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Hennepin County Attorney announces charges of insurance fraud and theft by swindle against former owners of Merit Drywall (MN)

Posted by National Alliance for Fair Contracting on

January 21, 2020

Today, the Hennepin County Attorney announced charges of insurance fraud and theft by swindle against the former owners of Merit Drywall. According to the criminal complaint, the two defendants, Leroy and Joyce Mehr, misclassified workers as independent contractors to avoid paying more than $300,000 in workers compensation insurance premiums.

“Wage theft, insurance fraud and worker classification fraud have no place in Minnesota. It is critical that the legal system hold those who are accused of these crimes against construction workers accountable,” said Jessica Looman, Executive Director of the Minnesota Building and Construction Trades Council, an advocate for Minnesota’s union construction industry. “We want to thank the Hennepin County Attorneys office, the Minnesota Department of Commerce Fraud Bureau, and the Building Trades Unions in our state for protecting workers and our industry.”

“The case against the former owners of Merit Drywall shows the strength of the construction community when we stand together and demand action when workers complain of wage theft and worker misclassification,” said Dan McConnell, Business Manager of the Minneapolis Building and Construction Trades Council. “Our members have lost their patience with those developers and general contractors who have profited from schemes like the one alleged here. Together, the Building Trades Unions will do everything we can to continue to assist in ensuring that those who are complicit in the exploitation of workers are held accountable.”

Minnesota’s Building Trades Unions have launched an initiative to combat wage theft, exploitation, and labor trafficking which poses a growing threat to the welfare of immigrant workers and the health of the state’s construction industry. The “Not On My Watch” or “Ya No Mas” campaign enlists union members in efforts to identify cases of abuse, and to assist exploited construction workers on Minnesota jobsites.

The Minnesota and Minneapolis Building and Construction Trades Councils will continue to support efforts to protect all Minnesota construction workers. #notonmywatch.

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Amherst councilors propose bylaws to enforce wage, labor laws (NH)

Posted by National Alliance for Fair Contracting on

By SCOTT MERZBACH
Published: 2/25/2020

AMHERST – The Town Council is considering a package of bylaws that would give Amherst officials some oversight in making sure workers are getting minimum wage and that other labor laws are being followed, such as workers being paid appropriately for overtime work and receiving tips.

Collectively known as wage theft bylaws, the proposal is being brought forward by District 1 Councilor Cathy Schoen, District 2 Councilor Pat DeAngelis and At Large Councilor Mandi Jo Hanneke, and would bring Amherst in line with Northampton, Easthampton, Springfield, Cambridge, and other communities that have adopted similar bylaws and ordinances.

The first, known as the responsible employer bylaw, would mandate that the town award contracts only to companies following the laws, Hanneke said. It would require any contractor to certify, in writing, that they are in compliance with wage, hour and benefits laws, and have not had violations for the past five years.

The second, the tax incentive or tax relief bylaw, would mean such agreements, under the purview of the Town Council, can be granted only to businesses that follow the bylaw. The bylaw would also have provisions for rescinding or reducing tax incentives.

The third, the wage and tip bylaw, applies to the service industry and offers the potential for fines or possible license loss if workers are not paid appropriately. The bylaw would also create a Wage Theft Advisory Committee that includes members of the Licensing Commission, Human Rights Commission, Amherst Area Chamber of Commerce and Pioneer Valley Workers Center. In addition, the bylaw would require the posting of rights in all establishments and information on how to report a violation or file a complaint.

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New Jersey DOL cites, fines Katerra sub for wage violations (NJ)

Posted by National Alliance for Fair Contracting on

AUTHOR: Kim Slowey
PUBLISHED: Feb. 18, 2020

Dive Brief:

  • The New Jersey Department of Labor & Workforce Development (NJDOL) has issued a stop-work order to subcontractor REB Construction and Maintenance LLC for failure to take the proper deductions from its employees’ pay and for not keeping the required payroll records related to work performed on a project in Jersey City, New Jersey. The department also fined REB $19,250. …
  • The authority that the NJDOL has to stop work on a construction project when significant pay, benefits or other workers’ rights violations are documented is part of new legislation based on the July 2019 recommendations of New Jersey Gov. Phil Murphy’s task force on employee missclassification.

Dive Insight: …

Stop-work orders (A5838): The NJDOL can force an employer to stop work if it determines that the employer violated state wage, benefit or tax laws.

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U.S. DEPARTMENT OF LABOR AND NEW MEXICO DEPARTMENT OF WORKFORCE SOLUTIONS PARTNER TO PROTECT THE STATE’S WORKFORCE AND ENFORCE WAGE LAWS (NM)

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: February 11, 2020
Release Number: 20-21-DAL

ALBUQUERQUE, NM – The U.S. Department of Labor and the New Mexico Department of Workforce Solutions have signed a Memorandum of Understanding (MOU) to expand and improve the protection of New Mexico’s workforce, strengthen enforcement of wage laws and level the playing field for responsible employers.

The MOU will allow both organizations to work together to protect employee rights, defend law-abiding employers against unfair competition and maximize taxpayer resources.

“This agreement will help us better protect New Mexico’s workers and help the state’s employers understand wage laws and avoid costly non-compliance,” said Wage and Hour Division District Director Evelyn Sanchez in Albuquerque, New Mexico. “Working together, we can more effectively identify those employers that deliberately attempt to unfairly gain a competitive advantage over those that comply with the law.”

The agreement will help both agencies communicate and cooperate more effectively and efficiently in areas of common interest, including cross training staff and providing employers and employees with information about the law. By doing so, the two organizations seek to protect the wages, safety and health of America’s workforce.

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Column: Wage theft is prevalent, cheats workers in Ohio (OH)

Posted by National Alliance for Fair Contracting on

January 31, 2020

Too many bosses in the Columbus area and throughout Ohio are finding ways to cheat their hard-working employees. It’s called wage theft. These unethical employers steal money from workers and make it harder for law-abiding employers to compete.

Here are some of their methods: paying less than the minimum wage; not paying overtime; violating prevailing wage laws on public construction projects; confiscating tips from restaurant wait staff; misclassifying regular employees as self-employed independent contractors; forcing employees to work off-the-clock before and after their regular shifts; and denying workers legal meal breaks. The list of unscrupulous practices is almost endless. …

Mayor Andrew J. Ginther and the Columbus City Council have recognized the problem here. They are considering legislation aimed at curbing wage theft by any developer who receives a tax abatement or other tax incentive. If enacted, this legislation would be a good first step in combating abuses. Four years ago, Cincinnati enacted a similar ordinance. Franklin County suburbs should follow suit.

Central Ohio’s overall economy is healthy and growing. However, not everyone is benefiting. Too many folks are being left behind, forced to work two or three jobs to make ends meet. Dishonest wage-theft violators know this. They prey on the most vulnerable of our fellow citizens.

These crooked employers should be held accountable. Our elected officials and business leaders should tell repeat offenders either comply with the law or get out of central Ohio. We don’t need you and your abusive practices.

Mark Fluharty is executive director of the Central Ohio Labor Council of the AFL-CIO.

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Union volunteers help enforce laws against construction wage theft on Multnomah County projects (OR)

Posted by National Alliance for Fair Contracting on

Feb 18, 2020
By Don McIntosh

In the fight against wage theft, the volunteer cavalry has begun to arrive. On Jan. 21, the Multnomah County Commission heard a first report back about a pilot program in which union and community volunteers help County officials police construction work sites to make sure public works contractors are obeying labor laws, such as paying prevailing wage and overtime, not exceeding the mandated apprentice-to-journeyman ratio, and not misclassifying construction workers into lower-paid job classifications.

There are 13 volunteers so far, mostly business representatives from local building trades unions. … Volunteers also get ID badges authorizing them to visit construction work sites, where they speak with workers about conditions-to make sure they match up with what their employers are reporting. Any violations are reported to the Oregon Bureau of Labor and Industries for enforcement.

“Access to the workers is the biggest thing,” said Sheet Metal Workers Local 16 organizer Brian Noble. “They usually don’t know that the company could be stealing money from them. By talking to them, we can find out.”

The first batch of volunteers was trained last August. So far the program includes volunteers from the Sheet Metal, Painters, Carpenters, Operators, Ironworkers, Glaziers, and Bricklayers unions. The software launched Oct. 1. Site visits began later that month. The program is modeled on a similar program used by the Los Angeles Unified School District. …

County commissioners last May approved temporary funding for the pilot program. After hearing the Jan. 21 progress report, commissioners voiced support for making the program ongoing when County Chair Deb Kafoury submits her next proposed budget in April. …

Commissioner Lori Stegman said she’d like to see the program go statewide.
“The term ‘wage theft’ doesn’t really cover it. This is exploitation,” added Commissioner Susheela Jayapal.

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OAG Brings Criminal Charges Against Company, Owner for Wage Violations (PA)

Posted by National Alliance for Fair Contracting on

By Christopher D. Carusone, Steven M. Williams and
Carl L. Engel | January 14, 2020 at 12:50 PM

Employers in Pennsylvania should stay on their toes as the Pennsylvania attorney general (AG) announced charges against a major mechanical contractor engaged in numerous public works projects for crimes arising from a prevailing wage dispute. This marks the first time that the attorney general has brought criminal charges for prevailing wage violations, which was previously enforced only through civil actions. …

Although the new crime called “prevailing wage theft” has not been created in Pennsylvania, the attorney general charges that Good and Goodco violated existing criminal statutes prohibiting deceptive or fraudulent business practices, theft by unlawful taking, theft by deception and other related crimes. While the Office of the Attorney General (OAG) historically has enforced prevailing wage laws through civil action, the charges against Goodco mark the first time that the OAG has sought to enforce them with criminal penalties. Cases of this nature are being prioritized by the OAG’s recently formed fair labor section. When Shapiro ran for AG in 2016, he pledged to create a unit that would “enforce Pennsylvania’s labor laws in partnership with the Department of Labor & Industry and the Pennsylvania Human Relations Commission,” among other pro-worker actions. Accordingly, the fair labor section has made a mission of fighting wage theft, tip stealing, worker misclassification and workplace discrimination.

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Report: Construction Workers Frequently Denied Compensation Coverage (TN)

Posted by National Alliance for Fair Contracting on

Labor brokers are putting workers at risk to avoid paying insurance premiums

By Alejandro Ramirez
Feb 12, 2020

A new report from the Tennessee Bureau of Workers’ Compensation Compliance Program highlights how construction companies and subcontractors are misclassifying workers to avoid paying workers’ compensation. The report details several other practices rampant in the construction industry that deny protections to workers and give noncompliant businesses a financial edge when it comes to securing contracts.

These practices put workers at risk. If workers are injured on the job, for instance, there’s a chance their employers won’t compensate them because they’re listed as independent contractors rather than as employees. Noncompliance also costs the state tax dollars, though the amount of dollars owed is difficult to pin down, especially when employers try to hide information from assessors.

“It’s sort of like an iceberg,” says Amanda Terry, the bureau’s director of compliance. “What we believe that we’re seeing is only 10 percent – the part that’s above the surface.”

The state collects 4.4 percent on workers’ compensation premiums, and the report says that in 2016, insurance carriers may have lost as much as $296 million.

The report says many employers also hire workers through subcontractors known as labor brokers, which frequently misclassify employees. Contractors hire these brokers, who in turn provide workers for a construction site. Many of these brokers have also been accused of wage theft and other compliance issues.

“We find that … when an employer is doing the wrong thing with their workers’ comp, they’re generally doing the wrong thing across the board,” says Terry.

These practices give labor brokers an unfair advantage. Victor White, director at Mid-South Carpenters Regional Council, a union representing carpenters, tells the Scene that a law-abiding contractor “walks in the door at a 20 percent disadvantage” compared to noncompliant businesses when it comes to bidding on contracts.

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Nashville is being built on a pyramid of payroll tax fraud | Opinion (TN)

Posted by National Alliance for Fair Contracting on

According to some estimates, $2.6 billion in payroll tax fraud is lost annually, while Nashville construction projects add up to more than $2 billion.

Victor White, Guest columnist
Dec. 30, 2019

In November, a seldom-covered but far too common crime surfaced in Nashville’s news media: the case of wage theft at a Metro Nashville Public Schools-funded construction site.

A subcontractor working on the project allegedly refused to pay a local group of concrete workers, robbing them of $43,000 in wages for their work at a local school. These laborers have been calling attention to the theft for weeks and finally brought their case to MNPS at a school board meeting.

Members of the Southeastern Carpenters Regional Council were proud to stand with our brothers fighting for fair wages at the meeting, but the problems we face in the construction industry go well beyond one case of wage theft in Nashville.

Fraud is rampant across construction industry

The construction industry today is fundamentally built to allow rampant payroll tax fraud, wage theft, workers’ compensation premium fraud and worker misclassification. At each construction site a general contractor hires a subcontractor to manage different jobs: laying drywall, putting down concrete, or installing plumbing and lighting. Each of those subcontractors hires a labor broker to recruit a team of workers to get the job done. Each subcontractor competes for bids, promising they can get the job done for the least amount of money.

Many subcontractors recruit labor brokers they know will cut corners and trim costs. Sometimes, as in the case of the concrete workers, the subcontractor will fail to pay laborers and outright steal their wages. Other times subcontractors will classify workers as independent contractors, committing payroll tax fraud by avoiding paying taxes on their employees. These schemes cause law-abiding construction employers to suffer as they are underbid by rivals who keep costs down through breaking the law. …

Beyond the rampant fraud that is allowed to continue, the lack of oversight and regulation on construction sites in Nashville led to the largest rise in construction-related deaths over a 2-year period than any time in the last 30 years.

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Governor and lawmakers seek penalties against dishonest construction industry employers (TN)

Posted by National Alliance for Fair Contracting on

Posted: 11:58 AM, Feb 25, 2020
By Ben Hall

NASHVILLE, Tenn. (WTVF) – The state is looking to crack down on dishonest employers in the construction industry.

Governor Bill Lee has proposed a bill (SB 2189) that would penalize employers who misclassify workers as independent contractors to avoid paying workers compensation insurance and then change their company name in order to avoid paying fines after they are caught.

Senator Sara Kyle (D – Memphis) has proposed a bill (SB 2404) that would shut down construction sites when employers do not immediately cooperate with state investigators.

The bills follow a NewsChannel 5 investigation which showed the dark side of Nashville’s building boom.

Some employers cheat workers out of overtime pay and cheat taxpayers out of millions of dollars by not paying for workers’ compensation insurance.

“The dishonest ones, we need to run out of the state of Tennessee,” Senator Kyle said.
Governor Lee’s proposal is sponsored by the Republican leaders of the House and Senate.

“We’re thrilled,” said Victor White with the Carpenter’s Union. “It’s a pure pleasure to see this isn’t partisan. The bills are being submitted from both sides of the aisle.”

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