Poor, within Georgetown’s School of Continuing Studies. The initiative works to develop innovative strategies and public policies to improve workers’ lives in a changing economy, according to its website.

“Our local economy clearly is growing in DC,” Racine said. “But what we don’t see often enough is the very fact that workers, oftentimes immigrant workers, are being treated poorly and are having their wages taken from them.”

By treating employees as contractors, companies are able to skirt paying payroll taxes and Social Security, overtime, sick leave and other benefits that would otherwise be due. About two-thirds of the savings from misclassification is taken from workers and the remaining third from society at large in the form of unpaid taxes, according to the report. The authors of the study are Dale Belman, a professor at Michigan State University’s School of Human Resources and Labor Relations, and Aaron Sojourner, an associate professor at the University of Minnesota’s Carlson School of Management.

Within DC’s construction industry, “we have things such as a lot of undocumented workers,” Sojourner said at the Georgetown event. “They are not in a good position to go to their boss and go, ‘You know, you owe me an extra $4 an hour. I’ve done the calculations – if you classified me properly, this is what I should be getting.'”

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Businesses: Get Familiar With Recent Changes to Del. Construction Law (DE)

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Significant changes to the law were passed by Delaware’s 150th General Assembly that all construction firms doing business in the First State should be aware of.

By Kevin Fasic and Anthony N. Delcollo
August 15, 2019 at 11:10 AM

Significant changes to the law were passed by Delaware’s 150th General Assembly that all construction firms doing business in the First State should be aware of. Generally, these changes amend the Workplace Fraud Act (19 Del.C. Sections 3501-3515), create the Delaware Contractor Registration Act (19 Del.C. Sections 3601-3611), and establish an apprenticeship training requirement under the Large Public Works Contract Procedures statute (29 Del.C. Section 6962).

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It’s really this simple: To rebuild the middle class, strengthen unions (IL)

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It’s not only good policy. It’s what people want.

By: Edward Smith
August 27, 2019 at 12:41 PM

In downtown Chicago, you’ll find a J.W. Marriott on Adams Street built by union workers and run by union workers. Their wages allow them to own homes, their health care allows them to see a doctor and their pensions promise a secure retirement.

Go only a short distance away to any of a number of other hotels, built by workers who didn’t have a union and run by workers without a union, and you’ll likely find that employees struggle to cover the rent, are more likely to use emergency rooms than visits to the doctor, and have no retirement security.

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Today, more than a third of all workers in the U.S. make less than $15 an hour, according to a National Employment Law Project study based on the Current Population Survey. Nearly 1 in 5 children are living in poverty, about half of older workers have no retirement savings at all, and almost a third of Americans have no health care coverage.

With a union, workers earn on average $9,000 more a year, are a third more likely to have health care coverage and significantly more likely to have a pension. But our nation has gone from a country in which 1 in 3 workers belonged to a union a generation ago to one in which only 1 in 16 private-sector workers belong to a union.

To be sure, global forces have had an impact on America’s working and middle class, but that is too often a generalization and used as an excuse. Global competition and the race to the bottom isn’t the reason that millions of fast-food workers, hotel workers, child care workers, health care workers, and too often construction workers and even teachers live in poverty or are falling behind. The reason isn’t global competition; it’s because they don’t have a union.

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It’s not only good policy-it’s what people want. According to National Opinion Research Corp.’s survey for MIT, nearly half of all workers would join a union if they could-that’s 58 million workers, nearly four times the number who are actually in unions.

People are starting to understand that if you want good wages to raise a family on, if you want good health care, if you want a safe place to work and a pension after a lifetime of work, you need to join a union. It really is that simple, and it’s the economic policy our nation, our businesses and each of us should pursue.

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Worker protection unit formed in attorney general’s office (IL)

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Journal-Courier
Published 12:48 pm CDT
Monday, August 26, 2019

A new unit in the Illinois Attorney General’s Office will be charged with protecting Illinois workers from unlawful employment practices such as wage theft.

Gov. J.B. Pritzker signed legislation on Friday that created a Worker Protection Unit.

The law gives the attorney general’s office express authority to investigate and file suit against employers who violate the Prevailing Wage Act, the Employee Classification Act, the Minimum Wage Law, the Day and Temporary Labor Services Act and the Wage Payment and Collection Act.

The new unit will collaborate with the Illinois Department of Labor to detect unlawful conduct. The unit can also take direct legal action against widespread wage payment violations and unfair labor practices.

A Worker Protection Unit Task Force will be created to facilitate information sharing and collaboration between state and local prosecutors and regulators. The task force will also promote a statewide outreach and enforcement effort to target businesses that violate state worker protection laws. The task force will report on its work to the governor and the General Assembly by December 2020.

The bill takes effect Jan. 1.

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Workers on Digi-Key project paid back wages after violation (MN)

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By: Brian Johnson
October 1, 2019

At least three concrete workers on the $300 million Digi-Key expansion project in Thief River Falls have received thousands of dollars in back pay after a state agency found that a project subcontractor violated state wage laws.

In a Sept. 24 letter to concrete worker Franklin Flores, an investigator with the Minnesota Department of Labor and Industry said Flores’ employer, Millennium Concrete, was “in violation of state labor standards and prevailing wage laws.”

Millennium owed back wages for work performed between April 1 and Dec. 1 of last year, according to the letter.

A laborers’ union official who assisted the employees confirmed to Finance & Commerce that three affected workers each received checks “in the $8,000 to $9,000 range” along with the letter from the department.

Illinois-based McShane Construction is the general contractor on the Digi-Key project.

“While McShane is not aware of the number of workers involved or amounts due them, we are pleased the wage issue is being resolved,” McShane President Jeff Raday said in an email. “We mandate that all of our subcontractors comply with all federal and state minimum wage requirements, including compliance with prevailing wage requirements on projects subject to the Davis-Bacon Act. We are committed to fair compensation for each and every worker on our job sites.”

The Minnesota and North Dakota chapter of the Laborers Union International of North America and others raised concerns about potential prevailing wage violations on the state-subsidized Digi-Key project last June.

“We were happy to finally see it in writing that there were prevailing wage violations. This isn’t just us speculating on it,” Kevin Pranis, the union’s marketing director, said in an interview Tuesday.

Flores and the two other workers, Jairo Cruz and Walter Torres, filed a complaint with the Minnesota Department of Human Rights last week. The complaint alleged the workers suffered discrimination and mistreatment while working on the Digi-Key project.

Cummins & Cummins, a Minneapolis-based law firm, is representing the workers in the human rights claim.

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Labor Training Program Aims To Bring Younger People Into Illinois Construction Trades (IL)

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By ERIC SCHMID
9-12-19

EDWARDSVILLE – A new program that gives high school students hands-on experience with the construction trades kicked off this year.

Over two years, juniors and seniors from local high schools will learn to pour concrete, install pipes, construct scaffolding and other aspects of the trades from certified labor instructors through the Illinois Laborers’ and Contractors Joint Apprenticeship and Training Program.

The program started in Marion, Illinois, last year and expanded to Edwardsville after labor leaders saw its success. It’s part of a larger push from local labor organizations to attract younger people to unions.

The average age of construction labor apprentices in downstate Illinois is 37, said Vicky McElroy, the apprenticeship coordinator at the Edwardsville training facility.

“We thought this was a way to get some good students and young people into the trades,” she said.

Sixteen juniors from Edwardsville High School make up this year’s inaugural class. The students go to the training facility for two hours every morning for a mix of classroom training and hands-on courses.

It’s new territory for the training center’s instructors, who are used to older apprentices.
“In some ways it’s a very big advantage,” said Jason Jackson, one of the course instructors. “If I’m teaching them math or labor history or anything like that, I can actually send them home with homework.”

He acknowledges there are challenges, too. One of those is managing a room full of teenagers, he said, and another is fitting hands-on activities, like pouring concrete, into the two-hour course blocks.

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Gov. J.B. Pritzker announces $23.5 billion in road projects, bridge repairs (IL)

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By Greg Bishop
10-21-19

Gov. J.B. Pritzker unveiled Monday a multi-year plan to spend $23.5 billion on road and bridge projects that were included in Illinois’ $45 billion capital plan, which will be funded through tax and fee hikes.

The Rebuild Illinois plan enacted this summer doubled the state’s gas tax from 19 cents to 38 cents a gallon. Taxpayers have already paid more than $414 million in just two months, $200 million more than the year before. The plan also increased other driving fees. Such funds are going to roads and bridges in the plan.

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Pritzker detailed $23.5 billion in road and bridge spending specifics on Monday in Springfield. The multi-year plan’s detailed projects can be found at IDOT.Illinois.gov.
The plan covers more than 2,000 miles of roadway and 847 bridges.

Illinois Department of Transportation Secretary Omer Osman said state funding would be supplemented with about $9 billion from the federal government.

“And of course that’s going to give us the flexibility of matching any federal funding,” Osman said. “And even if we have another transportation bill coming out of [Washington] D.C., even if that goes up, we still have the ability to match that increased funding.”
Pritzker said the state is also using a federal Transportation Asset Management Plan standard.

“Many other states have been working toward that standard, we are for the first time working toward that standard,” Pritzker said. “What does that mean? It means we’re saving a lot of money for taxpayers as we’re focusing on our roads and bridges.”
The U.S. Department of Transportation said TAMP is “a strategic and systematic process of operating, maintaining, and improving physical assets, with a focus on engineering and economic analysis based upon quality information, to identify a structured sequence of maintenance, preservation, repair, rehabilitation, and replacement actions that will achieve and sustain a desired state of good repair over the lifecycle of the assets at minimum practicable cost.”

Illinois’ TAMP was accepted by the federal government in August.

“We look forward to working with IDOT as you implement the TAMP to achieve and sustain a state of good repair over the life cycle of both pavement and bridge assets and to improve or preserve the overall condition of the National Highway System,” U.S. Department of Transportation Division Administrator Arlene Kocher said.

No money has gone out from Illinois’ plan yet, but Pritzker’s administration said it will use pay-go funds for roads and bridges and borrowing through taxpayer-backed bonds for larger highway projects such as interchanges.

Laborers Local 477 representative George Alexander said the statewide infrastructure plan would put unions back to work.

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Editorial: Wages are low enough (IN)

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Kokomo Tribune
Oct 13, 2019

Many of us are earning what we made last year, maybe even the year before that.

By many measures the economy is improving: the unemployment rate continues to edge down to historic levels while job growth is up. But one stubborn indicator of recovery remains stagnant: Wages in the U.S. have been low and relatively flat since 2009.

Workers’ share of corporate income has plummeted dismally in the past 25 years, according to the Economic Policy Institute, a nonprofit, nonpartisan think tank dedicated to economic policy discussions. The Great Recession, from 2007 through 2012, put significant downward pressure on pay.

Yet in 2015, the Indiana Legislature ended the common construction wage. The Republican-led initiative did away with a state law setting the minimum wage that contractors working on public projects must pay.

Supporters suggested the local boards that determine the wage were artificially inflating wages and said elimination of the provision would lower project costs and save taxpayer money.

A study released only last year indicates the opposite is true.

A Midwest Economic Policy Institute study released in January 2018 said repeal of the prevailing-wage law in Indiana “has failed to produce any taxpayer savings on school construction projects and has had a negative effect on wages, job growth, productivity and other economic and industry indicators.”

The study, which included the work of Colorado State University-Pueblo economics professor Kevin Duncan, found:

* An 8.5% drop in wages in blue-collar construction jobs.

* A 15.1% drop in wages for the lowest-paid construction workers.

* A 5.3% slower rate of productivity compared to neighboring Midwest states with prevailing wage laws.

* A 1.5% slower rate of job growth in public works than neighboring Midwest states.

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Kentucky lawmakers push for $15 minimum wage (KY)

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by: Wave 3 News
August 20, 2019 at 9:53 PM EDT

(WAVE) – Pre-filed legislation would raise the minimum wage for workers in Kentucky.

Sen. Reggie Thomas, D-Lexington, and Rep. Kathy Hinkle, D-Louisa, filed Bill Request 132 and Bill Request 237, respectively.

The bills call for a large increase of the state’s minimum wage over the next seven years.

It would increase to $15 an hour by 2027.

“I have pushed to have this heard before,” Thomas said. “I’m not going to stop. Just because you have a first strike and second strike doesn’t mean you stop swinging.”

Added Hinkle: “It is time for us to step up to the plate and take care of our citizens, and that is what we are sent here to do.”

The General Assembly will take up the matter in January.

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TWO MASSACHUSETTS FIRMS FALL SHORT ON $2.4 MILLION OWED OVER IC MISCLASSIFICATION (MA)

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Staffing Industry Analysts
September 18, 2019

Two Massachusetts construction companies and their officers have fallen short on payments required under a 2016 consent judgement over Fair Labor Standards Act violations that included misclassifying workers as independent contractors, the US Department of Labor reported. Now, labor officials are asking the court to hold them in civil contempt.

The consent judgment required them to pay $2.4 million in back wages and liquidated damages to 478 employees. However, they have paid only $477,900 and currently owe nearly $1.8 million plus interest to affected employees, according to the department.

“These employers conceded that they unlawfully kept the wages of 478 employees and committed themselves to paying those employees under a consent judgment and order of the court. In violation of that order, the employers have unlawfully kept $1,179,842.55 of their employees’ hard-earned wages,” said Maia Fisher, regional solicitor of labor for New England.

“After numerous attempts to resolve the employers’ continued failure to comply with the court order, the US Department of Labor now asks the court to hold the defendants in contempt and impose all sanctions required, including imprisonment if necessary, to ensure compliance with the court’s original order,” Fisher said.

Named in the original 2016 consent judgement and order are Force Corp., AB Construction Group Inc. and employers Juliana Fernandes and Anderson dos Santos.

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