Contractor Hired by San Diego Firm to Pay $1.1M for Wage Theft (CA)

Posted by National Alliance for Fair Contracting on July 13, 2018

POSTED BY ALEXANDER NGUYEN
ON JULY 9, 2018 IN BUSINESS

State labor regulators secured more than $1.1 million in wages and penalties from the settlement of a case involving a Long Beach construction project, it was announced Monday

Labor officials alleged that Newport Beach-based Champion Construction Inc., a drywall and framing contractor hired by San Diego general contractor TB Penick for the Browning High School construction project, maintained false payroll records over a six-month period to cover up wage theft affecting 103 workers who were not paid wage and fringe benefits.

California’s wage laws hold general contractor TB Penick jointly liable for the violations of its subcontractor Champion, state Labor Commissioner Julie Su said.

“Prevailing wages create a level playing field for all contractors bidding on public construction projects,” Su said. “This case clearly demonstrates that general contractors who select contractors that don’t play by the rules will pay a heavy price. Under the law, they are responsible for the wage theft of their subcontractors.”

The Labor Commissioner’s Office opened its investigation after receiving a report from the Carpenters Contractors Cooperation Committee in March 2016 alleging public works violations. The investigation included interviews with more than 30 workers, site visits and an audit of pay records for the dozens of workers involved in the project, Su said.

(Read More)

Senate unanimously OKs wage theft bill (MA)

Posted by National Alliance for Fair Contracting on July 13, 2018

UPDATED: 06/22/2018 06:35:35 AM EDT

By Katie Lannan
State House News Service

BOSTON — The Massachusetts Senate voted unanimously Thursday to approve legislation offering new protections to combat what senators characterized as a $700 million problem.

The bill (S 2327) targets the practice of wage theft, through which workers are denied the compensation owed to them by employers.

Despite the Senate’s support for the bill, Minority Leader Bruce Tarr warned it contained a “poison pill” that would make it “legally indefensible” and could keep it from becoming law.

Types of wage theft include failure to pay overtime, minimum wage violations, illegal deductions and working off-the clock, said Sen. Jason Lewis, who co-chairs the Labor and Workforce Development Committee.

“The practice of wage theft comes in many different forms, but they all have the common denominator of hurting workers, their families, and our communities,” said Sen. Sal DiDomenico, the bill’s lead sponsor.

Lewis told of one man, the father of an infant, who worked more than 50 hours a week for a construction subcontractor and was not receiving a paycheck. When the man approached his employer about the lack of pay, he was fired.

According to DiDomenico’s office, 350,000 Massachusetts workers lose an estimated $700 million annually to wage theft.

(Read More)

Orange County DA to crack down on contractors breaking wage laws (CA)

Posted by National Alliance for Fair Contracting on July 13, 2018

By Heather Yakin
Times Herald-Record
Posted Jun 25, 2018 at 11:02 AM

GOSHEN – Lowball wages. Skimping on benefits. Fudging workers’ job titles. Paying off the books.

These are a few of the strategies unscrupulous contractors use to skirt New York’s prevailing wage laws on public projects. Orange County District Attorney David Hoovler says his office will crack down on the illegal practices this summer. Investigators will visit public-works job sites throughout the county to make sure contractors are complying with prevailing wage requirements.

“Prevailing wage laws are designed to protect workers from unscrupulous public-works contractors, so that those workers are paid a decent wage and provided with decent benefits,” Hoovler said. “Dishonest contractors, however, in an effort to make that extra buck, often illegally undercut the required prevailing wages and benefits, to the detriment of the honest workers that they have hired.”

In May, the Orange County District Attorney’s Office joined government agencies in the lower Hudson Valley, New York City and Long Island in the regional Wage Theft Task Force. The task force aims to ferret out and stop employment crimes including violations of the prevailing wage laws that govern public contracts.

New York law sets minimum wages and minimum fringe benefits that contractors must pay and provide to workers on county, municipal and other public-agency construction. Those minimum standards are meant to be comparable to the wages and benefits generally paid to construction industry workers.

A contractor’s failure provide prevailing wage violates state Labor Law, and is punishable by criminal sanctions including fines, imprisonment, and a contractor being barred from bidding or working on public-works projects.

(See Article)

Prosecutors Treating ‘Wage Theft’ as a Crime in These States

Posted by National Alliance for Fair Contracting on July 13, 2018

June 26, 2018
By Chris Opfer

When a business doesn’t pay workers minimum wages or overtime, it usually risks a government investigation or private lawsuit. In some states, companies and their officers may also be looking at criminal charges that could land them behind bars.

“We prosecute companies that have institutionalized theft as a business model,” Manhattan Assistant District Attorney Diana Florence said.

Prosecutors in New York and California are starting to view wage violations as an actual crime more often, as opposed to a matter for civil courts. Their approach could be a model for other states looking to beef up enforcement in an era when the federal wage-and-hour watchdog is shifting its emphasis to voluntary compliance.

Also changing the landscape are a recent U.S. Supreme Court decision that’s likely to increase private arbitration and an immigration crackdown that may make some workers less likely to come forward with complaints.

“Companies take criminal cases more seriously,” Rena Steinzor, a University of Maryland professor who wrote a book about corporate criminal prosecutions, told Bloomberg Law. “If you’re an executive and the cops come to your door, you don’t soon forget it.”

Prosecutors are focusing on particular industries-such as construction, restaurants, janitorial services, garment makers, and home care providers-where they say low wages, temporary job assignments, and businesses that pop up and shut down with little notice leave workers especially vulnerable to abuse. Prosecutors are also packaging “wage theft” investigations as part of a wider look that encompasses health and safety violations, payroll tax fraud, and human trafficking.

Defense lawyers say the threat of criminal prosecution for what has largely been handled in civil courts may give prosecutors too much leverage.

“They can come in with these outrageous demands knowing that there’s no basis in reality,” Allan Bahn, a partner at FordHarrison in New York, told Bloomberg Law. “At times, they can hold” criminal charges “over a contractor and say, ‘If you don’t settle, we’re going to refer you for prosecution.'”

(Read More)

General Assembly approves increasing penalties for bad contractors (RI)

Posted by National Alliance for Fair Contracting on July 13, 2018

POSTED BY: SANDY MCGEE JUNE 21, 2018

PORTSMOUTH, R.I. – In a major win for consumers, the General Assembly recently passed legislation (2018-H 7443, 2018-S 2607) that distinguishes penalties for licensed contractors, who fail to comply with Contractors’ Registration and License Board (CRLB) orders.

The new legislation imposes penalties for contractors operating without proper licenses or registration.

The legislation was introduced by Rep. Dennis M. Canario (D-Dist. 71, Portsmouth, Little Compton, Tiverton) and Sen. Paul W. Fogarty (D-Dist. 23, Glocester, Burrillville, North Smithfield) at the request of Attorney General Peter F. Kilmartin.

“Negligent and bad contractors not only waste consumers’ money, but there are also significant safety concerns that can arise with inferior or substandard contractor work. This bill will protect consumers’ wallets and health while also holding bad contractors responsible for their actions,” said Representative Canario.

“The public must have a real means to defend against fraudulent or shabby contractors. Today we are putting some teeth in the law to ensure that people get the restitution they deserve and to send a clear message to those who would fleece the public that they will be held accountable,” said Senator Fogarty.

“The number one consumer complaint filed with our office is against contractors who do shoddy work, or worse, fail to do the work at all,” said Attorney General Kilmartin. “Until now, our hands – and the hands of the CRLB – were tied because there was no legal avenue to hold these bad contractors accountable once the criminal sentence expired. This act gives our Office and the CRLB much-needed tools to protect homeowners and ensure that all contractors are playing by the rules. This is a great win for consumers.”

The legislation amends RIGL Section 5-65-19 (“penalty for operating without a registration – failure to comply with a final order of the board – repeat offense a felony”) to provide that any person who violates a final order of the CRLB where the monetary total of the order including, but not limited to, the monetary judgment and/or fines, is not more than $5,000, upon proper written notification, is deemed guilty of a misdemeanor, and, upon conviction, shall be imprisoned for a term not exceeding one year, fined not more than $1,000, or both.

Where the monetary total of the order is $5,000 or more, upon written notification, is deemed guilty of a felony, and, upon conviction, shall be imprisoned for a term not exceeding 10 years, fined not more than $10,000, or both. The imprisonment time for those persons found to be a repeat offender would be increased from up to 5 years to up to ten years.

(Read More)

So-called ‘right to work’ is an attack on workers (AK)

Posted by National Alliance for Fair Contracting on July 13, 2018

Posted June 26, 2018 06:10 am
By Dave Reaves

Have you ever had a bad day at work? It happens to all of us once in a while. Back in the days before organized labor and higher work standards people suffered at their jobs because of unsafe conditions, long hours, no training and poor benefits. Workers got hurt and were literally thrown out into the gutters, lost jobs with no notice, and had no pensions after years of toiling away.

As a nation, we’ve come a long way since the 1800s, but the effort to preserve workers’ rights is constant. Decent jobs with fair wages and benefits provide stability to our communities over the long haul. I am talking about our spouses, children, relatives and friends, people who contribute to the local economy every day.

Occasionally I hear people say, “unions were important years ago, but we just don’t need them anymore.” I couldn’t disagree more. Decades ago, when unions were at their peak, many more Americans had good pensions, good employer health care, job security and living wages. Unions have been at the forefront of every economic justice issue in America for the last 100 years: Medicare, Social Security, workers’ compensation laws, minimum wage and overtime laws, worker safety laws, and much more.

Unions have been the strongest – and often the only – counterbalance to the extraordinary attacks we’ve seen on the middle class. But after decades of unrelenting attacks on unions by the rich and powerful, those things we used to consider fundamental to the American dream are increasingly rare. These attacks on unions have unfortunately been quite successful, and the results have been all too predictable: a massive transfer of money from the middle class and poor to the top 1 percent. Think about this staggering fact: the Walton family, which owns Wal-Mart, controls a fortune equal to the wealth of the bottom 42 percent of Americans combined.

…

Dave Reaves is the business manager for Local 1547. IBEW Local 1547 represents more than 4,000 workers in the state of Alaska.

(Read More)

State Attorneys General can play key roles in protecting workers’ rights

Posted by National Alliance for Fair Contracting on July 13, 2018

Report * By Terri Gerstein and Marni von Wilpert * May 7, 2018

Summary

State attorneys general can be key allies in protecting workers’ rights. While there are variations in the structure, resources, and jurisdiction of state attorney general offices, these offices often have a range of powers that can enable them to play a key role in advancing and defending workplace protections by ensuring that employers comply with the law. This report describes some of the ways state attorneys general have been involved in protecting workers’ rights.

Introduction: Broader state enforcement is needed to enforce workers’ rights laws

Working people in America are being shortchanged: They are working harder, but inequality is rising and wages for all but the highest-paid workers are failing to keep up with economywide productivity growth (Gould 2018). Even worse, many workers are not being paid what they are owed by their employers. The failure to enforce workers’ rights laws has resulted in billions of dollars in wages being stolen from workers’ paychecks (Levine 2018; McNicholas, Mokhiber, and Chaikof 2017). For example, in the 10 most populous states in the country, each year 2.4 million workers covered by state or federal minimum wage laws report being paid less than the applicable minimum wage in their state-approximately 17 percent of the eligible low-wage workforce.

The Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL)-the federal agency responsible for enforcing minimum wage and overtime laws-has been stretched increasingly thin. The number of payroll jobs in the U.S. is more than three times as large as it was in the 1940s-146.6 million in 2017 compared with 45.0 million in 1948-but the number of wage and hour investigators at WHD has remained essentially the same (BLS various years). In 1948, WHD employed one investigator for every 22,600 covered workers; today, WHD has only one per every 135,000 workers (Cooper and Kroeger 2017). As a result, the agency’s ability to effectively police violations of labor law has suffered: from 1980 to 2015, the number of wage and hour violation cases WHD investigated decreased by 63 percent (Cooper and Kroeger 2017).

Moreover, the decline in union rates has put more workers at risk of labor law violations. Workers not covered by unions-those who are neither in a union nor covered by a union contract-are almost twice as likely (4.4 percent) to experience minimum wage violations as those in a union or covered by a union contract (2.3 percent) (Cooper and Kroeger 2017). And unions continue to be under attack: Trump’s budget blueprint calls for funding cuts to the National Labor Relations Board (NLRB), the federal agency charged with upholding private-sector workers’ rights to organize and join unions (Opfer 2018).

These staffing shortages and funding cuts show that the Trump administration is not making enforcement of our nation’s labor laws a priority. To protect workers’ rights to fair pay and fair treatment on the job, funding and resources for federal labor and employment law enforcement agencies need to increase dramatically. In addition, state governments can and should take up the fight to protect workers’ basic rights on the job. State labor departments are usually the primary enforcer of state labor laws, but there are other governmental entities that can and do engage in worker protection activities, including state attorney general offices.

This report explores the ability of state attorneys general to take up enforcement of our labor laws and protection of workers’ rights. By examining enforcement actions among a number of states, this report highlights the various ways state attorneys general exercise jurisdiction to protect workers and enforce labor laws.

(Read More)

(PDF Copy of Full Report)

Grand Theft Paycheck: The Large Corporations Shortchanging Their Workers’ Wages

Posted by National Alliance for Fair Contracting on July 13, 2018

by Philip Mattera with a chapter on policy recommendations by Adam Shah
June 2018

New research finds that a wide range of big corporations have been shortchanging the people who work for them Washington, DC-A new report finds that many large corporations operating in the United States have boosted their profits by forcing employees to work off the clock, cheating them out of required overtime pay and engaging in similar practices that together are known as wage theft.

The detailed analysis of federal and state court records shows that these corporations have paid out billions of dollars to resolve wage theft lawsuits brought by workers. Walmart, which has long been associated with such practices, has paid the most, but the list of the most-penalized employers also includes Bank of America, Wells Fargo and other large banks and insurance companies as well as major technology and healthcare corporations. Many of the large corporations are repeat offenders, and 450 firms have each paid out $1 million or more in settlements and/or judgments.

These are among the findings in Grand Theft Paycheck: The Large Corporations Shortchanging Their Workers’ Wages published today by the Corporate Research Project of Good Jobs First and Jobs With Justice Education Fund. It is available at www.goodjobsfirst.org/wagetheft

“Our findings make it clear that wage theft goes far beyond sweatshops, fast-food outlets and retailers. It is built into the business model of a substantial portion of Corporate America,” said Good Jobs First Research Director Philip Mattera, the lead author of the report.

(Read More – Press Release)

(PDF Copy of Full Report)

(Read More)

High-Road Development: Building Prosperity for Workers and the District

Posted by National Alliance for Fair Contracting on July 12, 2018

By Brittany Alston * July 2, 2018
Economic Development / Jobs & Training

Executive Summary
Over the past twenty years, the District has seen dramatic economic and population growth, including a development boom that has transformed the city’s skyline, remade neighborhoods, and changed the city’s employment landscape. These changes have led to prosperity for some, but that prosperity has not been shared with DC’s low-wage workers. District leaders should seize on DC’s growth as an opportunity to encourage “high-road development,” pairing development with high-quality jobs in ways that will support workers, residents, and high-quality development projects.

By taking a high-road economic development approach-in which developers partner with unions, invest in workers, and provide quality employment opportunities to residents-the District can ensure that the city’s ongoing growth provides benefits to DC residents and workers. Unfortunately, District leaders have missed many opportunities to practice high-road development. In projects such as the Wharf and Union Market, the city has sweetened development deals with large subsidy packages, without setting job quality standards for District workers – subsidizing low-wage, low-quality employment that makes it hard for workers to make ends meet in a city where the cost of living keeps going up.

High-road development is associated with higher wages and benefits, reduced incidents of wage theft, and boosts to the local economy when workers spend their additional earnings. High-road development also helps ensure that projects are completed in a timely way and with high quality.

Looking to other jurisdictions that have taken a high-road approach can equip the District with tools to adopt high-road development. By enforcing existing labor laws, attaching job creation and quality standards to all economic development policies, and penalizing subsidy recipients if they fail to meet job quality requirements, policymakers can ensure that the District is taking the high road when it comes to economic development.

…

A “High-Road” Approach Could Make DC Development Work for Workers and Residents

High-road economic development seeks to create an environment where both public and private entities value a diverse and skilled workforce, seeing the workforce as a profitable asset that must be sustained and invested in over time. High-road economic development ensures that public dollars result in public benefits and economic growth-this includes a high quality of life for residents and effective and transparent governance.

…

During the decision-making process, developers can factor these benefits into a robust impact analysis to see the benefits of hiring union workers and paying living wages. For example, The AFL-CIO Building Investment Trust, a bank collective trust and trustee of PNC bank, invests in commercial real estate using union pension funds and relies solely on organized labor when building. Their investments created a portfolio with approximately $5 billion in net assets and 78 million hours in union construction work and created thousands of unionized operation jobs, with properties in the District and nationwide. For the AFL- CIO Building Investment Trust, high-road development remains a profitable financial proposition, as they continue to invest in union projects.

…

UNIONIZATION IS A CRUCIAL COMPONENT TO HIGH-ROAD DEVELOPMENT

An essential component of high-road development is collaboration with labor unions. Many high-road developments start with project labor agreements-agreements between the building trades and project developers that govern the conditions of employment for the project and create project management efficiencies-during the project’s construction phase. Once the construction is complete, employees of the businesses located at the development site may want union representation as well.

(Read More)

The cost of construction and the state’s prevailing wage (NY)

Posted by National Alliance for Fair Contracting on July 12, 2018

By JEFF COLTIN
JUNE 4, 2018

Anybody who has seen Gov. Andrew Cuomo give a speech in the past few years knows that New York is in the midst of a building boom.

There are marquee projects like the Gov. Mario M. Cuomo Bridge over the Hudson River or the renovation of LaGuardia Airport in Queens, and there are smaller projects like street enhancements in downtown Watkins Glen or a proposed Metro-North station at Woodbury Common Premium Outlets.

These projects are mostly publicly financed and built by private contractors – and in the midst of this building boom, some state legislators are hoping to clarify what those contractors should be paid.

The state constitution says that construction workers on state-financed projects should be paid the prevailing wage – a set rate of pay and benefits. Prevailing wage rates are maintained by the state Labor Department and vary by location and job. For example, a structural ironworker in Albany County would make $30.50 an hour plus some $27 an hour in supplemental benefits on a public project, while one in New York City would make nearly $52 an hour, plus more than $70 an hour in supplemental benefits. It’s meant to prevent contractors from undercutting wages, and to ensure workers on public projects are getting paid fairly.

A bill is being considered that would expand the number of construction projects subject to the state’s prevailing wage rates. In practice, the bill is meant to clarify the definition of “public work,” legislating that even largely private projects that receive tax breaks or other government subsidies are still required to pay a prevailing wage to workers. The bill’s sponsors say that judicial rulings have caused loopholes that allow contractors to not pay full wages.

Advocates for workers say the state is paying for poor working conditions. “Too often in construction, we see a race to the bottom where unscrupulous contractors are receiving taxpayer dollars to subsidize development with little to no standards in place for the workers on these projects,” said Patrick Purcell, executive director of the Greater New York Laborers-Employers Cooperation and Education Trust, in a press release supporting the legislation.

Fred B. Kotler, J.D., Cornell University ILR School (March 2018)

Author: National Alliance for Fair Contracting