CONSTRUCTION FIRMS ORDERED TO PAY $2.4 MILLION IN BACK WAGES

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Two entwined Massachusetts companies deliberately misclassified hourly workers as independent contractors

December 06, 2016

The Labor Department said today that Anderson Dos Santos, owner and president of AB Construction Group and Juliano Fernandes, general manager at Force Corporation cheated 478 construction workers out of overtime wages and employment benefits.

The Labor Department said Force prepared and controlled the payroll and payment procedures for both companies. AB Construction was formed to supply Force with labor. The pair used a combination of payroll checks and cash and check payments to pay their employees straight time when overtime pay was required and kept inadequate and inaccurate time and payroll records, in violation of the Fair Labor Standards Act.

“To be cheated out of wages and denied other workplace protections by an employer who deliberately flouts the rules compounds the struggles too many middle-class Americans already face,” U.S. Labor Secretary Thomas E. Perez said in a statement. “Workers who play by the rules deserve nothing less than to be paid what they are owed.”

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Subcontractor on UH-Hilo project sanctioned, fined

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Hawaii Tribune Herald
Published November 1, 2016 – 12:05am

The state Department of Labor and Industrial Relations said Monday it has assessed Tradewind Plastering and Drywall Inc. a total of $143,000 for violating wage laws on the University of Hawaii at Hilo College of Hawaiian Language Building construction project.

According to a written statement, $130,367 is for wages owed to construction workers with $13,037 added for penalties. Tradewind Plastering and Drywall was a subcontractor of Jacobsen Construction Co. on the UH-Hilo project.

The most costly of the violations was underpaying construction workers by misclassifying them as apprentices, and paying lower apprentice wages, with no registered apprenticeship in evidence. This was in violation of Hawaii’s prevailing wage law covering public works construction.

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Employers Misclassifying Workers Face Joint Federal/State Investigations

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Brian J. Hoffman, The Legal Intelligencer
November 22, 2016

Employers have often played “fast and loose” with regulations governing workforce classification, tempted by the significant savings associated with independent contractor treatment. As such, in August 2016, Pennsylvania became the 35th state to reach an agreement with federal authorities to coordinate inquiries and share enforcement data in wage and hour investigations.

The Pennsylvania Department of Labor and Industry (PA DOL) and the United States Department of Labor (“US DOL”) inked a Memorandum of Understanding which serves to facilitate the exchange of information during enforcement actions. Historically, a particular focus of both the US DOL and PA DOL has been the misclassification of employees as independent contractors. Previously, an investigation by the PA DOL or US DOL of an employer would NOT necessarily lead to a reciprocal investigation by the other party. Now, given the execution of the Memorandum of Understanding, employers should expect that a wage and hour investigation by one department will likely lead to an investigation by the other. As such, employers challenged on employment classification practices while under audit will likely see overall liabilities increase during any given inquiry, as both federal and state taxes and penalties will be imposed.

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Wage Theft Hotline Hits Home With California Port Drivers

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BY JOHNNY MAGDALENO
OCTOBER 31, 2016

Reyes Castellano has been driving cargo in and out of the Long Beach, California, port for 15 years. The 58-year-old has always had to put a big chunk of his paycheck toward covering repair and maintenance costs for his vehicle, but ever since K&R Transportation, the company he works for as an independent contractor, asked drivers to switch out their diesel trucks for ones powered by clean diesel and natural gas, his expenses have gone through the roof.

“Since I’ve had that truck I’ve spent about $30,000 in repairs,” says Reyes, who’s listed as the owner-operator of his vehicle. Last year, he says he made $74,000, but after deducting all the expenses he put into his work, he brought home $24,000. “Filter gets warped, turbo goes out, repaired the transmission a couple of times – they get so hot in there, like there’s no insulation or nothing.”

But what gets him the most is that he’ll spend anywhere from eight to 10 hours some days just waiting for companies at the port to ready their shipments. That’s time on the job that he’s not getting paid for, and that’s why he and a few dozen other drivers decided to go on a two-day strike at ports in Long Beach and Los Angeles on October 25.

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Union: Drywallers working in Douglas County Courthouse were misclassified, denied appropriate compensation

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By Christopher Burbach | 

About 75 laborers and community advocates demonstrated outside the Douglas County Courthouse on Tuesday to demand enforcement of the Nebraska Employment Classification Act.

Their spokesman, union representative Steven Mulcahy, said drywallers on a courthouse renovation job had been misclassified as independent contractors instead of employees.

That meant that the workers were denied overtime pay, and that their employers didn’t pay workers’ compensation or payroll taxes for them, said Mulcahy, of the North Central States Regional Council of Carpenters.

“Our goal is to get some enforcement, because without that, it’s not going to stop,” Mulcahy said. Contractors on the $15 million courthouse renovation could not be reached for comment Tuesday.

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California Commissioner Awards $34.9M to Fight Workers’ Comp Fraud

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By: Andrew Polk
October 13, 2016

California Insurance Commissioner Dave Jones today announced he has awarded $34.9 million in grants to 37 district attorney offices representing 44 counties across California to combat workers’ compensation insurance fraud.

The grants, funded through employer assessments, support law enforcement efforts in investigating and prosecuting workers’ compensation insurance fraud.

Grant funding is based on assessments from California insured and self-insured employers, and district attorneys apply for workers’ comp fraud grant funds.

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Pennsylvania Labor & Industry Kicks Off Misclassified Workers Public Awareness Campaign

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Pennsylvania Department of Labor & Industry
Oct 19, 2016, 14:51 ET

HARRISBURG, Pa., Oct. 19, 2016 /PRNewswire-USNewswire/ — Pennsylvania Department of Labor & Industry Secretary Kathy Manderino today kicked off a statewide public awareness campaign about worker misclassification. The campaign was funded by a$473,000 grant from the U.S. Department of Labor.

“Worker misclassification is a nationwide problem that has a negative impact on Pennsylvania’s economy and unemployment compensation fund,” Sec. Manderino said. “It creates an uneven playing field for employers who properly classify their workers.”

Worker misclassification occurs when employers treat certain employees as independent contractors when they should not be classified as such. This may be done to reduce payroll and other costs.

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Steps for the St. Pete’s Wage Theft Protection Program

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BY DARDEN RICE, Vice Chair of St. Pete City Council
Posted on October 13, 2016 by TWC

ST. PETERSBURG – St. Petersburg’s Wage Theft Prevention Program has been underway for the past year. “Wage theft” is a broad term that includes any type of non-payment or underpayment by an employer. It can take the form of loss of overtime, illegal tip practices, being paid less than minimum wage and independent contractor misclassification.

According to a study conducted by Florida International University, Pinellas County has the fourth highest rate of wage theft in the state.

When unscrupulous businesses cheat their workers our economy suffers. Honest businesses are losing profits by being forced to compete against unethical businesses that have an unfair advantage. Workers are struggling to pay their bills and cannot afford to put money back into the local economy. All taxpayers suffer when employers refuse to pay their fair share into Social Security and workers’ compensation insurance by misclassifying their employees as independent contractors. The St. Petersburg Wage Theft Prevention Program sees these impacts first-hand on a daily basis.

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Column: Senate legislation to end wage theft epidemic

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By STAN ROSENBERG and SAL DIDOMENICO
Wednesday, October 19, 2016

The Massachusetts economy is working very, very well for some people, but not nearly well enough for others. That’s why we have one of the highest rates of income inequality in the country.

Building an economy that works for everyone is one of the top priorities of the Massachusetts Senate. We are fortunate to have thriving industries in Massachusetts, like solar energy, cyber security and pharmaceuticals. We have companies that make headlines around the world for the pioneering work they do. They pay their workers well, and they make a substantial contribution to our economy.

Less well known is a persistent underground economy, with companies that never make headlines and use that to their advantage to exploit some of our most vulnerable workers. Those companies don’t pay their workers good wages, and sometimes they even refuse to pay them for the work they do. That’s wage theft, and it’s against the law.

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Justice for Irvine employees: Owner gets jail for shorting pay

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POSTED BY KEN STONE
OCTOBER 7, 2016

The owner of an Irvine-based heating and air conditioning company was sentenced Friday to a year in jail and five years of formal probation for failing to pay employees a prevailing wage on public works projects and pocketing the difference.

Shamseddin Hashemi-Mousavi, who was convicted exactly a year ago Friday, could have faced up to 26 years and eight months in prison.

Orange County Superior Court Judge Steven Bromberg prohibited him from working on any public works contracts through the end of his probation, according to Deputy District Attorney Donde McCament.

Hashemi-Mousavi placed $58,000 in a trust fund to be used to pay for restitution at a later date, McCament said. Bromberg will hold a hearing later to determine what restitution the defendant owes.

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