Polis signs wage theft bill into law

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June 10, 2022
by Robert Davis | The Center Square

(The Center Square) – Colorado Governor Jared Polis signed a bill Thursday that increases penalties for businesses that withhold earned wages from workers without warrant.

Senate Bill 22-161 classifies wage theft as criminal theft and imposes automatic penalties of up to twice the withheld amount or $1,000, whichever is greater, against employers who violate the law. It also requires employers to pay an estranged employee’s earned wages within 14 days of receiving a written demand.

The bill was sponsored by Democrat Sens. Jessie Danielson, D-Wheat Ridge, and Sonya Jacquez Lewis, D-Boulder, and Reps. Monica Duran, D-Wheat Ridge, and Meg Froelich, D-Englewood.

“Wage theft is far too prevalent in Colorado, and it often hits working families the hardest,” Danielson said in a statement. “It’s essential that we support the folks who work hard to keep Colorado’s economy running. This law will ensure workers receive the full wages they have earned.”

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US Department of Labor Recovers $348k in Back Wages, Liquidated Damages for 144 Arizona Construction Workers Willfully Denied Overtime Pay

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VW Connect assessed $48K in penalties for intentional violations

Agency: Wage and Hour Division
Date: June 9, 2022
Release Number: 22-1136-SAN

PHOENIX – A federal investigation has recovered $348,380 in back wages and liquidated damages for 144 underpaid workers of an Arizona construction employer who failed to pay their overtime wages.

The U.S. Department of Labor’s Wage and Hour Division determined that VW Dig LLC – operating as VW Connect – automatically deducted 30-minute meal break periods every day even when employees worked through these periods, a violation of the Fair Labor Standards Act. The employer also failed to pay all hours worked due to improper recordkeeping that resulted in work hours often missing from payroll.

The investigation found the employer owed workers $174,190 in overtime wages earned for hours worked over 40 in a workweek. In addition to back wages and an equal amount of damages, the department assessed VW Connect with $47,926 in penalties for the willful nature of the violations.

“Manipulating timesheets to avoid paying a worker’s full earnings illegally denies them the wages on which they depend to care for themselves and their families. It also deprives them the dignity they are due,” said Wage and Hour Division District Director Eric Murray in Phoenix. “The outcome of this investigation shows that employers who violate the law can face costly consequences in the form of damages and penalties.”

In fiscal year 2021, the Wage and Hour Division recovered more than $36 million in wages owed to more than 21,000 construction industry workers. The Bureau of Labor Statistics projects more than 220,000 industry workers quit their jobs in April 2022 – the third highest number since 2012 – and 449,000 job openings in the industry, all of which makes for a job market in which employers must compete for workers.

“Employer who don’t pay workers all of the wages they’ve earned are likely to find it increasingly difficult to retain and recruit the people they need,” Murray explained. “Companies that comply with the law by paying full wages and benefits – and treating workers with the dignity and respect they deserve – will have a competitive advantage over those who cheat workers.”

Employers and workers can call the division confidentially with questions regardless of their immigration status. The department can speak with callers in more than 200 languages through the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, and its search tool if you think you may be owed back wages collected by the division.

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We Need to Talk About Wage Theft

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Ericka Cruz Guevarra, Farida Jhabvala Romero ,Alan Montecillo, Maria Esquinca
June 8, 2022 – KQED

In California, tens of thousands of workers aren’t getting paid what they’re owed by their employers. Many of these workers are low-wage earning immigrants in industries like construction, home care, and food service.

The state actually has a system in place where people can file claims of wage theft. But the system currently has a huge backlog, leaving people waiting years before they can try and and recover their money. In some cases, workers claim their employers stole tens or even hundreds of thousands of dollars from them.

The result? Many low-wage Californians miss out on rent, food, and can even lose their homes.

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Biden issues executive orders to spur clean energy construction

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Published June 7, 2022 – Construction Dive
Julie Strupp, Editor

Dive Brief:

President Joe Biden announced on Monday three executive orders under the Defense Production Act to increase domestically manufactured clean energy technology and boost clean energy construction projects.

The orders aim to expand manufacturing of critical clean energy technologies and put the financial power of federal procurement behind clean energy. It also seeks to boost solar panel supply in order to accelerate solar projects, which are one of the priorities in the $1.2 trillion Infrastructure Investment and Jobs Act.

America’s solar industry is facing tariffs on solar panels imported from Cambodia, Malaysia, Thailand and Vietnam, which supply about 80% of U.S. panels and parts. The tariffs have delayed or canceled hundreds of utility-scale solar projects; one of Biden’s orders provides a two-year tariff exemption to support construction projects in the United States right now, according to the White House press release.

Dive Insight:

The president can invoke the 1950 DPA to order private businesses to prioritize the production of materials that have been deemed necessary for national defense. In addition to pausing tariffs amid an ongoing Commerce Department probe to shore up the solar supply chain and prioritizing federal purchase of U.S.-made solar systems, Biden authorized the Department of Energy to rapidly expand domestic manufacturing of:

  • Solar panel parts.
  • Building insulation.
  • Heat pumps for buildings.
  • Equipment to make and use clean electricity-generated fuels.
  • Critical power grid infrastructure like transformers.

The administration said the new orders will help the government meet its goal of eliminating carbon from the country’s power supply by 2035, and will protect clean energy jobs and builds.

“Together, these actions will spur domestic manufacturing, construction projects and good-paying jobs – all while cutting energy costs for families, strengthening our grid, and tackling climate change and environmental injustice,” the White House release said.

The executive actions come after the Biden administration in May launched the IIJA-funded Interconnection Innovation e-Xchange to get more sources of clean energy connected to the national power grid. The Act includes $65 billion in clean energy investments.

(See Article)

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Ariz. Contractor Faces Big Fines Over Alleged Worker Pay Infractions

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June 7, 2022 – Jim Parsons
ENR Southwest

A federal judge has ordered a Tempe, Ariz., plastering and stucco contractor to rectify longstanding worker recordkeeping violations or face weekly coercive fines of up to $10,000.

The May 27 order, issued by US District Court Chief Judge G. Murray Snow against Valley Wide Plastering Inc., its owners and vice president, marks the latest chapter in a long-running effort by the U.S. Dept. of Labor to force firm compliance with the federal Fair Labor Standards Act.

According to court documents, separate department investigations, conducted in 2012 and 2017 into allegations of payroll discrepancies at Valley Wide, found that owners Jesse Guerrero and Rose Guerrero, and vice president J.R. Guerrero, intentionally allowed inaccuracies in the recording of employees work hours.

Examples included filling in false hours or manually altering the number of hours employees recorded without adequate justification. Evidence also suggested that Valley Wide failed to maintain daily time and payment records, including paying wages from non-payroll accounts, and intentionally reduced regular employee rates to give the false appearance of overtime pay.

A February 25, 2021, preliminary injunction, also issued by Judge Snow, ordered Valley Wide to implement a reliable timekeeping system and maintain accurate and complete records of each employee’s gross wages, deductions and net pay. The company subsequently converted from a piece-rate to an hourly wage system, with employees documenting time using a paper-and-pencil system.

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Commerce Fraud Bureau to get new powers to investigate wage theft, other financial crimes

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Max Nesterak
May 25, 2022

Labor leaders are calling a bill that passed the state House and Senate on Sunday the most significant piece of legislation for combating wage theft since it was made a felony in 2019.

The bill (HF 3255), which is awaiting Gov. Tim Walz’s signature, gives the Commerce Fraud Bureau new powers to criminally investigate financial crimes along with more than $800,000 a year to hire five more investigators.

“This is a very big deal,” said state Rep. Zack Stephenson, DFL-Coon Rapids, who authored the bill in the House. “All across the state, white collar crimes are in desperate need of more enforcement.”

Until now, the Commerce Fraud Bureau has been restricted by law to insurance fraud investigations — a function of the department being entirely funded by a tax on insurance companies.

The new law maintains that at least 70% of the department’s work must continue to focus on insurance fraud, but allows the department to investigate all financial crimes with money appropriated from the general fund.

That puts new power behind the state’s ability to criminally investigate labor violations that are rampant in construction and hospitality — yet seldom prosecuted. Payroll fraud in the construction industry alone costs the state upwards of $136 million a year in lost tax revenue, according to one estimate by the Midwest Economic Policy Institute.

“Wage theft and tax fraud are business models,” said Adam Duininck, director of governmental affairs for the North Central States Regional Council of Carpenters. “When we see it in such a concerted manner, the only way to patrol that is with aggressive enforcement.”

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ID and Tax Solution for Construction Worker Misclassification and Immigration Challenges

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By Charles Frantes
May 19, 2022

A recent presentation at the University of Saint Thomas in Houston highlighted how challenges associated with the outdated US immigration system have cultivated an inefficient, unethical, and unsafe shadow economy that threatens the sustainability of the construction industry. Stan Marek, CEO of MAREK, and Loren Steffy, award-winning author and business journalist, discussed how workforce shortages, the lack of a pathway for unauthorized immigrants to earn legal status, and the lack of enforcement against worker misclassification and payroll fraud have made it easier for unscrupulous employers in the construction industry to profit at the expense of law-abiding taxpayers, workers, and businesses. They called on lawmakers to pass a bipartisan ID and Tax policy as a solution.

In the construction industry where workforce shortages are rampant and competition for bids is fierce, Marek explained that one way that many companies cut costs is by classifying their workers as independent contractors instead of employees. Many businesses also pay workers off the books in cash. This allows those employers to avoid paying payroll taxes and providing benefits like health insurance and workers’ compensation. Doing this not only allows those employers to undercut and underbid companies that are following the rules, it also cheats taxpayers, and leads to a degradation of the trades due to a lack of emphasis on training and the treatment of workers as disposable.

Marek stressed the importance of the employer-to-employee relationship and the safety and skills training that comes along with it and explained how doing things the right way can actually end up saving costs in the long run and even help to alleviate rising housing costs.

“When you have a system where everybody is an independent contractor and you don’t have an employee to employer relationship, they don’t get the training that employees do. Our company prides itself on safety. Job sites are dangerous. Safety is number one, and then skills training. Somebody that is trained to do a specific function does it better. A big problem we have in construction is doing it twice. So many people, when they’re not trained, make a mistake and it has to be redone. It’s estimated 20-25% of projects have to be redone because people don’t have the skills training,” said Marek.

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State Senate considers defining wage theft in state law

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Delaware Public Media | By Paul Kiefer
Published May 18, 2022

Delaware’s Department of Labor and Department of Justice are backing a bill that would criminalize wage theft by employers.

Deputy Secretary of Labor Rachel Turney says under current Delaware law, employees paid under the table or misclassified as independent contractors have no clear way to seek justice if their employer doesn’t pay them appropriately for their work.

“The goal of the bill is to provide protection to workers who are paid under the table or misclassified as independent contractors, and therefore are not covered by the workers protection laws in place,” she said.

Her office estimates it receives about 1,000 of these complaints each year, and Turney says the most they can do is refer them to agencies like the IRS, which rarely take up individual worker complaints.

Sam Noel, a spokesman for Carpenters’ Union Local 255, supports the bill, saying it would help address the increasing misclassification of workers in the construction industry.

“This really helps the industry have contractors all on the same playing field,” he said.

This bill would allow employees to bring complaints to the Department of Labor, which would hold a hearing with the employer accused of wrongdoing. Employers found not to have paid an employee correctly would be required to provide restitution to the employee and pay a fine. Those fines would help pay for two enforcement officers – one at the Department of Labor, and another at the Department of Justice.

But State Sen. Colin Bonini is concerned about that funding structure.

“I’m always loathe to create enforcement mechanisms that are self-funding based on the fines they can levy on the people they’re overseeing,” he said.

Despite those concerns, the bill cleared the Senate’s labor committee on Wednesday.

(See Article)

Brown Introducing Legislation to Crack Down on Companies That Cheat Workers out of Wages They Earned

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Office of Sen. Sherrod Brown
May 18, 2022

New Report Reveals More than 200,000 Ohioans Lose Out on Thousands of Dollars in Wages Each Year; Brown Bill Would Help Put Wages Back in Workers’ Pockets, Strengthen Worker Protections

WASHINGTON, DC – U.S. Senator Sherrod Brown (D-OH) joined Policy Matters Ohio and Ohio workers for a news conference call to discuss his Wage Theft Prevention and Wage Recovery Act, new legislation to crack down on employers that unfairly withhold wages from their workers.

New analysis from Policy Matters Ohio finds that each year, employers steal from at least 213,000 Ohioans by paying them below the minimum wage, costing a worker who is on the job the full year an average of $2,900, or a quarter of their total wages they earned.

Brown’s new bill with Sen. Patty Murray (D-WA) and his colleagues would put hard-earned wages back in workers’ pockets and crack down on employers who unfairly withhold wages from their employees.

“It’s simple: If you put in the work, you should get paid for it. Companies should not be able to cheat workers out of the wages they earned and get away with it,” said Brown. “Our bill will give workers the power to fight back and recover their lost paychecks, and it will mean real consequences for employers that steal the wages Ohioans work so hard for.”

Brown was joined on the call by two Ohio workers whose wages were stolen by their employers.

“So many people keep quiet about wage theft for fear of losing their jobs. It’s time we put a stop to this,” said Ernest Hatten of Cleveland.

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Honest day’s pay

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Policy Matter Ohio
May 18, 2022

KEY FINDINGS: WAGE THEFT IN OHIO

  • Ohio employers steal from an estimated 213,000 workers a year by paying them less than the state or federal minimum wage.
  • If wage theft victims stayed on their job the full year, the total underpayment of wages to these Ohio workers would be $611 million each year.
  • While 3.8% of all Ohio workers have wages stolen each year, employers steal from 18.4% of workers paid $11.44 per hour or less.
  • Victims of minimum wage violations are underpaid an average of $55 per week, 24% of the weekly earnings owed to them. If they work year-round, they lose, on average, $2,873 per year and are paid only $9,011 in annual wages.
  • Women make up about three in five victims who are paid below the minimum wage.
  • Hispanic workers were 74% more likely to become victims than white counterparts, while Ohioans of other races — about three quarters of whom are Asian — were 51% more likely. Black workers were about as likely to indicate wages below the minimum wage as white workers, but Black workers spent more hours working for employers who stole from them and lost more wages, overall.
  • About 54,000 parents are paid below the minimum wage each year. Together they are raising about 108,000 children under 18 years old.
  • Low-paid workers in all industries are vulnerable, but half the wage theft cases occurred in the leisure and hospitality industry.

Introduction

Everyone who works should be paid their full wages for all the hours they put in. Too often in Ohio, employers steal from workers’ paychecks. By underfunding wage and hour enforcement, Ohio lawmakers make it too easy for employers to commit wage theft, and too hard for workers to be made whole. The scale of wage theft is difficult to measure, but we know that it far exceeds the number of cases ever reported. Most wage theft victims never come forward because they don’t know their rights, think nothing will be done for them, or fear retaliation from their employer.

Using Current Population Survey (CPS) data and a method developed by the Economic Policy Institute (EPI), this report quantifies the scope and cost of wage theft to Ohio’s working people. Employers steal from an estimated 213,000 Ohioans each year through minimum wage violations alone.[1] This report updates prior research released by EPI and reveals that, in the five years since that research was released, the scale of wage theft in Ohio has remained virtually unchanged.[2] Employers in all sectors steal from employees, but wage theft is most prevalent in industries that pay low wages, especially leisure and hospitality. Wage theft compounds financial hardships for people who are too often exploited at work due to their race, gender, immigration status or socioeconomic class.

This report quantifies the scope and cost of wage theft to Ohioans through minimum wage nonpayment alone. Because the vast majority of wage theft goes unreported, most types of wage theft cannot be measured. This report identifies minimum wage nonpayment — just one form of wage theft — from respondents to the Current Population Survey who identified their wage as less than the federal or Ohio minimum wage, regardless of whether they ever made a wage claim. These estimates have been produced by Policy Matters Ohio following a research methodology developed by EPI. Data are from the CPS Outgoing Rotation Group for years 2017-2019, using the extract from the Center for Economic Policy Research.[3] Exempt workers are identified wherever possible so that those estimated here to be wage theft victims were both paid less than the minimum wage and covered employees under state or federal law. Wages are reported in current year dollars. A full methodology is available from Policy Matters Ohio.

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(Executive Summary)

(Full PDF of Report)