Investigation Recovers $246k In Back Wages for 306 Painters, Drywall Workers Denied Overtime by Misclassification as Independent Contractors

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: August 4, 2022
Release Number: 22-1562-DAL

​​​​​​​Department of Labor finds errant pay practices hurt workers jointly employed

NEW ORLEANS – The U.S. Department of Labor has found that the wages of hundreds of painters and drywall workers employed by a Louisiana contractor on construction projects, including work at New Orleans’ Superdome, were tackled for a loss when their employer misclassified the workers as independent contractors, a common industry violation.

Investigators with the department’s Wage and Hour Division found that PL Construction Services misclassified its workers as independent contractors. Many of the employees worked on projects involving Lanehart Commercial Painting – operating as Lanehart – including work at the Superdome. PL Construction Service paid the misclassified workers straight-time rates for all hours, including those over 40 in a workweek which violated the Fair Labor Standards Act’s overtime regulations. They also failed to maintain complete and accurate records of hours their employees worked, another FLSA violation.

The division determined that during the investigation period, a joint employment relationship existed between PL Construction Services and Lanehart for workers employed on Lanehart projects. Among other factors, they found the following conditions:

PL Construction Services employees worked almost exclusively for Lanehart.
At work sites, Lanehart supervised PL Construction Services’ workers, determined the number of workers needed and when, and kept records of hours PL Construction Services’ employees worked.
PL workers’ labor was essential to Lanehart’s operations and occurred on Lanehart’s projects.
The investigation led to the recovery of $246,570 in overtime back wages for 306 employees. Lanehart paid $199,342 to 243 employees for which the division found them jointly liable. PL Construction Services paid the remaining balance of $47,228 to 76 employees.

PL Construction Services LLC is based in St. Rose, and Lanehart Inc. is based in Baton Rouge.

“Too often we find workers denied wage protections such as the right to overtime pay and other benefits – including unemployment insurance, workers’ compensation and health insurance – by employers who misclassify them as independent contractors,” said Wage and Hour District Director Troy Mouton in New Orleans. “Our investigation shows the costly consequences employers face when they or their subcontractors fail to comply with the law. When we determine a joint employment relationship exists, the Wage and Hour Division will hold all responsible employers accountable for the violations.”

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US Department of Labor Finds Honolulu Contractor Failed to Pay Correct Wages, Fringe Benefits to 46 Employees on Federally Funded Projects

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Agency: Wage and Hour Division
Date: August 2, 2022
Release Number: 22-1586-SAN

Investigation recovers $156K in back wages, benefits for Tunista Services LLC’s workers

HONOLULU – A U.S. Department of Labor investigation has recovered $156,837 in back wages from a Honolulu contractor who paid 46 workers lower wages than the law allows for the type of work they performed under federal contracts awarded by U.S. Marine Corps, Navy, Army and Coast Guard in Hawaii.

The department’s Wage and Hour Division determined that Tunista Services LLC failed to pay truck drivers, material handling laborers, warehouse specialists, forklift operators, service order dispatchers, janitors and other workers the correct wage rates set by federal law for their services. Instead, the employer paid several workers lower hourly rates than required for their occupations, in violation of the McNamara-O’Hara Service Contract Act.

Tunista Services also violated the provisions in the act – which governs employee pay standards for contractors and subcontractors on federally funded contracts – when they failed to provide the required health benefits, sick leave pay, holiday pay and vacation pay.

In addition, the employer violated the Contract Work Hours and Safety Standards Act, which requires overtime pay for hours over 40 in a workweek. The employer based its overtime calculations on the lower, incorrect wage rate and failed to pay the full overtime due.

The $156,837 recovery includes $84,995 for paying incorrect occupational wages, $56,596 for underpayment of fringe benefits, $14,791 reimbursement for unpaid sick leave and $455 in overtime pay for the affected workers.

“Federal contractors who fail to pay correct wages and fringe benefits shortchange workers, reduce their labor costs illegally and gain unfair advantage over their law-abiding competitors,” said Wage and Hour Division District Director Terence Trotter in Honolulu. “We strongly encourage all federal contractors to review their own pay practices and ensure they comply with the law.”

Learn more about the division, including its search tool to learn if you are owed back wages collected by the division. For confidential compliance assistance about the Service Contract Act and the Contract Work Hours and Safety Standards Act, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Help ensure hours worked and pay are accurate by downloading the department’s Android and iOS Timesheet App for free.

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US Department of Labor Recovers $178k in Back Wages for 27 Workers of Houston Employer Who Misclassified Them as Independent Contractors

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: July 28, 2022
Release Number: 22-1438-DAL

M&M’s Welding & Fabricating failed to pay workers overtime

HOUSTON – An investigation by the U.S. Department of Labor has recovered $178,358 in overtime back wages for 27 employees of a Houston welding and fabrication company that misclassified them as independent contractors and denied them their full wages and benefits.

The department’s Wage and Hour Division found M&M’s Welding & Fabricating – operating as M&M’s Welding – misclassified the workers who specialize in the erection of structural steel buildings. As a result, the employer failed to pay the overtime premium for hours over 40 in a workweek and paid only straight time for all hours worked.

“M&M’s Welding & Fabricating exploited vulnerable workers by misclassifying and denying them the overtime pay they earned,” explained Wage and Hour Division District Director Robin Mallett in Houston. “Employers who do this harm workers and their families who depend on their earnings and benefits. They also gain an unfair advantage over their business competitors who abide by the law. The Wage and Hour Division will hold these employers accountable.”

The Wage and Hour Division is responsible for determining whether employees have been misclassified as independent contractors and have been denied critical benefits and labor standards protections. In fiscal year 2021, the division identified more than $36 million in back wages owed to about 21,000 construction industry workers. In its investigations, the division commonly finds violations related to employers failing to pay overtime when required, misclassifying workers as independent contractors, and not paying them for time spent on work-related travel, or pre- and post-shift work.

The Bureau of Labor Statistics projects construction industry employment to grow at a rate of 6 percent by 2030, with a gain of approximately 400,000 jobs. Employers who ensure their workers are paid their rightful wages and benefits will be best positioned to retain and recruit skilled workers.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. The division protects workers regardless of immigration status and can communicate with workers in more than 200 languages.

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Justice Department and National Labor Relations Board Announce Partnership to Protect Workers

Posted by National Alliance for Fair Contracting on

Department of Justice – Office of Public Affairs
Tuesday, July 26, 2022

Agencies Will Enhance Enforcement Efforts Through Greater Coordination and Information Sharing, Cross-Agency Training and Outreach

The Justice Department’s Antitrust Division and the National Labor Relations Board (NLRB) signed a memorandum of understanding (MOU) today to strengthen the partnership between the two agencies to better protect competitive labor markets and ensure that workers are able to freely exercise their rights under the labor laws. By strengthening their partnership, the agencies also achieve the objectives of the President’s Executive Order on Promoting Competition in the American Economy just days after the Order’s one-year anniversary.

“Protecting competition in labor markets is fundamental to the ability of workers to earn just rewards for their work, to live out the American dream, and to provide for their families,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “By cooperating more closely with our colleagues in the NLRB, we can share information on potential violations of the antitrust and labor laws, collaborate on new policies and ensure that workers are protected from collusion and unlawful employer behavior. As the department noted in the amicus brief we submitted in the NLRB’s recent Atlanta Opera matter, we support the Board’s ongoing efforts to update its guidance to ensure that workers are properly classified under the labor laws. Protecting the right of workers to earn a fair wage is core to the work of both our agencies, and it will continue to receive extraordinary vigilance from the Antitrust Division.”

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What Is Wage Theft — and Could You Be a Victim?

Posted by National Alliance for Fair Contracting on

Katie Couric Media – July 20, 2022

We break down this increasingly prevalent form of exploitation in the workplace.

It’s an increasingly buzzy term doing the rounds in the working world, but are you familiar with the concept of wage theft? And would you be able to spot this phenomenon if it popped up in your office? We’ve broken down some of the most common forms of wage theft — plus how employers may be trying to get away with them — and got the scoop from an employment law attorney on how to proceed if you think you may be a victim.

What is wage theft?

Essentially, wage theft occurs when an employer doesn’t pay wages or other benefits that an employee has earned.

Some forms of wage theft are easier to spot than others, but there are some key signs to look out for. If you’re an hourly worker who regularly works overtime without being paid for those extra hours, you’re a victim of wage theft. Other common forms include misclassifying an employee as an independent contractor, not paying earned time off or holidays, being asked to complete work tasks when you’re off the clock, or constantly having to arrive early or stay late without compensation.

“Here’s an example pulled from one of our current claims,” says Joshua Konecky, an employment law partner at Schneider Wallace Cottrell Konecky LLP. “A worker must be at the warehouse at a specific time, such as 7 a.m. If they are not there, they will not get work for that shift. But they must commute to the warehouse and wait, sometimes as much as an hour or two, before they’re assigned work or released for the day. They should be paid for that waiting time.”

Being forced to work through meal breaks, being made to pay upfront for a uniform (if, after the cost is deducted from your paycheck, you’re being paid less than minimum wage), and employers skipping your final check after you’ve left a job all count as wage theft, too. …

Is anything being done about this?

Following some setbacks, yes. The number of investigators — the people who respond to complaints about wage theft — at the Wage and Hour Division (WHD) in The Department of Labor dropped by nearly 16 percent under the Trump administration. In late January however, the department announced plans to hire 100 new investigators, and it’s expected to take a tougher approach with employers moving forward.

Some states have also been increasing their own deterrents against less diligent employers and companies. Connecticut now requires employers to pay employees back double the amount of any wages stolen, and Minnesota has a law that specifies criminal charges with jail time and fines of up to $100,000 for those who commit wage theft. In Washington, D.C., employers who commit wage theft can be found guilty of a misdemeanor and sentenced to up to 90 days in prison, in addition to a $10,000 fine for each affected employee.

What should I do if I’ve been a victim of wage theft?

First, however you decide to proceed, be sure to keep a record of every instance when you suspect you’ve been a victim.

Then, speak with your manager. A responsible supervisor should sort it out right away, but if they don’t, take the issue to a different manager, or to human resources. Keep records of these interactions too.

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Governor Hochul Announces Major Crackdown to Combat Wage Theft

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Office of Gov. Hochul – July 20, 2022

Wage Theft Task Force Recovers Nearly $3 Million in Restitution Owed to Workers and New York State

Launches New Hotline to Report Wage Theft and Recover Stolen Wages – 833-910-4378 – and Develops Online Wage Theft Reporting and Tracking Tool

Governor Kathy Hochul today announced major actions to combat wage theft and protect the paychecks of hardworking New Yorkers. The Governor announced that the Wage Theft Task Force, a coordinated effort between the New York State Department of Labor, the New York State Attorney General, and District Attorneys, has recently secured felony convictions and agreements from more than a dozen businesses and 265 individuals to pay nearly $3 million in wage restitution and contributions owed to New York State since the beginning of the COVID-19 pandemic. The Governor also announced new efforts to double down on the success of the Task Force, launching a new hotline and developing a state-of-the-art online wage theft reporting system to create more opportunities for workers to report wage theft and receive what they are owed while protecting their privacy and safety.

Starting today, New Yorkers can report wage theft directly to the New York State Department of Labor by calling the new hotline at 833-910-4378, which has interpretation services available. The online reporting system will give New Yorkers the ability to report wage theft online in a variety of languages while improving the Department’s ability to track complaints and identify trends.

…

“Wage theft is a serious issue and I join the Governor, Attorney General and the Department of Labor in saying that New York will not tolerate the theft of hardworking New Yorker’s livelihoods,” said Lieutenant Governor Antonio Delgado. “The measures announced today will help us combat this issue and bring restitution to these victims.”

To further empower New Yorkers to report theft, NYSDOL has also begun developing a new, state-of-the-art Worker Protection Management System, where New Yorkers can report claims online in multiple languages and receive updates in real time about the status of their claim. The $10 million project, set to be complete in 2023, will also provide the Department with real time data, enhancing its ability to analyze and identify violation trends. This builds on the Governor’s ongoing efforts to improve transparency and increase accountability in State government.

Wage Theft Task Force

The Wage Theft Task Force initially leveraged criminal laws to achieve justice for construction workers in cases involving wage theft, fraud, and safety hazards. The Task Force has recently expanded its scope into other industries and counties in New York State. The Wage Theft Task Force includes NYSDOL, the New York State Attorney General’s Office, the New York State Insurance Fund (NYSIF), the Offices of District Attorneys across the State, and the New York City Department of Investigation. The Task Force works closely with labor unions and community-based organizations as part of efforts to support workers and recover owed wages.

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US Department of Labor Proposes Rule to Provide Workers on Federal Service Contracts Right of First Refusal of Employment

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Agency: Wage and Hour Division
Date: July 14, 2022
Release Number 22:-1338-NAT

Implements Executive Order 14055 to promote retention of qualified workers

WASHINGTON – The U.S. Department of Labor will publish a Notice of Proposed Rulemaking on July 15, 2022, to implement the requirements of Executive Order 14055, “Nondisplacement of Qualified Workers Under Service Contracts.” The proposal would benefit workers who perform work on service contracts by generally requiring that they receive an offer of employment from a successor contractor to a position for which they are qualified.

EO 14055 requires that contractors and subcontractors performing work on covered federal service contracts (i.e., most SCA-covered contracts over $250,000), must, in good faith, offer service employees employed under the predecessor contract a right of first refusal of employment on the successor contract. By doing so, the order seeks to prevent displacement of skilled workers in the federal services workforce. The proposed rule would establish standards and procedures for implementing and enforcing the nondisplacement protections under the order.

The department anticipates the proposed rule would if finalized provide economic benefits and enhanced efficiency in covered contracts by promoting the retention of experienced workers, thereby reducing the disruption in the delivery of services during the transfer of covered federal service contracts, maintaining physical and information security, and providing the federal government with an experienced and well-trained work force familiar with government personnel, facilities and requirements.

Specifically, the NPRM proposes to do the following:

  • Establish standards and procedures for implementing and enforcing Executive Order 14055.
  • Specify contracting agency and contractor obligations, respectively, under the Executive Order.
  • Establish an investigation process that protects workers from displacement and is familiar to federal contractors.
  • Identify sanctions and remedies that may be imposed by the department under the Executive Order.

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FACT SHEET: White House Announces over $40 Billion in American Rescue Plan Investments in Our Workforce – With More Coming

Posted by National Alliance for Fair Contracting on

The White House – Briefing Room

July 12, 2022

Vice President Kamala Harris to deliver remarks at White House Summit and reinforce call for state and local leaders to invest American Rescue Plan funds to help more Americans secure good-paying jobs

On Wednesday, the White House will announce that over $40 Billion in American Rescue Plan funds have been committed to strengthening and expanding our workforce. White House officials will highlight top American Rescue Plan workforce best practices from Governors, Mayors, and County Leaders across the country, and call on more government officials and private sector leaders to expand investments in our workforce. Vice President Kamala Harris will deliver remarks kicking off a half-day White House Summit. Since passage of the law, states, localities, community colleges, and local organizations have leveraged American Rescue Plan resources to deliver training, expand career paths, encourage more Registered Apprenticeships, provide retention and hiring bonuses in critical industries, and power efforts to help underserved Americans and those who face barriers to employment secure good jobs. These investments in the workforce – along with the American Rescue Plan’s direct payroll support that has saved or restored jobs across a broad set of industries – have contributed to a record 9 Million jobs added since President Biden took office in the fastest and strongest jobs recovery in American history.

The half-day White House Summit on the American Rescue Plan and the Workforce will feature remarks by Vice President Harris and Secretary of Labor Marty Walsh, a session on state American Rescue Plan workforce investments with North Carolina Governor Roy Cooper and Pennsylvania Governor Tom Wolf, as well as panels with Mayors, County Leaders, and Labor and Community Leaders on their model American Rescue Plan workforce programs. The Summit will focus on three major areas of American Rescue Plan investment:

1. Building a Diverse and Skilled Infrastructure Workforce: President Biden and Vice President Harris have launched the Administration’s Infrastructure Talent Pipeline Challenge to encourage immediate partnerships by the public and private sectors to ensure we have the diverse and strong workforce needed to help rebuild our infrastructure and supply chains here at home with the Bipartisan Infrastructure Law. Today’s session will focus on innovative programs to meet this challenge like the DC Infrastructure Academy, with a special focus on Pre-Apprenticeship programs funded by the American Rescue Plan. Pre-Apprenticeship programs play a critical role in diversifying the talent pipeline by training, placing, and retaining workers through Registered Apprenticeships – which the North America’s Building Trades Unions (NABTU) has cited as having a return on investment for employers of as much as $3 for every $1 invested. …

2. Strengthening Our Care and Public Health Workforce: The pandemic exposed the fragility and importance of our care economy. As part of an unprecedented commitment to a stronger care workforce, the American Rescue Plan contains significant investments in public health and the care economy that will help provide better pay and career opportunities for care workers and make it easier for workers with child and elder care responsibilities to join and stay in the workforce. U.S. prime-age labor force participation has fallen behind that of its competitors, in part due to lack of family friendly policies. Studies show that access to care can be an important determinant of whether workers are able to join or remain in the labor force. Millions of families rely on paid child and elder care to work, while millions more struggle to afford or find available care. The demand for child and elder care remains high and will only grow, with a projected need for over a million additional home health care workers over the next decade. Studies have shown that quality pathways for nursing aides leads to better outcomes for patients and workers. The American Rescue Plan is helping deliver supports for quality pathways for these essential jobs. …

3. Expanding Access to the Workforce for Underserved Populations: American Rescue Plan funds are being used to recruit more Americans facing barriers to employment – homelessness, disability, prior criminal justice involvement – and giving them pathways into the workforce. More than 600,000 people leave prison every year and confront significant challenges in accessing and sustaining stable, meaningful employment – a 2018 study estimated that formerly incarcerated individuals experience an unemployment rate of over 27 percent, exponentially higher than the overall national unemployment rate. Investments in expanding access to the workforce strengthen our economy by increasing labor force participation and tapping into the potential of more Americans, and research shows that certain programs – such as comprehensive reentry programs and summer youth employment programs – can significantly reduce crime. …

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New York Construction Wage Theft Law: Prime Contractors Responsible for Subcontractor’s Failures

Posted by National Alliance for Fair Contracting on

Friday,  July 1,  2022

The scope for liability related to employee wage claims has changed dramatically for contractors and subcontractors operating in New York under a new law that shifts wage payment obligations to prime contractors.

New York Governor Kathy Hochul signed into law NY State Senate Bill S2766C, which is intended to reduce wage theft claims and amend wage theft prevention and enforcement in the construction industry within the state, on January 25, 2022, and the new law is effective retroactively to January 4, 2022.

The Legislature proposed this amendment to existing wage theft law to increase the likelihood that allegedly exploited workers in the construction industry will be able to secure payment and collect unpaid wages and benefits for work already performed by shifting the ultimate payment obligation to prime contractors.

Prior to the new law, a worker could only bring a private lawsuit for alleged unpaid wages (including overtime and fringe benefits) against their direct employer. The New York State Assembly asserted that this was a major issue in the construction industry and that subcontractors hid assets, changed their corporate identities, or took part in other alleged unscrupulous practices to avoid liability and make themselves judgment-proof from a potential wage theft action.

The New Standards
There are two sections to the new law. Section one pertains to construction industry wage theft and is codified under NY CLS Labor § 198-e. Pursuant to this new section, a construction contractor, as defined within, would assume liability for any unpaid wages, benefits, damages, and attorney’s fees related to a civil or administrative action by a wage claimant or the Department of Labor against a lower tier subcontractor.

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US Department of Labor Launches Android Timesheet App for Workers, Employers to Record Work Hours, Overtime, Breaks; Compute Wages

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: June 30, 2022
Release Number: 22-1336

Empowers workers, provides valuable resource for employers

WASHINGTON – The U.S. Department of Labor’s Wage and Hour Division and Office of the Chief Information Officer today launched an app for use on Android devices that helps track work hours, break time, overtime hours and calculates wages due. The department previously launched the iOS version of the division’s Timesheet App.

The Timesheet App allows workers to ensure all their hours of work are recorded, including those hours when they telework, travel, perform pre- or post-shift work, or log-in while on-call. Workers can maintain a record of their work hours on the app to ensure their pay records are correct or to use if a pay dispute arises.

For employers, the app helps ensure that up-to-date timekeeping information is easily accessible in one location on their mobile device. Whether employees are paid hourly, by salary or by the piece, employers and employees can use this app to enter all relevant data and calculate the wages due. The app also performs detailed earnings calculations, enabling users to select from several pay frequency options depending on that day’s work. The app also allows extended commenting capabilities, facilitating more effective communication between employees in the field and their employers.

“By empowering workers with our Timesheet App, we are helping to prevent wage and hour violations before they occur,” said Acting Administrator of the Wage and Hour Division Jessica Looman. “This app allows workers – particularly those who may be vulnerable to wage theft – to track their hours and earnings and obtain help when they need it.”

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