We need new tools to deal with epidemic of wage theft

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What happened in Amherst should never happen again

TOM JURAVICH
Apr 30, 2022

MASSACHUSETTS NEEDS new legislation to curb wage theft because what happened in Amherst should have never happened and should never happen again. Nine undocumented Hondurans worked 10 hours a day, six days a week for five weeks in a row hanging sheetrock in a new apartment complex in Amherst. Collectively they were owed $50,173 for their labor – but they did not receive one penny in wages. …

Despite Beacon’s commitment to building affordable housing, their progressive social values did not guide the way the development was built. They relied on multiple subcontractors who used undocumented workers who were illegally misclassified as independent contractors. This allowed them to defraud the state by not paying taxes, unemployment insurance, and workers compensation.

Our recent study that examined the records of the Commonwealth found that more than one in six employees in construction are illegally misclassified, and that this costs Massachusetts as much as $82 million annually. And paying workers in cash as independent contractors has created a hothouse for wage theft, as we saw in Amherst.

Beacon Properties hired Keith Construction as the general contractor, which awarded Combat Drywall the contract to hang the sheet rock. Combat, however, has no employees to perform the work and subcontracted the work to Alvarez Drywall.

Alvarez is not registered with the secretary of state in Massachusetts as a business, has no website, no phone number, no real company identity. In fact, Alvarez is not a drywall company. It is simply a labor broker that brought undocumented workers to the job to work as “independent contractors” under Combat supervision. They were not employees and Alvarez would pay them in cash – or Alvarez was supposed to. …

The right to be paid for the work we do in a timely fashion is perhaps our most basic employment right in Massachusetts. No worker in the Commonwealth should ever have to suffer what the workers at the North Square apartments had to go through. We need to hold employers and lead contractors responsible and stop this kind of wage theft with the passage of H1959.

We should all be able to drive or walk through our communities and not have to worry about what is taking place at building and construction sites. As I drive by the North Square Apartments on my way to work now, it stands as a monument to the mistakes that we made and how this can never happen again.

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Maine labor coalition scores major legislative win creating renewable energy jobs

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April 29, 2022
Dan Neumann

The Maine Labor Climate Council, a new coalition made up of a dozen unions from across the state representing a variety of different industries, won its first major victory in the Maine Legislature this week.

The top priority bill for the council this session, LD 1969, introduced by Rep. Scott Cuddy (D-Winterport), went into law without Gov. Janet Mills’ signature on April 25. The law will require prevailing wages and equity standards on all large, utility-scale renewable energy projects including solar, wind, tidal, geothermal and hydropower. …

The new law mandates that contractors pay the prevailing wages customary for each occupation in an industry. The new law will also build a career path for Mainers wanting to get into the clean energy sector by developing pre-apprenticeship programs that will help them access union-registered apprenticeship programs.

LD 1969 also incentivizes employee ownership of renewable energy construction projects as well as the use of Projects Labor Agreements — pre-hire negotiated agreements that require strong labor standards regarding wages, hours, working conditions and dispute resolution methods. The law directs the Maine Public Utilities Commission to consider these factors when acquiring energy under Maine’s renewable portfolio standard, a law that establishes the portion of electricity sold in the state that must be supplied by renewable energy resources.

Maine’s renewable portfolio standard (RPS) establishes the portion of electricity sold in the state that must be supplied by renewable energy resources.

With the passage of the new law, Maine joins other states like Connecticut, Illinois, New York and New Jersey that have recently passed strong labor and equity standards in the renewable energy sector.

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New York Appeals Court Confirms Construction Flaggers Must be Paid Prevailing Wages 

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NEW YORK, April 21, 2022 /PRNewswire/ — A New York appeals court ruled in favor of a class of flaggers who worked for Judlau Contracting Inc., a subsidiary of multi-billion dollar infrastructure contractor OHL Group. The court affirmed that Judlau flaggers who worked on New York public works projects since April 26, 2011 are entitled to recover prevailing wages. The flaggers are represented by Pelton Graham, an employment law firm with offices in New York and California.

This historic decision upholds the rights of not only the hundreds of flaggers who worked on Judlau public works projects but potentially thousands more New York flaggers who have been chronically underpaid. More information on this decision and its implications is available here: https://peltongraham.com/prevailing-wages-for-new-york-flaggers/.

Judlau flaggers worked on a variety of public works construction projects in New York City and upstate New York, including water main, sewer, and other utility repair and maintenance projects requiring street excavation. Even though they worked alongside union construction workers who received prevailing wages, flaggers were often paid just a few dollars over minimum wage rather than the union rate.

Pelton Graham has represented the flaggers since the case was first filed in New York Supreme court in 2017. Even though the flaggers were classified by Judlau as “pedestrian crossing guards,” the flaggers demonstrated that their main responsibility was protecting the safety of the public and construction crews near the job sites and, under the guidelines from the New York City Comptroller, they should be paid as construction laborers.

After years of litigation, the court ruled in favor of the flaggers, finding that the evidence clearly showed that Judlau flaggers worked as safety flaggers and for that reason were eligible for prevailing wages for all of their work performed on New York public works construction sites.

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Davis-Bacon Wage Survey Plan

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USDOL News – April 20, 2022

The U.S. Department of Labor’s Wage and Hour Division announces its Davis-Bacon Wage Survey Plan set to begin in 2022. Construction workers working on Davis-Bacon and related Acts (DBRA) covered contracts must be paid prevailing wages, which are determined by surveys of wages paid on construction projects underway or recently completed within a geographic area.

As the Wage and Hour Division begins its wage survey process, we are reaching out to contractors, contracting agencies, unions, and others in the construction industry to ensure that all stakeholders have an opportunity to participate in the wage survey process.

The division is planning wage rate surveys for Highway construction in:

  • Florida
  • Georgia
  • New Hampshire
  • West Virginia

The division is also planning wage rate surveys for Building construction in:

  • Maine

The division is also planning wage rate surveys for Building, Heavy, Highway, and Residential construction in:

  • Guam

Stakeholders can find the list of 2022 currently planned surveys here, as well as the status of surveys that are currently in progress.

The criteria used to determine areas where a survey should be performed are:

  1. Age of the previous survey
  2. Federal procurement agency plans for construction
  3. Whether stakeholders have requested a new survey of a construction type in a state or locality
  4. Whether public and private data reviews show wages in a locality have sufficiently changed to warrant a new wage determination

The Wage and Hour Division will provide outreach in each survey area to inform stakeholders how to participate in the survey process.

If you have suggestions regarding geographic areas and construction types that you believe should be considered for the 2022 or 2023 Survey Plan, please send your suggestions via email to DB-Wage-Survey-Request@dol.gov.

For more information regarding the Davis-Bacon and related Acts and the Davis-Bacon survey program, please visit the division’s website.

Gov. Wolf Announces $11 Million in Workforce Development Funding for PAsmart Apprenticeship Programs

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Office of the Governor Tom Wolf
April 14, 2022

Governor Tom Wolf today announced awards totaling more than $11 million for 26 apprenticeship programs that will empower Pennsylvania workers to earn while they learn and support Pennsylvania businesses in building a pipeline of talent for occupations in agriculture, manufacturing, healthcare, IT, education, human services, building trades and more.

“Throughout history, apprenticeships have been a vital and necessary part of career education in certain fields,” Gov. Wolf said. “By expanding these important programs to more occupations and industries, we are offering Pennsylvania workers opportunities to train for family-sustaining jobs while helping businesses develop a workforce that will strengthen our economy and our communities.”

Each of Pennsylvania’s 67 counties will be served by one or more of the funded programs.

Department of Labor & Industry (L&I) Secretary Jennifer Berrier said the funding comes at an important juncture for Pennsylvania’s workers and employers alike.

“Today, workers have the power to demand better pay, better benefits and safer working conditions. Pennsylvania’s economic recovery from the pandemic depends significantly on what we do now to respond to those demands,” Berrier said. “Workforce development is most successful when community members collaborate to develop practical solutions to collective problems. The apprenticeship programs funded through PAsmart are precisely the types of solutions we need to meet this moment.”

The grants, offered through L&I’s Apprenticeship and Training Office (ATO), are part of Governor Wolf’s PA Statewide Movement for Accountability, Readiness and Training (PAsmart) framework, which is designed to better align education, workforce and economic development initiatives and funding.

In March, the administration also announced a new round of grant funding available to Pennsylvania apprenticeship programs to develop diverse talent pipelines and reach underrepresented populations within the building and construction trades. A total of $1.5 million is available, and applications are due by April 21.

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DA announces effort to fight wage theft

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BY CITY NEWS SERVICE LOS ANGELES
PUBLISHED 3:43 PM PT APR. 14, 2022

LOS ANGELES (CNS) — Los Angeles County District Attorney George Gascón Thursday announced an agreement with the California Labor Commissioner to bolster the investigation and prosecution of wage theft.

The pact calls on the state’s Department of Industrial Relations to identify and refer investigative leads, complaints and referrals of possible violations to the District Attorney’s Office for civil and criminal prosecution.

“When hard-working people are not paid the money they have rightfully earned, they lose their ability to feed, clothe and house their families, creating a cascading effect that causes our entire community to suffer along with them,” the district attorney said in a written statement.

A 2020 study found that up to 21% of the construction workforce — some 2.4 million workers — are illegally paid off the books or misclassified as independent contractors, according to the District Attorney’s Office, which noted that losses to federal and state treasuries amount to some $8.4 billion.

Frank Hawk, president of the Southwest Regional Council of Carpenters, lauded Gascón for helping to “fight against wage theft and fraud in the construction industry here in Los Angeles, the majority of which is happening in the multi-family residential housing sector.”

Meanwhile, the district attorney also announced a separate pilot pretrial diversion program with Southwest Carpenters for young adults facing criminal charges.

The program, dubbed “Ready,” will provide 20 people between the ages of 18 and 25 with a pathway to a career as a union carpenter with full benefits and a pension, and will partner with Homeboy Industries, Second Call and Volunteers of America to create a pipeline to the union’s pre- apprenticeship programs, including a four-week program in Whittier that is geared toward the under-served people of Los Angeles, including the formerly incarcerated, according to the District Attorney’s Office.

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Report: Wage theft, payroll fraud hurting construction workers

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By JONAH CHESTER (April 11, 2022)

MADISON – A new report finds declining wages in the construction industry, fueled by wage theft and payroll fraud, are pushing more construction workers into social-support programs.

The analysis, by the Labor Center at the University of California-Berkeley, found between about 12% to 21% of construction workers across the country are either misclassified as independent contractors or paid under the table, depriving them of health insurance and other employer-provided benefits.

Peter Barca, secretary of the Wisconsin Department of Revenue, said the practice is cheating.

“These scammers, many of whom are coming into the state surreptitiously, they’re cheating the state out of revenue,” Barca asserted. “Worse, they’re cheating workers by misclassifying them. They’re cheating law-abiding companies within the state, and they really cheat everybody.”

The report noted 15% of construction workers in Wisconsin do not have health insurance, more than twice the rate of all workers in the state, and $207 million is spent annually on social-support programs, such as SNAP and Medicaid, to support families of construction workers.

Last month, a task force empaneled by Gov. Tony Evers released new recommendations to tackle wage theft and payroll fraud, which include bolstering penalties and tracking policies for the illegal practices.

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Illinois lawmakers pass a bill they believe will help stop wage theft

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By Andrew Hensel – Illinois Radio Network
April 9, 2022

Illinois lawmakers have passed a measure supporters say will help combat wage theft amongst constructions workers.

House Bill 5412 was introduced by state Sen. Cristina Castro, D-Elgin. She said the measure would help workers collect wages from subcontractors that have not been able to pay.

If a subcontractor fails to pay an employee, HB5412 states that an employee can file a legal claim with the general contractor for any unpaid wages and benefits.

The bill was met with heavy debate on the last day of the legislative session.

“I think there was a lot of confusion from the opponents on what a current law did or did not do compared to this,” Castro said. “All this does is add another avenue for someone to seek to be reimbursed for lost wages.”

Castro went on to say that this bill ensures workers’ wages are paid.

“This measure will ensure that the hardworking individuals who are employed by subcontractors receive fair compensation should that subcontractor fail to pay them,” Castro said.

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LI firm pays $1.45M in prevailing wage settlement

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By: David Winzelberg
April 6, 2022

The New York State Department of Labor has reached a $1.45 million settlement with a Long Island contractor for failing to pay prevailing wage for a public works project.

The agreement with Calverton-based Miller Environmental Group stemmed from the company’s contract with PSEG Long Island to address oil spills and soil contamination, conduct clean-up, and perform other work supporting utility installation, according to a DOL statement.

Investigators confirmed that Miller Environmental failed to bid the contract at prevailing wage rates and that PSEG Long Island failed to inform Miller Environmental that this contract involved public work. After discussions on the matter, Miller Environmental agreed to pay 88 employees the full underpayment amount, making those payments in January and February.

Contractors and subcontractors must pay the prevailing rate of wage and supplements to all workers under a public works contract based on the locality where the work is performed, according to state law. Third parties contracted on behalf and for the benefit of a public entity are also subject to the prevailing wage requirements. Because PSEG Long Island operates Long Island Power Authority’s electrical transmission and distribution infrastructure, its contracts are subject to those requirements.

“In New York State, we believe workers deserve a fair wage for a fair day’s work,” DOL Commissioner Roberta Reardon said in the statement. “Protecting workers is a top priority to the New York State Department of Labor. We remain vigilant to ensure that employers are properly compensating employees for the work that they do. We will never stop protecting the paychecks of hard-working New Yorkers.”

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Burlington creates wage rules for construction workers on city projects. What that means

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April Fisher
Burlington Free Press
Jan. 19. 2022

Burlington construction workers have won new wage regulations.

The city of Burlington passed an ordinance update Jan. 10 that requires all city-funded construction projects that cost more than $100,000 to be carried out by workers who are paid at or above Vermont’s prevailing wage.

The state prevailing wage for construction workers ranges from $14.48 to $41.44 per hour, depending on the specialization of labor. The state minimum wage is $12.55 per hour.

The new amendment is an addition to Burlington’s “Responsible Contractor” ordinance, which also requires city construction contractors to provide workers’ compensation insurance, have a responsible company safety program, and meet related standards.

The amendment was passed unanimously by the City Council after months of pressure from labor union alliances including the Vermont Building and Construction Trades Council and Vermont State Labor Council, AFL-CIO.

“Ordinances such as these have been adopted throughout the country and have proved to be effective in protecting taxpayers dollars, ensuring the public only pays for quality construction projects that simultaneously stimulate our local economy,” said Vermont AFL-CIO president David Van Deusen.

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