AG Shapiro Calls for Federal Action to Protect Public Construction Workers

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Office of Attorney General Josh Shapiro (PA)
May 17, 2022

HARRISBURG–Attorney General Josh Shapiro and Secretary of Labor & Industry Jennifer Berrier filed comments today in support of the United States Department of Labor’s (“USDOL”) proposed updated regulations to the Davis-Bacon and Related Acts (“DBRA”).

“The Department’s proposal would put in place common-sense rules that experience shows will help enforcement agencies catch serious, intentional violations of the law,” said Attorney General Shapiro. “The men and women who build Pennsylvania’s infrastructure should be paid all of the money they have earned, and honest contractors should not have to compete on an uneven playing field with lawbreakers.”

The DBRA is intended to level the playing field among bidders for public construction contracts and protect workers. The DBRA accomplishes its goal by ensuring that all contractors working on projects that receive federal funding pay the wage rates that prevail in a given geographical region as determined by USDOL. Contractors are generally permitted to satisfy a portion of the required wage by providing qualifying fringe benefits to employees

“It’s been over 40 years since these regulations were significantly updated,” said Secretary Berrier. “These regulations will ensure that workers who perform the important and difficult work of updating Pennsylvania’s infrastructure are paid a true prevailing wage and receive the benefits they deserve.”

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NY rail company to pay overtime violations on projects in Massachusetts

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By: Ashley Shook
May 16, 2022

BOSTON (WWLP) – A New York-based rail system company was issued a citation and will pay more than $220,000 for overtime and payroll violations on projects in Massachusetts.

According to the Massachusetts Attorney General’s Office, Railworks Track Systems, Inc. and its President Gene J. Cellini, will pay more than $220,000 in restitution and penalties to resolve allegations that it failed to pay the proper overtime rate to workers on public works projects in the Berkshires, on Cape Cod, and in Framingham, and failed to submit accurate certified payroll records, Attorney General Maura Healey announced.

Restitution will be provided for 84 employees that were not paid properly for five railroad improvement projects in Hyannis, Falmouth, Framingham, Great Barrington, Lee, Lenox, Pittsfield, Sheffield, and Stockbridge.

“Companies must pay their employees the wages they’ve earned and are legally entitled to,” said AG Healey. “We are pleased to have secured this relief for the more than 80 affected workers, and hope that this sends a message to employers that we hold them accountable if they do not properly compensate their workers.”

The Attorney General’s Office received a referral in 2020 from the Foundation for Fair Contracting of Massachusetts, alleging that Railworks Track Systems was improperly paying its employees. The investigation revealed the payroll records did not include employee addresses, and that the company claimed a type of fringe benefit that is not permitted under Massachusetts prevailing wage laws. The fringe amounts were paid, but the amounts did not include overtime.

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Report: Union contractors have less trouble finding skilled workers

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Researchers from the Illinois Economic Policy Institute (ILEPI) and the Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign (UIUC) have analyzed three years’ worth of data collected by the Associated General Contractors of America (AGC) and have concluded that the shortage of skilled workers has been harder on nonunion construction firms.

The numbers

Nonunion construction firms when compared to union contractors, according to the ILEPI and PMCR report, were:

16% more likely to report difficulty filling open positions;
13% more likely to report losing skilled workers to other industries;
21% more likely to report project delays due to workforce supply or retention issues; and
27% more likely to report a poor local workforce training pipeline.
The AGC surveys that researchers used were conducted from 2018 to 2021, so the additional workforce difficulties encountered by nonunion construction companies were present before the COVID-19 pandemic. The AGC data included responses from 1,768 union contractors and 3,893 nonunion contractors.

“While a tight labor market is clearly impacting the entire construction sector, the data shows that these issues are far more acute in the nonunion segment of the industry,” said Frank Manzo IV, ILEPI executive director and report coauthor.

“The superior outcomes reported by union firms reveal that long-term investments in job quality and apprenticeship training are every bit as critical to the success of construction employers as the ability to access materials, secure regulatory approvals or win project bids,” he said.

On issues surrounding the materials supply chain and regulatory approvals, the gap between nonunion and union responses was negligible, according to researchers.

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Maine Compass: Clean energy future relies on workforce development programs and union jobs.

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May 14
Justin Walsh

… Like my father before me, I am now a member of my industry’s local union in Maine. For the past two years, I’ve served as the Training Director for the International Brotherhood of Electrical Workers (IBEW) 567. I began my path toward journeyman electrician in the same apprenticeship program I now oversee.

Despite growing up in a union household, I didn’t initially understand the purpose of being in one. I expected all employers to provide their workers with the means for a sustainable life and retirement. But union jobs in the electrical industry provide higher wages, safer work environments, job security, and benefits, including pension and medical. In childhood, I suffered from ear issues for which, without the union health insurance my father received, we wouldn’t have been able to afford treatment. Union benefits spared me a lifetime of pain.

Since I participated in IBEW’s apprenticeship program, there have been shifts in the industry that have made different experiences and learning opportunities available. Most notably, the increasing use of renewable energy and the investments made through the Infrastructure Investment and Jobs Act (IIJA) in electric vehicles (EVs) and EV infrastructure. …

Investing in green technology and renewable energy reduces family energy bills, public health problems, and pollution while making the power grid more reliable. Continuing investments in these technologies and promoting good jobs standards and workforce development programs — like those found in L.D. 1969 in Maine, which has now been signed into law — will create quality clean energy jobs and advance equity in the renewable energy industry. These are imperative to ensure workers can gain access to these fields, learn the skills of the trade, and earn wages and benefits that will sustain careers in building and maintaining greener infrastructure.

Justin Walsh is the training director for a local electrical workers union.

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Jersey City electrical subcontractor underpaid workers by nearly $800K in wages, benefits: feds

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By Ron Zeitlinger | The Jersey Journal
May 13, 2022

A Jersey City electrical subcontractor on a federally funded residential townhome and apartments project in Paterson underpaid 11 electricians by a total of nearly $800,000 in wages and benefits, a federal investigation found.

Deen Electrical Contractors Inc. misclassified the workers at the Riverside Townhomes and Senior Apartments public housing project and paid them as laborers, in violation of the Davis-Bacon and Related Acts, Department of Labor officials said. By doing so, Deen underpaid the electricians for work on the project that was funded through the U.S. Department of Housing and Urban Development.

The investigation by the U.S. Department of Labor’s Wage and Hour Division led to the recovery of $799,479 in back wages for the 11 electricians.

“Contractors and subcontractors on federally funded projects are legally obligated to accurately identify workers on work sites, pay them the local prevailing wages and fringe benefits and submit weekly certified payroll records to the contracting agency.” Wage and Hour Division District Director Paula Ruffin said.

Officials said that when the federal investigation was completed, Deen Electrical paid the back wages promptly.

Based in Jersey City, Deen Electrical Contractors Inc. has been a family-owned and operated contractor for more than 30 years, serving commercial builders, residential owners and performing work under state and federal contracts in North Jersey and the surrounding area, federal officials said.

Contractors and subcontractors on federally funded projects are required to properly identify workers and pay them the applicable prevailing wage rate, in addition to submitting weekly certified payroll records to the contracting agency. They are also required to post the Davis-Bacon poster on the job site.

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Scott, Delauro, Murray Introduce Bill to Stop Wage Theft and Improve Wage Recovery

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May 10, 2022
Press Release

As originally released by the Committee on Education & Labor

WASHINGTON, DC – Today, Chair of the House Education and Labor Committee Congressman Robert C. “Bobby” Scott (VA-03), Chair of the House Appropriations Committee Congresswoman Rosa DeLauro (CT-03), and Chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee Senator Patty Murray (D-WA) introduced the Wage Theft Prevention and Wage Recovery Act; comprehensive legislation to put hard-earned wages back in workers’ pockets and crack down on employers who unfairly withhold wages from their employees. This bill would give workers the right to receive full compensation for the work they perform, as well as the right to receive regular paystubs and final paychecks in a timely manner.

“It is unacceptable that dishonest employers can steal workers’ wages with little to no consequence. Each year, our most vulnerable workers are cheated out of billions of dollars. We cannot grow the middle class or expect workers to confidently return to the workforce when we don’t even have adequate deterrents to prevent wage theft,” said Chairman Scott. “Workers and employers must be able to trust that our labor laws will hold unscrupulous employers accountable for violating the law and help workers recover the wages stolen from them. This bill would take critical steps to help workers receive the full pay they’ve earned for all hours worked, including overtime pay, and level the playing field for law-abiding employers.”

“Simply put, the biggest economic challenge currently affecting workers across the country is that they are in jobs that do not pay them enough to survive. People are struggling. Every day, countless workers are punching in and working long hours for an honest day’s pay only to have their employers cheat them out of their wages. That is inexcusable, and Congress has the responsibility to act to ensure hard working people receive their hard-earned wages,” said Chair DeLauro. “The Wage Theft Prevention and Wage Recovery Act is comprehensive legislation that will strengthen current federal law and empower employees to recover their lost wages. Whether it is compensation for a day’s work or overtime, employees should be paid what they earn. This legislation puts workers first and boosts economic security for families while helping our economy grow.”

“No worker should ever be cheated out of the hard-earned pay they have worked for—it’s as simple as that,” said Chair Murray. “That’s why I’m proud to join my colleagues to reintroduce the Wage Theft Prevention and Wage Recovery Act, which strengthens federal protections to make sure all workers are paid for the work they’ve done—and can fully recover wages their employers have stolen from them. It’s time we pass this commonsense bill and ensure workers across the country get paid what they’ve earned.”

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If you want a construction project finished on time without worker shortages, hire a unionized crew, a new report says

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Juliana Kaplan
May 10, 2022

  • Unionized construction jobs tend to offer better pay, benefits, and training opportunities.
  • A new report found nonunion firms have more trouble hiring, and are more likely to see project delays.
  • While construction is more unionized than the national average, the majority is still nonunion.

Like businesses across the country, construction contractors say they’re dealing with a labor shortage.

Despite rising wages, the Associated Builders and Contractors said the industry still needs nearly 650,000 workers after3.2% of the workforce quit in March 2022, the second-highest rate since the Bureau of Labor Statistics began measuring it. Amidst a hot real estate market, employers struggle to hire enough workers to keep up.

“The construction worker shortage has reached crisis level,” Home Builder Institute president and CEO said in November 2021.

But the authors of a new report from the Illinois Economic Policy Institute (ILEPI) and Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana Champaign argue that the labor supply crunch is nothing new. There is, however, one factor that seems to make the difference in whether contractors can keep their workers and finish projects on time: If their workers are unionized.

“Union contractors are significantly less likely to have delays in completion times due to shortages of workers — and they’ve actually been more likely to add workers in this tight labor market,” Frank Manzo IV, the executive director of ILEPI and co-author of the report, told Insider.

Manzo, PMCR director Robert Bruno, and PMCR fellow Larissa Petrucci analyzed the results of the Associated General Contractors of America (AGC) surveys from 2018 to 2021. The annual survey polls about 2,000 firms on what’s happening in the world of construction labor; beginning in 2018, the survey broke out specific data from union and nonunion contractors.

The results: Nonunion contractors were 16% more likely to say they had difficulty filling open roles than union contractors. They were also 21% more likely to see their project completion delayed because of worker shortages, and 13% more likely to lose craft workers to other industries.

“Union contractors have been significantly less likely to be losing their workers to other industries. So the non-union side is losing their workers to other industries at much higher rates than the union side,” Manzo said. “That’s because the union segment of the industry offers competitive annual earnings, health insurance coverage, retirement benefits, all of which rival bachelor’s degrees.”

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(See PDF Copy of Report)

We need new tools to deal with epidemic of wage theft

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What happened in Amherst should never happen again

TOM JURAVICH
Apr 30, 2022

MASSACHUSETTS NEEDS new legislation to curb wage theft because what happened in Amherst should have never happened and should never happen again. Nine undocumented Hondurans worked 10 hours a day, six days a week for five weeks in a row hanging sheetrock in a new apartment complex in Amherst. Collectively they were owed $50,173 for their labor – but they did not receive one penny in wages. …

Despite Beacon’s commitment to building affordable housing, their progressive social values did not guide the way the development was built. They relied on multiple subcontractors who used undocumented workers who were illegally misclassified as independent contractors. This allowed them to defraud the state by not paying taxes, unemployment insurance, and workers compensation.

Our recent study that examined the records of the Commonwealth found that more than one in six employees in construction are illegally misclassified, and that this costs Massachusetts as much as $82 million annually. And paying workers in cash as independent contractors has created a hothouse for wage theft, as we saw in Amherst.

Beacon Properties hired Keith Construction as the general contractor, which awarded Combat Drywall the contract to hang the sheet rock. Combat, however, has no employees to perform the work and subcontracted the work to Alvarez Drywall.

Alvarez is not registered with the secretary of state in Massachusetts as a business, has no website, no phone number, no real company identity. In fact, Alvarez is not a drywall company. It is simply a labor broker that brought undocumented workers to the job to work as “independent contractors” under Combat supervision. They were not employees and Alvarez would pay them in cash – or Alvarez was supposed to. …

The right to be paid for the work we do in a timely fashion is perhaps our most basic employment right in Massachusetts. No worker in the Commonwealth should ever have to suffer what the workers at the North Square apartments had to go through. We need to hold employers and lead contractors responsible and stop this kind of wage theft with the passage of H1959.

We should all be able to drive or walk through our communities and not have to worry about what is taking place at building and construction sites. As I drive by the North Square Apartments on my way to work now, it stands as a monument to the mistakes that we made and how this can never happen again.

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Maine labor coalition scores major legislative win creating renewable energy jobs

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April 29, 2022
Dan Neumann

The Maine Labor Climate Council, a new coalition made up of a dozen unions from across the state representing a variety of different industries, won its first major victory in the Maine Legislature this week.

The top priority bill for the council this session, LD 1969, introduced by Rep. Scott Cuddy (D-Winterport), went into law without Gov. Janet Mills’ signature on April 25. The law will require prevailing wages and equity standards on all large, utility-scale renewable energy projects including solar, wind, tidal, geothermal and hydropower. …

The new law mandates that contractors pay the prevailing wages customary for each occupation in an industry. The new law will also build a career path for Mainers wanting to get into the clean energy sector by developing pre-apprenticeship programs that will help them access union-registered apprenticeship programs.

LD 1969 also incentivizes employee ownership of renewable energy construction projects as well as the use of Projects Labor Agreements — pre-hire negotiated agreements that require strong labor standards regarding wages, hours, working conditions and dispute resolution methods. The law directs the Maine Public Utilities Commission to consider these factors when acquiring energy under Maine’s renewable portfolio standard, a law that establishes the portion of electricity sold in the state that must be supplied by renewable energy resources.

Maine’s renewable portfolio standard (RPS) establishes the portion of electricity sold in the state that must be supplied by renewable energy resources.

With the passage of the new law, Maine joins other states like Connecticut, Illinois, New York and New Jersey that have recently passed strong labor and equity standards in the renewable energy sector.

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New York Appeals Court Confirms Construction Flaggers Must be Paid Prevailing Wages 

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NEW YORK, April 21, 2022 /PRNewswire/ — A New York appeals court ruled in favor of a class of flaggers who worked for Judlau Contracting Inc., a subsidiary of multi-billion dollar infrastructure contractor OHL Group. The court affirmed that Judlau flaggers who worked on New York public works projects since April 26, 2011 are entitled to recover prevailing wages. The flaggers are represented by Pelton Graham, an employment law firm with offices in New York and California.

This historic decision upholds the rights of not only the hundreds of flaggers who worked on Judlau public works projects but potentially thousands more New York flaggers who have been chronically underpaid. More information on this decision and its implications is available here: https://peltongraham.com/prevailing-wages-for-new-york-flaggers/.

Judlau flaggers worked on a variety of public works construction projects in New York City and upstate New York, including water main, sewer, and other utility repair and maintenance projects requiring street excavation. Even though they worked alongside union construction workers who received prevailing wages, flaggers were often paid just a few dollars over minimum wage rather than the union rate.

Pelton Graham has represented the flaggers since the case was first filed in New York Supreme court in 2017. Even though the flaggers were classified by Judlau as “pedestrian crossing guards,” the flaggers demonstrated that their main responsibility was protecting the safety of the public and construction crews near the job sites and, under the guidelines from the New York City Comptroller, they should be paid as construction laborers.

After years of litigation, the court ruled in favor of the flaggers, finding that the evidence clearly showed that Judlau flaggers worked as safety flaggers and for that reason were eligible for prevailing wages for all of their work performed on New York public works construction sites.

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