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Union volunteers help enforce laws against construction wage theft on Multnomah County projects (OR)

Posted by National Alliance for Fair Contracting on

Feb 18, 2020
By Don McIntosh

In the fight against wage theft, the volunteer cavalry has begun to arrive. On Jan. 21, the Multnomah County Commission heard a first report back about a pilot program in which union and community volunteers help County officials police construction work sites to make sure public works contractors are obeying labor laws, such as paying prevailing wage and overtime, not exceeding the mandated apprentice-to-journeyman ratio, and not misclassifying construction workers into lower-paid job classifications.

There are 13 volunteers so far, mostly business representatives from local building trades unions. … Volunteers also get ID badges authorizing them to visit construction work sites, where they speak with workers about conditions-to make sure they match up with what their employers are reporting. Any violations are reported to the Oregon Bureau of Labor and Industries for enforcement.

“Access to the workers is the biggest thing,” said Sheet Metal Workers Local 16 organizer Brian Noble. “They usually don’t know that the company could be stealing money from them. By talking to them, we can find out.”

The first batch of volunteers was trained last August. So far the program includes volunteers from the Sheet Metal, Painters, Carpenters, Operators, Ironworkers, Glaziers, and Bricklayers unions. The software launched Oct. 1. Site visits began later that month. The program is modeled on a similar program used by the Los Angeles Unified School District. …

County commissioners last May approved temporary funding for the pilot program. After hearing the Jan. 21 progress report, commissioners voiced support for making the program ongoing when County Chair Deb Kafoury submits her next proposed budget in April. …

Commissioner Lori Stegman said she’d like to see the program go statewide.
“The term ‘wage theft’ doesn’t really cover it. This is exploitation,” added Commissioner Susheela Jayapal.

(Read More)

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Philadelphia City Council votes to make the Department of Labor permanent, expand its powers (PA)

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The independent department will provide much-needed oversight for the new slate of labor laws enacted in the last couple years

By Nigel Thompson
February 14, 2020

…

On Feb. 13, Philadelphia City Council unanimously passed new legislation to change the city charter and create a permanent Department of Labor within city government to help enforce some of the previously mentioned legislation.

The bill was introduced by councilmembers Helen Gym and Bobby Henon, and co-sponsored by councilmembers Kendra Brooks, Isaiah Thomas, Cindy Bass and Kenyatta Johnson.

“We intend to be a city that really, truly upholds the rights of all people,” said Gym before moving to adopt the bill.

In addition to enforcement, the permanent Department of Labor within city government will also be charged with investigating complaints, and educating workers about their rights and employers of their responsibilities to employees.

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OAG Brings Criminal Charges Against Company, Owner for Wage Violations (PA)

Posted by National Alliance for Fair Contracting on

By Christopher D. Carusone, Steven M. Williams and
Carl L. Engel | January 14, 2020 at 12:50 PM

Employers in Pennsylvania should stay on their toes as the Pennsylvania attorney general (AG) announced charges against a major mechanical contractor engaged in numerous public works projects for crimes arising from a prevailing wage dispute. This marks the first time that the attorney general has brought criminal charges for prevailing wage violations, which was previously enforced only through civil actions. …

Although the new crime called “prevailing wage theft” has not been created in Pennsylvania, the attorney general charges that Good and Goodco violated existing criminal statutes prohibiting deceptive or fraudulent business practices, theft by unlawful taking, theft by deception and other related crimes. While the Office of the Attorney General (OAG) historically has enforced prevailing wage laws through civil action, the charges against Goodco mark the first time that the OAG has sought to enforce them with criminal penalties. Cases of this nature are being prioritized by the OAG’s recently formed fair labor section. When Shapiro ran for AG in 2016, he pledged to create a unit that would “enforce Pennsylvania’s labor laws in partnership with the Department of Labor & Industry and the Pennsylvania Human Relations Commission,” among other pro-worker actions. Accordingly, the fair labor section has made a mission of fighting wage theft, tip stealing, worker misclassification and workplace discrimination.

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Report: Construction Workers Frequently Denied Compensation Coverage (TN)

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Labor brokers are putting workers at risk to avoid paying insurance premiums

By Alejandro Ramirez
Feb 12, 2020

A new report from the Tennessee Bureau of Workers’ Compensation Compliance Program highlights how construction companies and subcontractors are misclassifying workers to avoid paying workers’ compensation. The report details several other practices rampant in the construction industry that deny protections to workers and give noncompliant businesses a financial edge when it comes to securing contracts.

These practices put workers at risk. If workers are injured on the job, for instance, there’s a chance their employers won’t compensate them because they’re listed as independent contractors rather than as employees. Noncompliance also costs the state tax dollars, though the amount of dollars owed is difficult to pin down, especially when employers try to hide information from assessors.

“It’s sort of like an iceberg,” says Amanda Terry, the bureau’s director of compliance. “What we believe that we’re seeing is only 10 percent – the part that’s above the surface.”

The state collects 4.4 percent on workers’ compensation premiums, and the report says that in 2016, insurance carriers may have lost as much as $296 million.

The report says many employers also hire workers through subcontractors known as labor brokers, which frequently misclassify employees. Contractors hire these brokers, who in turn provide workers for a construction site. Many of these brokers have also been accused of wage theft and other compliance issues.

“We find that … when an employer is doing the wrong thing with their workers’ comp, they’re generally doing the wrong thing across the board,” says Terry.

These practices give labor brokers an unfair advantage. Victor White, director at Mid-South Carpenters Regional Council, a union representing carpenters, tells the Scene that a law-abiding contractor “walks in the door at a 20 percent disadvantage” compared to noncompliant businesses when it comes to bidding on contracts.

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Nashville is being built on a pyramid of payroll tax fraud | Opinion (TN)

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According to some estimates, $2.6 billion in payroll tax fraud is lost annually, while Nashville construction projects add up to more than $2 billion.

Victor White, Guest columnist
Dec. 30, 2019

In November, a seldom-covered but far too common crime surfaced in Nashville’s news media: the case of wage theft at a Metro Nashville Public Schools-funded construction site.

A subcontractor working on the project allegedly refused to pay a local group of concrete workers, robbing them of $43,000 in wages for their work at a local school. These laborers have been calling attention to the theft for weeks and finally brought their case to MNPS at a school board meeting.

Members of the Southeastern Carpenters Regional Council were proud to stand with our brothers fighting for fair wages at the meeting, but the problems we face in the construction industry go well beyond one case of wage theft in Nashville.

Fraud is rampant across construction industry

The construction industry today is fundamentally built to allow rampant payroll tax fraud, wage theft, workers’ compensation premium fraud and worker misclassification. At each construction site a general contractor hires a subcontractor to manage different jobs: laying drywall, putting down concrete, or installing plumbing and lighting. Each of those subcontractors hires a labor broker to recruit a team of workers to get the job done. Each subcontractor competes for bids, promising they can get the job done for the least amount of money.

Many subcontractors recruit labor brokers they know will cut corners and trim costs. Sometimes, as in the case of the concrete workers, the subcontractor will fail to pay laborers and outright steal their wages. Other times subcontractors will classify workers as independent contractors, committing payroll tax fraud by avoiding paying taxes on their employees. These schemes cause law-abiding construction employers to suffer as they are underbid by rivals who keep costs down through breaking the law. …

Beyond the rampant fraud that is allowed to continue, the lack of oversight and regulation on construction sites in Nashville led to the largest rise in construction-related deaths over a 2-year period than any time in the last 30 years.

(Read More)

Governor and lawmakers seek penalties against dishonest construction industry employers (TN)

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Posted: 11:58 AM, Feb 25, 2020
By Ben Hall

NASHVILLE, Tenn. (WTVF) – The state is looking to crack down on dishonest employers in the construction industry.

Governor Bill Lee has proposed a bill (SB 2189) that would penalize employers who misclassify workers as independent contractors to avoid paying workers compensation insurance and then change their company name in order to avoid paying fines after they are caught.

Senator Sara Kyle (D – Memphis) has proposed a bill (SB 2404) that would shut down construction sites when employers do not immediately cooperate with state investigators.

The bills follow a NewsChannel 5 investigation which showed the dark side of Nashville’s building boom.

Some employers cheat workers out of overtime pay and cheat taxpayers out of millions of dollars by not paying for workers’ compensation insurance.

“The dishonest ones, we need to run out of the state of Tennessee,” Senator Kyle said.
Governor Lee’s proposal is sponsored by the Republican leaders of the House and Senate.

“We’re thrilled,” said Victor White with the Carpenter’s Union. “It’s a pure pleasure to see this isn’t partisan. The bills are being submitted from both sides of the aisle.”

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Letter to the editor: Restoring prevailing wage would save taxpayers money (WV)

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Jan 16, 2020

As West Virginia continues to fall short on revenue collections, Gov. Jim Justice said his budget proposal is “very conservative” in his State of the State Address. But Justice missed an important opportunity in his speech to get ahead of budget shortfalls that would put students first, hire West Virginia workers and save taxpayers money.

Restoring the prevailing wage should be one of the tools state government uses to get West Virginia through the leaner times ahead. Since prevailing wage repeal, students have suffered from new schools not opening on time and with faulty school construction. This costs taxpayers dearly.

Taxpayers have lost millions of dollars from the repeal of prevailing wage. Multiple new school facilities must be redone or fixed using our government dollars. Contractors who benefit their own bottom line with shoddy school construction built by unskilled workers from out of state cost us local jobs and the state tax revenues from not having more West Virginians employed.

While taxpayers shell out money later this year to redo floors at two new schools in Fayette County, the governor and Republican leadership in the Legislature will be looking for ways to head off shortfalls with spending cuts. But government leaders should also look at the positive impact of bringing the prevailing wage back. This law will employ more West Virginians to build our schools and eliminate wasteful spending from “do overs” caused by poor school construction.

Charles Parker
President, West Virginia State Building and Construction Trades Council

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U.S. DEPARTMENT OF LABOR AND NEW MEXICO DEPARTMENT OF WORKFORCE SOLUTIONS PARTNER TO PROTECT THE STATE’S WORKFORCE AND ENFORCE WAGE LAWS (NM)

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Agency: Wage and Hour Division
Date: February 11, 2020
Release Number: 20-21-DAL

ALBUQUERQUE, NM – The U.S. Department of Labor and the New Mexico Department of Workforce Solutions have signed a Memorandum of Understanding (MOU) to expand and improve the protection of New Mexico’s workforce, strengthen enforcement of wage laws and level the playing field for responsible employers.

The MOU will allow both organizations to work together to protect employee rights, defend law-abiding employers against unfair competition and maximize taxpayer resources.

“This agreement will help us better protect New Mexico’s workers and help the state’s employers understand wage laws and avoid costly non-compliance,” said Wage and Hour Division District Director Evelyn Sanchez in Albuquerque, New Mexico. “Working together, we can more effectively identify those employers that deliberately attempt to unfairly gain a competitive advantage over those that comply with the law.”

The agreement will help both agencies communicate and cooperate more effectively and efficiently in areas of common interest, including cross training staff and providing employers and employees with information about the law. By doing so, the two organizations seek to protect the wages, safety and health of America’s workforce.

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Northam releases recommendations to protect Virginia workers from misclassification, payroll fraud

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Published Sunday, Nov. 24, 2019, 7:52 pm

Gov. Ralph Northam this week released the final report of his Inter-Agency Taskforce on Worker Misclassification and Payroll Fraud, which outlines 11 recommendations to ensure Virginia workers receive the pay, workplace protections, and benefits they have earned.

The report is the result of Executive Order Thirty-Eight signed by Governor Northam in August, which directed the Taskforce to produce updated recommendations to measure and combat misclassification ahead of the 2020 General Assembly session.

An estimated 214,000 Virginia employees are currently misclassified as “independent contractors” by their employers. Among other remedies, the Taskforce recommends increased education for employers and employees, additional funding for investigations into possible wrongdoing, and harsher penalties for businesses that illegally misclassify their workers.

“It’s clear that misclassification is robbing Virginia workers of the pay, benefits, and protections they have earned,” said Northam. “These concrete policy changes will make a tremendous difference for thousands of Virginians and their families, and I look forward to working with the General Assembly to turn these recommendations into law.”

Misclassification keeps workers from receiving fair workplace protections and benefits, creates a competitive disadvantage for Virginia businesses that follow the law, and deprives the Commonwealth of an estimated $28 million in tax revenues each year. The General Assembly has considered the harm of worker misclassification for over a decade.

“After engaging with workers, businesses, and stakeholder groups over the last year, it’s clear that worker misclassification needs to be addressed,” said Chief Workforce Development Advisor Megan Healy. “I am ready to take action to support all workers in Virginia.”

The Taskforce is co-chaired by Secretary of Commerce and Trade Brian Ball and Chief Workforce Development Advisor Megan Healy. Members include representatives from the Virginia Employment Commission, the Workers’ Compensation Commission, the Department of General Services, the Department of Labor and Industry, the Department of Professional and Occupational Regulation, the Department of Small Business and Supplier Diversity, the Department of Taxation, and the Office of the Attorney General.

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Punching In: Slowing Down the DOL Apprenticeship Train

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Bloomberg Law
Nov. 12, 2019

Ben Penn: With National Apprenticeship Week upon us, Team Trump surely would like the public to believe the Labor Department has cleared up an appropriations error surrounding the administration’s principal job training initiative.

The DOL recently admitted to misusing about $1.1 million on the Industry-Recognized Apprenticeship Program that still hasn’t been finalized, dipping into a pot of money designated for a separate apprenticeship program that’s been around for decades. The snafu took place under former Labor Secretary Alexander Acosta, based on orders from an ex-policy adviser. The department says it already has taken multiple steps to correct the issue. Besides, the $1.1 million in question is a drop in the bucket relative to the DOL’s overall budget.

Nothing left to see here, right?

Were it only that simple.

Not everyone’s certain the DOL has resolved the spending mistake. Lingering questions could slow the White House’s effort to put together a final rule to establish the new, industry-led job training model.

We already know the department’s inspector general looking into the potential budget violation and the Democrat-controlled House Education and Labor Committee is continuing its oversight requests.

Now we can add North America’s Building Trades Unions to the list of groups demanding answers. The construction union umbrella organization is one of the few labor groups that have found a way to work on certain issues with the Trump White House. Lately, however, it’s using the IRAP proposal to ramp up attacks on this administration.

Mike Monroe, chief of staff of the building trades group, called news of the misspent money “frustrating.” The department’s Employment and Training Administration vowed during the Acosta regime that it wouldn’t use the new IRAP system to undermine the longstanding registered apprenticeship system, a crucial job training source for the building unions. Monroe wants to be sure the department is weighing all of the public feedback it received on a proposed rule to establish the IRAP system.

The union led a public comment blitz slamming the industry-friendly IRAP proposed rule, with thousands of blue-collar union members opposing the rule.

“If there are ethical lapses in the misuse of funds then we’re rightfully concerned there may well be ethical lapses in the review and consideration of all the public comments-which is to say they’ve already made their minds up here,” Monroe said. “Our membership is watching this issue really closely” and “we are highly concerned that this undefined process that is now being funded inappropriately, it seems, may undermine their ability to safely earn a living in the construction crafts.”

Even if only $1.1 million was misspent, the ongoing scrutiny offers a convenient vehicle for NABTU, Democratic lawmakers, and others on a mission to stop the White House apprenticeship push in its tracks.

(Read More)