Pittsburgh creates construction fraud task force (PA)

Posted by National Alliance for Fair Contracting on

By Kim Slowey
Jan. 3, 2019

Dive Brief:

  • This Pittsburgh City Council voted last week to establish the Joint Task Force on Construction Industry Fraud, which will work to identify and combat “unfair trade practices, including tax fraud” among the city’s construction businesses.
  • The resolution takes particular aim at construction companies that commit wage violations that result in underpayment or nonpayment of taxes, as well as too-low pay rates that prevent some workers from being able to support their families. The task force will not focus on the practice of hiring undocumented workers, however.
  • The group will be made up of representatives from the city council; mayor’s office; Pittsburgh Regional Building and Construction Trades Council; Allegheny County District Attorney’s Office; Pennsylvania Department of Labor and Industry; and the city’s Department of Permits, Licenses and Inspections.

Dive Insight:

According to the resolution, construction is the fastest-growing industry in Pittsburgh. It states that fraud-related violations of city ordinances not only threaten the health and safety of residents and workers but “threaten the viability” of businesses that operate legitimately. The group will review existing industry practices in Pittsburgh and then make code and policy recommendations to the council and mayor.

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RESULTS OF THE REPEAL – DID IT WORK? (IN)

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Nick Dmitrovich
October 12, 2018

A few weeks ago, Indiana passed the third anniversary mark since state legislators repealed the common construction wage law. Back in July of 2015, when the repeal went into effect, the intent was to provide financial relief for taxpayer-funded projects by reducing costs associated with construction wages.

At the time, former Governor Mike Pence, a major supporter of the repeal, said that “wages on public projects should be set by the marketplace and not by government bureaucracy.” During the campaign to get the repeal passed, supporters said the bill would help “cash-strapped” schools and other institutions keep project costs down.

So, now that a few years have gone by and data has had the chance to be developed, the big question is: Did it work? Did the repeal save public institutions the money it was supposed to?

Earlier this year, a report from the Midwest Economic Policy Institute (MEPI) straightforwardly titled “Effects of Repealing Common Construction Wage in Indiana” detailed the types of changes the repeal brought about across ten different construction market attributes. MEPI specializes in infrastructure investment and construction industry research.

To put it plainly, their report was a brutal look at the decision’s shortcomings and the damage its done to the construction industry.

“Repeal of common construction wage has led to a host of negative impacts on workers and the construction industry – including lower wages and more income inequality – while failing to deliver any meaningful cost savings or increased bid competition promised by those in favor of repeal,” researchers wrote.

Let’s take a look at the ten construction outcomes that researchers studied and how they have been impacted.

Construction Wages

Right off the bat, it’s fairly plain to see the people most impacted by the repeal are Indiana construction workers themselves, and vicariously their families. Just how much? A straight-up loss of 8.5 percent, even accounting for all the various factors that affect a person’s hourly wage (such as age, race, union membership, and other factors).
This wasn’t just a fact reflected in this report alone, it was actually predicted in additional research reports published at various times before and after the repeal went into effect (MEPI, Manzo, Bruno, Littlehale, et. al)

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EDITORIAL: WAGE THEFT SHOULD BE AT THE TOP OF LEGISLATURE’S AGENDA

Posted by National Alliance for Fair Contracting on

October 2, 2018

If you put in an honest day’s work, you should get an honest day’s pay. It’s that simple. The problem is, it’s not happening. Wage theft is occurring across the Commonwealth and dishonest employers are getting away with it, because Beacon Hill has continuously sided with business interests over hard-working families.

The numbers are shocking. About $700 million is stolen from workers every year, the majority of whom are low-income people of color. Only a fraction of those wages, less than 1 percent, is recovered by state authorities.

Often, wage theft happens when bad employers use subcontracting and outsourcing to dodge their basic responsibilities. These crimes are so pervasive, they’re overwhelming the capacity of our existing labor laws and enforcement mechanisms. They’re also a drain on our economy that siphons much-needed revenue, funds that could go toward improving roads, schools, transit, and other public infrastructure.

Cities and towns across the Commonwealth understand what’s at stake, and they’ve shown real leadership standing up for the public good and confronting these criminals head on.

Boston Mayor Marty Walsh led the charge in 2014, when he issued a powerful executive order protecting vulnerable workers from wage theft. At the time of the historic announcement, he said: “It’s illegal to deny fairly earned wages. This executive order empowers workers to demand what they have worked for. I’m committed to stopping violations and holding employers to the letter of the law.”

Since then, more municipalities, including Chelsea and Lynn, have also passed important anti-wage theft measures. And just this month, the Springfield City Council passed the strongest legislation yet. It ensures that businesses are in full compliance with wage and hour laws, including prevailing wage, before they receive any tax incentives from the city.

It’s a groundbreaking measure, and further proof that cities and towns are showing the way forward, but we still need a statewide solution that protects families from Norwood to New Bedford from this unlawful crime wave.

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Providing A ‘Level Playing Field’ For Workers, Public Bodies, Business Owners & Taxpayers To Ensure ‘All’ Benefit

Posted by National Alliance for Fair Contracting on

Published Wednesday, October 31, 2018
by WNYLaborToday.com Editor-Publisher Tom Campbell

(HAMBURG, NEW YORK) – Fear – in a word, according to representatives of the non-profit New York Foundation For Fair Contracting, is holding back many Non-Union Construction Workers from reporting wage theft or unsafe working conditions.
That’s because they don’t know where to go for help when it comes to being cheated out of their wages and their fringe benefits.

And just how would they ever make the right authorities aware of what’s happened to them without facing repercussions from their employer or being fired from their jobs?

And it’s not just Construction Workers. Its contractors looking for a fair shot at obtaining public construction work, while at the same time battling unscrupulous contractors that receive low responsible bidder status on a project.

And its public bodies that want to award contracts to responsible contractors who qualify as the low bidder.

After all, in the end, it’s the taxpayer who foots the bill when it’s found a debarred contractor that’s been restricted from bidding for public works jobs does indeed get the job.

But here in New York State, there’s an entity that’s currently working to level the playing field by supporting fair contracting across the State – the New York Foundation For Fair Contracting, a non-profit Labor-Management Organization that monitors Prevailing Wage public project work and the competitive bidding process in Western, Central and Northern New York, including those that fall under New York State Labor Law § 220 (covering public work) and Federally-funded Davis-Bacon (Prevailing Wage) work.

Under the State Freedom of Information Law and the Federal Freedom of Information Act (FOIA), the NYFFC – which is not a private investigative service – reviews bid documents, contracts and certified payroll records to ensure contracting companies are following the laws and regulations that govern the industry.

The NYFFC’s compliance and monitoring work is done for the benefit of public bodies, as well as the taxpaying public. And its investigations serve to curb the corrupt act of underbidding and disenfranchising, not only for the individual Workers on a project, but also for taxpayers who expect a timely, safe and high quality end result.

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Wage Gaps and Outcomes in Apprenticeship Programs

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The Effects of Gender, Race, and Region

By Daniella Zessoules and Olugbenga Ajilore
Posted on December 12, 2018, 12:01 am

Policymakers frequently approach the question of developing the workforce to meet the needs of the 21st century. Despite today’s historically low unemployment rates, wages for typical workers have barely budged for decades. While productivity has increased, gains have largely trickled to the richest Americans, exasperating persisting income inequality and painting an ominous picture of middle-class living standards. Furthermore, gaps in both wealth and income by race and gender have caused disproportionate labor market penalties for certain groups. Wage gaps and growing income inequality along racial lines have persisted despite higher educational attainment. For example, earning a bachelor’s degree or higher has not proven to reduce either the black-white or the Latinx-white wage gap. Meanwhile, employers are spending less on worker training than they used to. And too often, the training that they do provide is firm-specific, meaning that those skills do not translate well to other firms.

Registered Apprenticeship programs, which have bipartisan support, aim to address this issue by connecting Americans to decent-paying jobs as electricians, carpenters, and dental assistants, among others. The program, which the U.S. Department of Labor (DOL) administers through the Workforce Innovation and Opportunity Act, aims to help businesses develop highly skilled employees through hands-on customized training for a variety of occupations. The DOL asserts that the average hourly wage for a journeyperson who completes an apprenticeship is $23.94, equivalent to an annual salary of $49,795.

Investments in the workforce of tomorrow are necessary both to ensure pathways to relevant economic opportunities as well as to bridge economic disparities along racial and gender lines-including racial wealth and pay gaps-that continue to plague families across the country. Unfortunately, data on Registered Apprenticeship programs identify prominent economic disparities among women and people of color-many of whom face low enrollment rates within such programs and are concentrated in lower-paying occupations.

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Changes To State Highway Funding Rules Passed During Lame-Duck Session

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Transportation Experts Say Measure Aims To Allow DOT To Avoid Federal Wage Requirements On Some Highway Projects

Thursday, December 6, 2018, 5:25am
By Rich Kremer

Legislation passed during the Legislature’s lame-duck session could change how Wisconsin pays for major highway projects. Transportation insiders say the tweaks are meant, by lawmakers, to be a way for the state to avoid federal wage requirements.

The first bill approved by lawmakers during this week’s extraordinary session makes changes to how the Wisconsin Department of Transportation funds highway megaprojects, like those in southeastern Wisconsin and other major state highway projects throughout the state, by requiring at least 70 percent of the project be funded with federal dollars.

Under current law, the DOT uses a combination of federal and state dollars, but for megaprojects and other major highway improvements there isn’t a set minimum for federal funds.

Former DOT Secretary Mark Gottlieb said that change is significant because federal funds carry with them federal requirements that contractors be paid wages set by the U.S. Department of Labor.

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Worcester to guard against wage theft in future tax deals for private development

Posted by National Alliance for Fair Contracting on

By Nick Kotsopoulos
Telegram & Gazette Staff
Updated Dec 9, 2018 at 8:05 PM

WORCESTER – The city will include provisions against wage theft in future tax increment financing agreements for private development projects, City Manager Edward M. Augustus Jr. has informed the City Council.

The action is in response to a call by several councilors to strengthen the city’s current wage theft ordinance, where appropriate, to include stipulations for building permits.

While it has been determined that the city cannot legally impose such conditions on building permits, it can put them in tax deals for private projects.

“The goal is to secure compliance and eliminate the use of wage theft tactics by entities doing business with the city,” Mr. Augustus wrote in a report that goes before the City Council Tuesday night.

In 2016, the City Council approved a wage-theft ordinance that prohibits the city from awarding contracts to companies that have been found guilty of not complying with federal and state wage laws, including failing to pay their employees, and failing to pay prevailing wage, minimum wage and overtime.

Other types of wage theft include denial of legal benefits such as industrial accident and health insurance, improper classification of employees and violations involving payment of taxes, unemployment compensation, Social Security and income tax withholding.

Under the Worcester ordinance, successful bidders for city contracts have to provide a certification of compliance regarding payment of wages to employees.

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Labor Joins Gonzalez Fletcher to Introduce New Bill to Protect Workers from Misclassification

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By Nick Kotsopoulos
Telegram & Gazette Staff
Updated Dec 9, 2018 at 8:05 PM

Imagine working side-by-side with others who have all the benefits of being an employee of a company including paid sick days, a minimum wage, workers’ comp, unemployment insurance and more. Now imagine you are doing similar work without any of those protections because your boss decided to call you an “independent contractor” instead of an employee simply because he wants to cut corners on costs.

It’s called misclassification, and it’s a growing and devastating problem for workers, businesses that do the right thing and our economy as a whole.

The California labor movement joined Assembly member Lorena Gonzalez Fletcher today to tackle this problem head on, codifying into state law a recent California Supreme Court decision that provides a simple test employers must meet to classify workers as independent contractors. The test, a version of which exists in other states, removes uncertainty and ensures workers who are doing the job of an employee have all the protections and rights that should be afforded to them.

Alexei Koseff details the new effort to protect workers in today’s Sacramento Bee:

The bill would strengthen rules that make it harder for employers to classify workers as contractors and limit their rights under state labor laws.

“Individuals are not able to make it on three side hustles. That shouldn’t be the norm. That shouldn’t be accepted,” Gonzalez Fletcher said. She said the court’s decision is essential for maintaining solid employment for workers in a changing economy and for combating the income inequality that has helped drive California’s poverty rate to one of the highest in the nation.

“What we permit, what we don’t permit, what has worked for generations and built the middle class of California, needs to be largely intact,” she said.

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Former Obama labor official details how to stop misclassification

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Smith, speaking at forum in Newark, said interagency, coordinated enforcement and data sharing are two keys

By Alex Wolmart
Newark | Dec 6, 2018 at 1:56 pm

While many brought their worries and hardships, Patricia Smith brought solutions.

Smith – senior counsel at the Manhattan-based nonprofit the National Employment Law Project – broke down the issue of employee misclassification at an event sponsored by the New Jersey Department of Labor and Workforce Development on Wednesday in Newark.

Misclassification is misclassifying workers as independent contractors by filing 1099s rather than W2s. Employers who misclassify avoid having to pay unemployment and disability taxes.

Misclassification, by itself, is not illegal,” she said. “What’s illegal is the consequences of misclassification. When you find misclassification, you’re going to have, depending upon what you’re enforcing, a remedy.”

Smith, a former labor official in President Barack Obama’s administration, has been involved with misclassification for more than 20 years. She said interagency, coordinated enforcement; data sharing; a robust public and press outreach strategy; agency cross-training and joint employment; criminal referrals in appropriate cases; and required reports to either the Legislature or governor on a frequent basis are how the misclassification of employees as independent contractors will be remedied.

Labor Commissioner Robert Asaro-Angelo led the forum. He told the room of a few dozen workers, union reps and lawyers that Gov. Phil Murphy gets it.

“We’re at a time in our state where our governor and this administration wants to stand up for the right to protections, for the women and men who work hard and deserve the opportunities and benefits that they are entitled to,” he said.

And while many public advocates came to give their testimony, it was Smith who had the most to say.

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California passes AB 2358 aiming at discrimination & harassment in Building & Construction Trade Apprenticeships

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By Andrea Matsuoka | October 24, 2018

California Governor Jerry Brown recently signed AB 2358, a bill that seeks to address potential discrimination and harassment in building and construction trade apprenticeship programs. While AB 2358 contains broad anti-discrimination language, it was designed to encourage women in particular to pursue building and construction careers, beginning with apprenticeships.

AB 2358 expressly prohibits discrimination in building and construction trade apprenticeship programs on the basis of enumerated categories including sex, gender, race, national origin, religious creed, and disability. AB 2358 also requires these apprenticeship programs to affirmatively promote equal opportunity in several ways:

  • Programs must include an equal opportunity pledge in their apprenticeship standards, publications and bulletin boards; incorporate equal opportunity policies into orientations and information sessions; and provide equal opportunity notices to contractors annually.
  • Programs also must provide interactive anti-harassment and anti-discrimination training to all apprentices, instructors, and employees and implement procedures for handling and resolving complaints of harassment or discrimination.
  • Programs must designate one or more individuals to monitor all apprenticeship activity for equal opportunity compliance and to maintain compliance records, in order to promote coordination and accountability.

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