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PRIME CONTRACTOR ON NEW YORK FEDERAL RESERVE BANK PROJECT PAYS $420,335 IN BACK WAGES AFTER U.S. DEPARTMENT OF LABOR INVESTIGATION (NY)

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: March 29, 2019
Release Number: 19-0440-NEW

NEW YORK, NY – Tishman Interiors Corp. – the prime contractor for a renovation project at the Federal Reserve Bank of New York – has paid $420,335 in back wages to resolve violations of federal wage laws following a U.S. Department of Labor Wage and Hour Division (WHD) investigation.

WHD found Tishman, which served as the bank’s construction manager on the federally funded project, violated the Davis-Bacon and Related Acts (DBRA), the Contract Work Hours and Safety Standards Act (CWHSSA), and the Copeland Act. The company subcontracted electrical and cable installation work to subcontractors Alan Joel Communications, Crewforce, and Teksystems Management.

Investigators found the bank failed to include DBRA provisions and required wage rates in its contract with Tishman. This omission led to Tishman and the three subcontractors paying their employees at hourly rates lower than the prevailing wages for the work they performed, a DBRA violation. WHD also found all four employers violated the CHWSSA when they failed to pay required prevailing wages for overtime when employees worked more than 40 hours in a workweek. Their failure to prepare and maintain certified payroll records and to sign compliance statements in the payrolls resulted in Copeland Act violations.

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Connections: Discussing the debate over the “prevailing wage” (NY)

Posted by National Alliance for Fair Contracting on

By EVAN DAWSON & MEGAN MACK * APR 1, 2019

Are construction workers paid fairly in New York State? The legislature has been debating the so-called “prevailing wage.” Non-union workers and business leaders have warned that expanding the prevailing wage will cripple businesses that want to expand, while stalling the clean energy industry. Union leaders have joined many Democrats in calling for more wage protections, arguing that the business community always claims the sky is falling when they have to pay people a little bit more.

Our guests debate it:

(Listen to Discussion)

Laborers Graduate Apprentices, Urge Union-Built Affordable Housing (NY)

Posted by National Alliance for Fair Contracting on

April 20, 2019
By Steve Wishnia

NEW YORK, N.Y.-The about 60 Laborers International Union apprentices lined up in a side room at St. Vartan Armenian Cathedral in Manhattan Apr. 17, clad in brilliant saffron-orange caps and gowns.

“When you graduate, you’re part of this forever,” Local 79 apprentice coordinator Timmy Valentine told them.

…

Introducing the commencement speaker, Public Advocate Jumaane Williams, Prohaska praised him for his work last year getting the City Council to pass the Construction Safety Training Act, a bill to expand the amount of safety training required for workers on construction projects in the city.

“Just because we build this city doesn’t mean people have to die,” Williams said. He noted that the 111 new journeymen had completed 400 hours of classes and almost 4,000 hours on the job over three years or more. “In particular, I’m thankful to see so many women graduating,” he added.

“We all know how important it is to have union jobs on construction sites,” he continued. “A union is not just a job, it’s a career.”

One thing the city can do, he said, is to make sure that the affordable housing it builds is affordable to the people who build it. He got a standing ovation when he said that if the city is giving subsidies or tax breaks to developers, “we deserve union jobs.”

Prohaska made the same point in an op-ed article published in City Limits earlier in the day. “My vision is one where developers put Bronx residents to work-and help them pursue careers-building new housing they can afford to live in,” he wrote. “Here’s how to get it done: as developers seek city and state subsidies for new construction projects in the Bronx, they should be required to hire local residents and create union career-path jobs in construction.”

Without expanding union construction careers, he said, residents, especially immigrants and people of color, will be “vulnerable to poverty wages, economic stagnation, and exploitation whenever they work on unregulated construction sites.”

(Read More)

Multnomah County takes on wage theft (OR)

Posted by National Alliance for Fair Contracting on

Apr 16, 2019 | Workers Rights
By Don McIntosh

A proposed pilot program could make Multnomah County a trailblazer in fighting wage theft in construction. To make the case for it, a panel of union members and advocates addressed the County Commission April 9 about the many ways unscrupulous contractors cheat workers out of wages – and why the complaint-driven process at Oregon’s understaffed Bureau of Labor and Industries isn’t enough to stop it. [Watch their presentation here.]

Wage theft is the underpayment or nonpayment of wages or benefits that workers are legally entitled to receive. It’s not uncommon in construction – even on taxpayer-funded public construction projects that employ compliance staff to guard against it. Those staff need help, several union representatives told commissioners.

And they’d get that help under the proposal put forward by Multnomah County Chair Deborah Kafoury’s office. As detailed in a budget memo, the proposed Labor Compliance Pilot Program would allow knowledgeable members of the public, such as union representatives, to volunteer to help enforce prevailing wage and wage and hour laws on County construction projects. The volunteers would have access to the certified payroll records that contractors submit to the County – and be allowed to visit worksites to interview workers.

Modeled on a program at Los Angeles Unified School District, the pilot project would assign a half-time-equivalent staff person to train and support 10 volunteers who would visit the County’s construction projects.

…

Thirteen ways to cheat your employees out of wages

Wage theft is far too common in construction. Here are some ways crooked contractors do it.

  • Don’t pay them. Hire a day laborer for a day’s work, then stiff them when the work is done.
  • Don’t pay for breaks. Tell them the company’s in too big a hurry for them to take meal and rest breaks.
  • Don’t pay them overtime. You can’t afford time-and-a-half.
  • Tell them they’re independent contractors. That gets you out of paying employer Social Security tax, unemployment insurance, workers’ comp, and maybe even minimum wage.
  • Don’t pay them for time in transit. Tell them to pick up the company truck and equipment and drive 50 miles to the work site, but pay them only for the hours they work on site.
  • Call them apprentices. Pay your journeymen the apprentice wage.
  • Work them off-the-clock. Ask them to do a little prep work before they clock in, or a little cleanup after they clock out.
  • Ask for kickbacks. You gave them the prevailing wage job, didn’t you? Have them pay some of those higher wages back to you, or to the foreman, or labor broker.
  • Pay piece rate. So what if it ends up less than minimum wage?
  • Deduct things from their wages. Why should you pay for the tools or supplies they need to do the job?
  • Misclassify them. On a prevailing wage job, pay them at the laborer rate while they do carpenter or painter work.
  • Leave off benefits. Prevailing wage includes money for benefits, but who can afford to offer them?
  • Lie about the number of hours they work. Pay the prevailing wage. Just tell the project superintendent that your employees worked half as many hours as they really did.

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Union: Construction tax fraud costs governments $450B annually (PA)

Posted by National Alliance for Fair Contracting on

Bob Bauder
Monday, April 15, 2019 3:37 p.m.

Several hundred carpenters’ union members and public officials rallied Monday in Downtown Pittsburgh to call for an end to construction industry fraud.

Union officials said unscrupulous contractors and labor brokers rob the public of federal and local tax revenue by paying workers cash “under the table,” misclassifying them as independent contractors and failing to pay such benefits as workman’s compensation and unemployment.

The fraud costs local governments across the United States an estimated $450 billion annually in lost tax revenue, officials said.

“When you talk about tax fraud, it’s about people that are cheating,” said Bill Waterkotte, eastern district vice president of the Keystone Mountain Lakes Regional Council of Carpenters. “They’re not paying taxes. They’re paying cash. Four hundred and fifty billion (dollars), in evading taxes. That could go to building our roads and bridges, our schools, our veterans, helping the people who need help, and they’re stealing it.”

The union estimates fraud costs Pennsylvania governments about $200 million each year, but offered no specifics for the Pittsburgh region.

…

Pittsburgh City Council late last year approved a resolution proposed by Councilman Corey O’Connor that created a task force to investigate the issue. O’Connor said the members plan to offer future legislative remedies to council and the mayor.

…

“We are going to go after those bad workers, those people that take our tax money, that take your jobs because subcontractors and contractors are undercutting city bids. We have to stop that,” O’Connor said.

(Read More)

Milwaukee Building and Construction Trades Council Statement on Gov. Evers’ signing Executive Order to Protect Wisconsin Workers (WI)

Posted by National Alliance for Fair Contracting on

“Standing with working families, Governor Tony Evers’ took a huge step to protect Wisconsin from corrupt employers who cut costs by scamming workers and the state of Wisconsin.”

By Milwaukee Building and Construction Trades Council
Apr 15th, 2019 02:39 pm

MILWAUKEE – Milwaukee Building and Construction Trades Council Statement President Dan Bukiewicz released the following statement in response to Gov. Evers’ signing Executive Order #20 to Protect Wisconsin Workers:

“Standing with working families, Governor Tony Evers’ took a huge step to protect Wisconsin from corrupt employers who cut costs by scamming workers and the state of Wisconsin. It’s refreshing to have a governor not only focused on what is best for workers and Wisconsin’s future. I applaud Governor Evers for taking immediate action to protect the middle class,” said Milwaukee Building and Construction Trades Council Statement President Dan Bukiewicz.

“Contracted work is an often-overlooked driver of eroding labor standards, rising income and wealth inequality, persistent structural racism and occupational segregation, and the shifting of power away from workers and toward corporations.

Many industries in which people of color are over represented are characterized by the widespread use of independent contractors. These contracted jobs offer no unemployment insurance protections or even a minimum wage,”added Bukiewicz.

(See Article)

(See PDF Copy of Executive Order)

Union construction workers protest tax fraud in their industry on Tax Day (WV)

Posted by National Alliance for Fair Contracting on

By Jake Flatley in News
April 15, 2019 at 3:26PM

CHARLESTON, W.Va. – Monday marked Tax Day in the United States so the United Brotherhood of Carpenters in Charleston wanted to make a stand against those who in the construction industry who participate in tax fraud.

Local 439 and Local 436 gathered dozens of construction workers and laborers from around the state to protest the “underground” economy that they say goes on with thousands of independent contractors nationwide.

“We are trying to point out the effect of the underground economy, the payroll fraud, paying in cash, illegal classification of independent contractors,” Scott Brewer with the Keystone Mountain Lake Regional Council of Carpenters (KML) in Charleston said.

“What it does to the communities, to the tax base of the communities, to the states and federal governments and how it harms legitimate companies that play by the rules.”

The protest occurred in front of the United States Post Office location on Lee Street in Charleston and Brewster said it joins in with other events in the Construction Industry Tax Fraud Day of Action.

According to Brewer, around 20-percent of construction work in the United States is done under the table which he says boils down to $66 billion a year is lost in the United States.

“That’s money that is lost to cities like Charleston,” he said. “They don’t get their user fee, their local B&O tax. The state of West Virginia gets no payroll taxes, the federal government gets no payroll taxes like Medicare and Social Security.”

(Read More)

Fair Wages are Good for the Economy, Albany Should Pass an Expanded Prevailing Wage (NY)

Posted by National Alliance for Fair Contracting on

March 28, 2019 | by Kevin Duncan

As the next state budget is being debated in Albany, increasing attention is being paid to the state’s prevailing wage laws. With so much misinformation out there, let’s set the record straight. Paying construction workers a middle class wage is a net positive for New York’s economy.

Specifically, the issue is how construction workers are paid for projects that receive public funds. Since 1897, projects receiving taxpayer funds are required by New York State law to pay fair wages to their workers. The problem is that developers are increasingly exploiting loopholes created by the growth of public-private projects, which blur the lines of what’s considered “public work.”

One recent example is the Chelsea assisted living facility on Long Island. The project received $15 million in public funding, but because that money came through the Brookhaven Industrial Development Agency (IDA), there was no requirement to pay workers a middle-class wage.

Legislation currently making its way through the legislature would close that loophole.

The bill,S 1947(Ramos)/A1261(Bronson), would clearly define “public work” as any large-scale project that is paid for with public funds. By ensuring that projects subsidized with public funds support middle class wages, the law will strengthen the middle class and the state’s economy.

Chances are that you’ve seen folks in the business community argue the opposing viewpoint – but when you look under the surface, those arguments tend to rely on overly simplistic or just plain inaccurate information.

Take the industry-backed argument that paying workers a middle-class wage would force costs to skyrocket and immediately put an end to all development. When a wealthy developer complains that much about paying a fair wage, you have to wonder how little they’re actually paying their workers.

As an academic, I rely on data and evidence to form a judgment. The data show that labor costs for construction projects usually amount to about 23-24 percent of the total project cost. To keep the math simple, let’s say that a prevailing wage law results in a 10 percent raise for construction workers in a given region. At most, that would increase total cost by 2.5 percent. A 2.5 percent cost can be easily offset by the efficiencies gained from paying the highly-trained workers you attract with a prevailing wage. Trained, skilled workers mean higher productivity along with fewer accidents, errors and change orders.

(Read More)

(See PDF of Full Study)

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Maryland SB 300 – Prevailing Wage Rates, Public Works Contracts and Suits by Employers (MD)

Posted by National Alliance for Fair Contracting on

March 28, 2019

This bill authorizes an employee under a public work contract who is paid less than the appropriate prevailing wage to sue to recover the difference in wages paid without first filing a complaint with the Commissioner of Labor and Industry. A determination by the commissioner that a contractor is required to make restitution does not preclude the employee from a private cause of action. A contractor and subcontractor are jointly and severally liable for any violation of the subcontractor’s obligations associated with civil actions (brought either by the commissioner or the employee).

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(See PDF of Bill)

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Frostman column: Rewarding Wisconsin workers (WI)

Posted by National Alliance for Fair Contracting on

By Caleb Frostman on Apr 2, 2019

Being a relative newcomer to politics and government, I’m astonished at how often the word “agenda” is thrown around. Listening to soundbites and reading headlines, apparently, everybody has one and they’re something to be afraid of.

From a professional communication standpoint, I just hope everyone’s agenda is neatly formatted with bulletpoints and is less than a page.

Having sifted and winnowed through what’s true from what’s false when it comes to bluster and hot air, I’ve come to interpret “agenda” as meaning a collection of values or a set of proposals that reflect, or when put into action would manifest, those values.

The values reflected by Gov. Evers’ 2019-21 budget proposals include equal opportunity, strategic investment and ensuring that all participants in Wisconsin’s workforce and economy have a fair shot at sustained economic well-being.

One of the specific proposals that most clearly articulates the values of investing wisely and providing opportunity for economic well-being is the restoration of prevailing wage in Wisconsin.

Wisconsinites have clearly stated that when their tax dollars are being used in public projects, they want the wages paid and benefits provided on those projects to stay in their community. And they want the wage to be a fair, living wage and the benefits to be family-supporting, representative of what is typical for that work in that area.

Too often, after the repeal of prevailing wage, out-of-state contractors are able to win bids on public projects by under-cutting local businesses. They pay their workers a low wage and provide inadequate benefits, while likely maintaining their top-line profi

(Read More)