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Biden’s Nominee for Secretary of Labor Wants ‘Wage Theft’ Cops

Posted by National Alliance for Fair Contracting on

SEAN HIGGINS | 4.20.2023 8:00 AM

California’s experience combatting wage theft has been a headache for employers without much in the way of restitution for workers.

Julie Su wants to be the nation’s top cop on wage theft, and she means that quite literally.

Su, President Joe Biden’s nominee to be the Secretary of Labor, believes that allegations of not paying workers what they are due are so serious that the accused—business owners—should be put in handcuffs.

As the head of the California Labor Department under Gov. Gavin Newsom, Su created the state agency’s first-ever criminal investigations unit. Su vowed that the unit would go after those “who underpay, underbid and under-report in violation of the law.” And the wage theft police were born.

“When we first implemented the unit, newspaper headlines warned of armed Labor Commissioner deputies coming to get employers in California and arrest them for crimes. And, well, we are!” Su boasted in a 2015 lecture. “We have filed over a dozen felony wage-theft cases with district attorneys across the state and we have had employers arrested and thrown in jail for the wage theft they committed.”

 

For the first time, Philly enforces its wage theft law by suing an employer who stiffed workers

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The Philadelphia Inquirer
by Juliana Feliciano Reyes
Apr 5, 2023

The lawsuit, against Joe Carvalho of Carvalho Construction, represents an escalation of the city’s efforts to enforce wage theft violations.

For the first time in seven years, the City of Philadelphia has sued an employer who broke the city’s wage theft law.

The lawsuit represents an escalation of the city’s efforts to enforce its 2016 wage theft law. In some cases, it can take years for workers to get paid after they win a wage theft claim; some never get paid at all.

The Law Department, which hired a dedicated attorney last spring to handle these kinds of cases for the Department of Labor’s Office of Worker Protections, has begun taking legal action “to force bad actors into compliance,” a spokesperson for the Office of Worker Protections said in a statement. Lawsuits are “an avenue of last resort,” the spokesperson said.

Bad actors are employers that broke the law but refuse to comply with city orders and pay workers what they’re owed. More than 90% of employers that have broken the law comply, the spokesperson said.

The city filed a complaint in Common Pleas Court earlier this year against Joe Carvalho, a Philadelphia construction company owner who the city says broke its wage theft law twice.

In March 2021, Carvalho didn’t pay an employee for eight days of work, owing him $1,105 in wages and overtime, a city investigation found. Carvalho had said he would pay the worker $130 per day.

The following month, the worker repeatedly asked for his pay and Carvalho ignored the texts or “responded with curse words,” according to a city violation notice.

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US Department of Labor Recovers $633k In Back Wages for 84 Workers for Violations by District of Columbia Development Site’s Subcontractors

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Agency: Wage and Hour Division
Date: March 20, 2023
Release Number: 23-462-PHI

Investigators also find some employers falsified records at Southeast residential development
WASHINGTON – The U.S. Department of Labor has recovered $633,029 in back wages for 84 workers denied their full wages and benefits by subcontractors involved in construction of an affordable housing development funded by the District of Columbia.

Three offices of the department’s Wage and Hour Division conducted investigations of six subcontractors hired to work on The Bridge project in the district’s southeast section by the development’s general contractor, McCullough Construction and its first-tier subcontractors. The division found the employers violated the Davis- Bacon Act, Contract Work Hours and Safety Standards Act, and the Fair Labor Standards Act.

The division recovered $292,193 in back wages for 14 employees of MTZ Electric Service LLC of Laurel, Maryland, after determining the subcontractor misclassified workers as independent contractors, failed to pay prevailing wage rates and the required overtime premium, failed to provide health and welfare fringe benefits, and violated recordkeeping requirements when it omitted workers from certified payroll records and falsified certified payroll records. Colonial Electric Company Inc. of Harwood, Maryland – the first-tier subcontractor that hired MTZ Electric – agreed to pay the back wages.

To resolve the case, MTZ’s owner, Victor Martinez, signed a consent agreement to accept debarment, which prohibits the employer from bidding on federally funded construction projects for a period of three years.

The division also recovered $253,146 in back wages for seven workers of Igloo Construction Inc. in Westminster, Maryland. Investigators found the employer failed to pay proper prevailing wages and fringe benefits, falsified certified payroll records, and hired a labor broker who failed to report its workers on weekly certified payroll records. The division held the first-tier contractor – Titan Mechanical Inc. of Manassas Park, Virginia – liable for the back wages because they failed to include the required Davis-Bacon labor standards’ clauses in their subcontract with Igloo.

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