Ironworkers, Welders Recoup $6M in Wages (NY)

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Some 500 ironworkers and welders will receive $6 million in wages and overtime pay improperly withheld by a Queens company. Matthew Chartrand, business manager for Ironworkers Local 361, said the settlement under which AGL Industries has begun paying the workers meant that ‘one of the bad players in the construction field is being brought to justice.’

By: RICHARD KHAVKINE / Aug 19, 2019

A Maspeth, Queens, steel-fabrication company copped to cheating hundreds workers out of overtime pay and wages, and agreed to pay out more than $6 million owed to welders and ironworkers, according to its plea deal with the state Department of Labor following a joint investigation with the Manhattan District Attorney’s office.

AGL Industries pleaded guilty to third-degree grand larceny and began paying 499 workers the money owed them with a $1.5-million allocation Aug. 13, Manhattan DA Cyrus Vance Jr.’s office said.

‘Bad Player’

The balance will be paid over five years in what is the largest single wage recovery in the DOL’s history.

The company also admitted to reporting fraudulent financial information and will settle through a $260,855 payment to the state’s Unemployment Insurance fund, the DA’s office said. A company official, Dominick Lofaso, also pleaded guilty to a class D felony for grand larceny.

Welders and ironworkers had complained to company officials about underpayment but were essentially told “tough,” according to the DA’s office. They then took their grievances to Ironworkers Local 361, in Ozone Park, and the DA’s office in February 2018. A subsequent joint investigation by the DA’s Construction Fraud Task Force and the DOL revealed that the company withheld overtime and other wages from workers during a roughly four-year period starting in November 2013.

Matthew Chartrand, business manager Local 361, hailed the settlement, saying “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!”

The DA’s office said the settlement represented a “monumental victory for construction workers,” adding that exploitation of construction workers is widespread despite that trade’s “treacherous” working conditions.

‘Landmark Conviction’

In the statement, DA Vance said the “landmark conviction” would restore “rightful earnings” to the ironworkers and welders. He said the Construction Fraud Task Force has returned about $7.4 million to workers since its creation.

“We are committed to fighting wage theft, which impacts employees across all industries, but is especially common in the construction industry,” he said the statement. He urged workers who believe they have been cheated out of earnings to contact the task force by text message at (646) 712-0298. Messages can be submitted anonymously.

The DOL last year paid about 35,000 workers nearly $35 million it had collected from companies that engaged in wage theft and public-works violations. The department has returned nearly $300 million in stolen wages to 280,000 workers since 2011.

“Wage theft and fraud have no place in New York, and unscrupulous companies who break the law will be held accountable,” Department of Labor Commissioner Roberta Reardon said in the statement from the DA’s office.

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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)

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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)

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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)

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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)

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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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Lawmakers: Misclassifying workers costing millions in revenue (PA)

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Bucks County Reps. John Galloway, Perry Warren and other area legislators support bills that would address the problem of misusing the independent contractor designation.

By Chris English
Posted Sep 4, 2019 at 3:11 PM

Misuse of the independent contractor designation for workers, primarily in the construction industry, is costing the state and federal governments a combined total of about $300 million in lost revenue, two local state lawmakers said during a news conference Wednesday.

State Reps. John Galloway, D-140, and Perry Warren, D-31, are pushing for passage of two pieces of legislation that would address the problem. One, House Bill 716, would establish a joint agency task force on employee misclassifications. The group would investigate the practice and work toward creating solutions to reduce misclassification throughout Pennsylvania. That bill recently passed the House 198-0, Galloway said.

The other proposed bill, HB 715, would among other provisions tighten the definition of what constitutes an independent contractor to only allow use of the term if a worker’s written contract is project and time specific, with no exceptions.

Also attending the news conference, held at Galloway’s Falls office, to speak in support of the bills were Bryan Allen, chief of staff for state Rep. Tina Davis, D-141, of Bristol Township; Amy Masgay, legislative assistant for state Sen. Steve Santarsiero, D-10, Lower Makefield; and union carpenter Kevin Morrow of Perkasie.

Improperly designating workers as independent contractors gets employers out of paying health and worker’s compensation insurance. If those workers are injured, those needs are often taken care of by the state or federal governments and that places additional burdens on taxpayers, Galloway and Warren said.

Misclassifying workers also leads to the nonpayment or underpayment of state and federal income taxes, they added. The millions in lost revenue could be going toward improving schools and infrastructure and other areas, the two lawmakers said.

“This is done deliberately to cut labor costs, pay less in taxes and avoid paying our working class a fair compensation,” said Galloway, of Falls. “This is a practice that hurts the workers who are entitled to the benefits they’ve rightfully earned, their families that they work hard to provide for, and our economy.

“Employee misclassification is nothing less than theft from our families, friends, neighbors and coworkers, and it creates an uneven playing field for law abiding businesses.”

The state has laws on the books to address the problem, but they aren’t strong or detailed enough and the state Department of Labor doesn’t have enough “boots on the ground” to properly enforce them, Galloway said.

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Prevailing wages are important to workers, contractors and taxpayers (PA)

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by: Jack Ramage
Posted:
Aug 16, 2019 / 12:00 AM

The Aug. 11 letter “High Gas Tax Feeds a Broken System” by Nathan A. Benefield, in response to the Aug. 4 article “Why Is Pa.’s Gas Tax So High? We’ve Got a Lot of Roads,” identifies three reasons. He is correct on two of those reasons; Pennsylvania gas taxes fund mass transit operations and pay for much of the state police budget, not just roads. Prevailing wages however, are not a contributing factor.

Prevailing wages do not increase the cost of publicly funded construction projects. In those states that have repealed prevailing wage laws, the promise of lower-cost public construction projects never materialized. Casually concluding that eliminating prevailing wage requirements will automatically reduce construction costs is an out-of-touch misconception of today’s economic environment.

Every segment of the economy is competing desperately for qualified workers. Allowing contractors to lower construction workers’ wages in order to gain an unfair advantage over the competition will cause a race to the bottom and exacerbate the shrinking workforce crisis resulting in costlier projects, substandard workmanship and delayed completions due to a shrinking number of skilled workers in construction. States throughout the country are reporting shortages in skilled construction labor. These shortages are especially acute in states where prevailing wage laws have been repealed.

Prevailing wages create a level playing field by establishing reasonable wages and benefits for workers building our state’s infrastructure projects. Without prevailing wages, unscrupulous contractors will import cheap labor and eliminate good paying jobs for the citizens of Pennsylvania, creating an environment where no one wins: not the workers, not the local contractors and, most of all, the taxpayers of Pennsylvania.

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Central Pennsylvania contractor charged for theft of workers’ wage and benefits (PA)

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Sep 30, 2019

Harrisburg – Attorney General Josh Shapiro announced charges against a Centre County contractor after a Grand Jury investigation found that he underpaid workers on Prevailing Wage projects totaling more than $64,000 in wages and benefits for at least five years.

Scott Cameron Good, 56, of State College, is the owner of Goodco Mechanical, Inc., a mechanical contractor based in Centre County who worked on public works projects in Clearfield, Centre and other Pennsylvania counties. Good was charged with Perjury, Tampering with Public Records, and False Swearing. Goodco was charged with Theft by Unlawful Taking, Deceptive and Fraudulent Business Practices and related charges.

The charges are the result of a 21-month Statewide Grand Jury investigation that originated from allegations of theft of wages and benefits from employees on a $16 million public works project in Clearfield County for the Pennsylvania Department of Transportation in 2014. The investigation found that Good and Goodco violated prevailing wage laws by underpaying wages and claiming unlawful benefits credits on the Clearfield County PennDOT project, as well as other prevailing wage projects since at least 2010.

Scott Good previously worked as Vice President for Allied Mechanical and Electrical, Inc. In 2006, the company was found to be in violation of Pennsylvania prevailing wage laws and was sanctioned by the Pennsylvania Department of Labor and Industry for the same practice that he is accused of operating at Goodco.

“Pennsylvania’s prevailing wage laws are designed to protect workers and ensure an even playing field in the bidding process for government contracts,” said Attorney General Josh Shapiro. “The defendants are charged with violating these laws and cheating our hardworking laborers out of thousands of dollars in wages and benefits. Scott Good already knew that his conduct was illegal because his former company was sanctioned for similar violations more than a decade ago, yet he brazenly flouted the law again and continued the scheme at Goodco. I’m proud to work with Clearfield County District Attorney William Shaw Jr. to put a stop to this theft and stand up for workers.”

“Clearfield County laborers deserve to be paid fairly for their hard work,” said District Attorney William Shaw, Jr. “The defendants allegedly took advantage of their workers and violated prevailing wage laws by operating a misclassification scheme inside the company. My office will work alongside the Attorney General’s Office to hold Scott Good and Goodco accountable for their crimes and deliver results for the workers he underpaid.”

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Officials, activists fight wage theft on the border (TX)

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Mexican consulate and U.S. Labor Department seek to end workplace exploitation

by: Julian Resendiz

Posted:
Aug 23, 2019 / 03:01 PM CDT

EL PASO, Texas (Border Report) – The Mexican consulate and the U.S. Labor Department office in El Paso on Friday signed a cooperation agreement to fight wage theft and other labor violations committed against immigrants.

The consulate said it will begin a weeklong labor-rights education campaign on Monday and encourage Mexican citizens who experience workplace exploitation to file a complaint with the local Wage and Hour Division of the Labor Department.

“Everyone who works in the United States, regardless of immigration status, has rights in the workplace that are guaranteed by law,” said Mauricio Ibarra Ponce de Leon, Mexican consul general in El Paso. “We will support our community and ensure that their labor rights are being respected. This agreement allows us to send people who come to us to the appropriate (U.S.) authority.”

Jacobo Valenzuela, a representative of the Wage and Hour Division in El Paso, said his office receives some 600 labor-related complaints a year. Most complaints come from workers in the restaurant, construction and agricultural industries, he said.

Ibarra said wage-theft – which occurs when an employer short-changes an employee for hours worked, refuses to pay overtime already performed or withholds payment altogether – isn’t the only issue faced by immigrant workers on the border. The weeklong Spanish-language education campaign known as “Labor Rights Week” will also include information on filing workplace injury claims, sexual harassment and human-trafficking complaints, as well as workplace safety issues.

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