February 3, 2015
The US Department of Labor’s Wage and Hour Division continues its focus on independent contractor misclassification. This week and last week it announced several companies are being required to pay hundreds of thousands in back pay for IC misclassification and overtime violations.
U.S. Department of Labor Date: February 2, 2015
Wage and Hour Division Release Number: 15-13-SAN
PORTLAND, Ore. — A federal court has ordered local developer David Emami and three of his affiliated companies to pay 33 Portland-area employees $512,290 in unpaid wages and liquidated damages. The U.S. District Court for the District of Oregon agreed with a U.S. Department of Labor investigation that found that Emami and companies Oak Grove Cinemas Inc., Barrington Management LLC and Barrington Venture LLC willfully violated the overtime and record-keeping provisions of the Fair Labor Standards Act. The court also held that Emami violated the anti-retaliation protections of the FLSA by threatening employees who cooperated with the department’s investigation.
“Those who flagrantly disregard basic wage obligations and then try to cover up those actions should think twice before threatening workers when they simply exercise their right to be paid fairly, as the law requires,” said Janet Herold, the department’s regional solicitor in San Francisco. “This judgment makes clear that we will not allow employers to violate the law and then try to bully their way out of trouble.”
The department concluded that those Emami employed as general maintenance, landscaping and construction workers at commercial properties he owned or maintained had two time cards for most pay periods. On one time card, an employee recorded their morning start time and a midafternoon end time. The employees immediately clocked in on a second time card to record the remainder of a day’s work hours. The workers’ duties and rates of pay remained the same each day at each work location.
Some employees misclassified as independent contractors
Date: January 29, 2015
U.S. Department of Labor
Wage and Hour Division
Release Number: 14-2338-DAL
NEDERLAND, Texas — Specialty Painting & Wall Covering Inc. and M & S Enterprise have paid 22 painters and sheetrock installers $108,783 in overtime back wages after an investigation by the U.S. Department of Labor’s Wage and Hour Division. The investigation revealed violations of the Fair Labor Standards Act’s overtime and record-keeping provisions and found that workers at M & S Enterprise were misclassified as independent contractors.
The division’s Houston District Office investigated both construction companies that are jointly owned and operated and employ workers who perform painting, sheetrock installation and finishing projects. Workers of Specialty Painting & Wall Covering were paid for up to 40 hours per week with a check from that company. When workers at Specialty worked more than 40 hours in a week, they were paid for the overtime hours with a separate check from M & S Enterprise at their straight-time rate with no taxes withheld. Workers of M & S Enterprise were misclassified as independent contractors and were paid straight time for all hours worked, including overtime hours.
U.S. Department of Labor Date: January 28, 2015
Wage and Hour Division Release Number: 14-2311-SAN
PORTLAND, Ore. — Sierra Construction Co. Inc. has agreed to pay $87,239 in back wages to 39 employees who worked on The Prescott apartment building, a federally financed construction project in Portland. U.S. Department of Labor investigators found that Sierra and two of its subcontractors failed to pay the prevailing wages required by the Davis-Bacon and Related Acts.
The department’s Wage and Hour Division determined that Sierra, the general contractor, violated the DBRA by improperly classifying workers in lower-paying positions that did not reflect all duties performed by the employees. For example, on the project carpenters and laborers spent significant time working as ironworkers, but were not paid the proper rate, which can be $7 to $15 more per hour than they were typically paid. Sierra also failed to include information listing the required DBRA wage rates in contracts with two subcontractors, who then failed to pay their employees the required prevailing wages.
January 28, 2015
The Affiliated Construction Trades Foundation, a division of the West Virginia State Building Trades, has just released a study by Michael Kelsay, Ph.D., University of Missouri- Kansas City, Dept. of Economics, on the adverse economic impact from prevailing wage repeal in the state. Please follow the link below for a full copy of the report.
January 28, 2015
Recent commentary has just been published by the Illinois Economic Policy Institute. See below for key findings and a copy of the full report.
Key Findings:
· Repealing a prevailing wage law will not grow a state’s construction industry
· Repeal of a state prevailing wage law will further detach worker productivity from worker wages, contributing to the growing problem of income inequality in America.
Posted: Wednesday, January 28, 2015 7:57 am
DES MOINES (AP) – A bill introduced in the Senate would curtail wage theft in Iowa by requiring businesses to be more direct with workers about employment terms, Democrats said Tuesday.
Sen. Bill Dotzler, a Democrat from Waterloo, is co-sponsor of a measure that would require employers to share a written record of employment terms with an employee at the start of a job. Such an agreement would help the worker if there’s suspicion of wage theft in the future and the worker needs to file a formal complaint, Dotzler said.
“This legislation is common sense,” Dotzler said.
The bill would also define penalty terms and expand protection for whistleblowers. It’s identical to a bill that was introduced last session, according to Dotzler. That bill didn’t get very far, but he said he is hopeful a new legislature would seriously consider the latest measure.
January 28, 2015 by Sean O’Leary
Construction workers hired for public projects in West Virginia must be paid a minimum “prevailing” wage and benefits level. This prevailing wage level must equal the market wage rates as determined by the West Virginia Division of Labor, and varies by geographical area within the state and by occupation.1 West Virginia’s prevailing wage law was first enacted in 1933, two years after the federal Davis-Bacon Act, which established a prevailing wage for federal construction projects. Read PDF of report.
Thirty-two states, including West Virginia, have prevailing wage laws for state-funded construction projects, while there is also a federal prevailing wage law for federally funded construction projects.2 These prevailing wage laws help ensure that government-funded construction projects are done with highly skilled workers from the community, increasing productivity and strengthening the economy with good-paying local jobs.
By Jeff Stahla
POSTED: 01/24/2015 11:42:50 PM MST
When the Wage Protection Act went into effect Jan. 1 of this year, it gave the state of Colorado additional tools and authority to address the problem of wage theft.
The act requires employers to keep payroll records for up to three years and gives the Colorado Department of Labor the authority “to mediate situations that are just misunderstandings, investigate when there’s actual wrongdoing, and bring justice,” Rep. Jonathan Singer, a co-sponsor of the act, told the Associated Press.
That includes possible fines against employers who fail to respond to complaints and who are found to have illegally withheld wages from employees who earned them.
The number of state employees involved in investigations is increasing from four to nine, as part of the new law.
The need is clear. The state department of labor has been receiving an average of 5,000 complaints per year, and it has recovered about $1 million in unpaid wages to date, according to a recent I-News report.
By Scott Braddock
January 23, 2015
A report from a bipartisan panel of Texas lawmakers says companies that pretend their employees are independent subcontractors are undermining free markets and encouraging illegal immigration, among other serious problems. The practice of worker misclassification happens when an employer intentionally skirts the law by paying workers as independent subcontractors when they meet the legal definition of employees and should be paid as such.
Preventing workers from being paid as employees denies them basic protections and costs taxpayers millions each year because employers are avoiding payroll taxes on that labor. Employers who follow the law are investing in a sustainable workforce, which is undermined by worker misclassification. Many of those ethical employers have urged lawmakers to do more to contain what they’ve called “a cancer” in the heart of the construction industry.
So, the Texas House Business and Industry Committee this past year took an in-depth look at the issue, including testimony from construction industry leaders, labor advocates and others who are united in combating misclassification.