Singleton Calls for Crackdown on Employee Misclassification (NJ)

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November 13, 2019

Moorestown, NJ – Senator Troy Singleton today called on the Executive Branch of State Government to stop the rampant and widespread illegal abuse of workers in the construction industry through employee misclassification.

Companies who misclassify full-time workers as contractors commit wage theft by paying below minimum wage, establishing illegal work weeks, paying cash and evading taxes – all to increase profits. Senator Singleton called on the NJ Department of Labor, the Attorney General’s Office, the Department of Treasury, and the Governor’s Task Force on Misclassification, to continue to address this issue.

“Employee misclassification is a problem because when workers are misclassified as independent contractors by their employers, it not only diminishes their access to labor protections, but it also has real consequences on the State’s economy and tax revenues,” said Singleton. “Ensuring workers are treated fairly is a priority for me and while progress has been made when the Governor signed my Stop Work Order legislation, more needs to be done to protect workers and hold offenders accountable.”

Singleton was the prime sponsor of Senate Bill 2557, which concerns stop-work orders related to prevailing wage and construction worker employment. S2557 was signed into law in July 2019 and would permit the Commissioner of the Department of Labor and Workforce Development to issue a stop-work order against an employer upon determining that an employer has paid a worker less than the prevailing wage. The stop-work order would apply to every site where the violation continues to occur. It could only be lifted by the Commissioner if the Department finds the employer has agreed to pay future wages at the required rate, return any back-wages owed to workers and pay any penalty assessed by the Department.

“There must be a level playing field for all New Jersey workers,” continued Singleton. “As a devout supporter of the construction trades, I call on those in the Executive Branch of our state government to use all available resources to crack down on this unfair practice immediately.”

The William J. Hughes Center at Stockton University released a study that said approximately 35,000 workers are illegally misclassified as independent contractors, while the state is losing $25 million a year in tax revenue due to the fraud.

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New Jersey Is About to Take Another Step Towards Eliminating the Use of Independent Contractors by Providing Them with Benefits (NJ)

Posted by National Alliance for Fair Contracting on

October 30, 2019
J.D. Supra

Executive Summary: The New Jersey Legislature appears poised to pass S67, the Portable Benefits Act for Independent Contractors, in the upcoming lame-duck session. If passed, the Governor is expected to sign the bill before the end of the year. The bill doubles down the current administration’s effort to end misclassification of independent contractors by creating a financial disincentive to utilizing contractors. Though the intent of the bill seems to be directed at online companies such as Uber, Lyft, Amazon, Handy and others, the impact will affect any business that relies on contractors. The bill also appears to subtly create new opportunities for organized labor through the creation of “Qualified Benefit Providers.” At least half of the members of the Boards of these funds must be worker representatives or workers. Though not in its final form, it appears some form of this bill will soon become law.

Summary of Bill Provisions: In sum, the Bill requires any entity that utilizes 50 or more contractors in 12 consecutive months within the state of New Jersey to contribute funds to a Qualified Benefit Provider for the benefit of the independent contractors. The amount contributed must equal 25 percent of the contractor’s total fee or $6.00 per hour, prorated to ten cents per minute. Contributions must be made on no less than a monthly basis.

Contributions are made to Qualified Benefit Providers, who will create trust funds to provide contractors with workers’ compensation and other benefits, which are to be selected by the contractors. Qualified Benefit Providers may use up to five percent of the amounts collected to cover administrative costs. The New Jersey Department of Labor (NJDOL) will determine who may be a Qualified Benefit Provider utilizing the following criteria: 1) must be a nonprofit, 2) half the board must consist of workers or organizations representing workers, 3) board members may not have any interest in entities that utilize contract workers, 4) the organization must work toward maximizing benefits for workers, 5) the board has a fiduciary responsibility to the workers and 5) the organization must demonstrate adequate viability and financial sufficiency. These criteria seem to place organized labor in a prime position to be selected to run these new trust funds.
The bill only exempts four types of contractors: real estate agents; financial product salespersons; anyone subject to a collective bargaining agreement; or anyone who solicits orders as a sales representative of the principal entity. NJDOL will be responsible for monitoring, overseeing these new benefit providers, ensuring workers’ compensation insurance is provided, and establishing a fee to charge entities utilizing contractors to fund their efforts. Failure to comply with this Act may be enforced by either the NJDOL or a private right of action on behalf of the contractors.

Employers’ Bottom Line: Although it is unclear what the language of the final law will be, it is clear that New Jersey is aggressively attempting to eliminate reliance on independent contractors. We expect this legislation to become New Jersey law soon, which will substantially increase the cost of utilizing independent contractors within New Jersey.

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Sweeney Bill Would Protect Workers Against ‘Misclassification’ (NJ)

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November 14, 2019

Trenton – A bill authored by Senate President Steve Sweeney that would help protect workers from being exploited through their misclassification as independent contractors gained the approval of the Senate Labor Committee today.

“This is a pro-worker bill for the new gig economy,” said Senator Sweeney. “It will codify into law existing regulations and close a loophole that has allowed for the misclassification and exploitation of some employees. It’s all about protecting the rights of workers.”

A misclassification is the improper designation of workers as “independent contractors” rather than “employees” in order to allow employers to evade basic workers’ rights. Employers are required to contribute to unemployment and temporary disability insurance, abide by labor protections such as the minimum wage and overtime, allow employees to take maternity, paternity, and family leave, and withhold New Jersey income taxes – but they are not required to do the same for independent contractors.

“Misclassification not only hurts workers, it hurts law-abiding businesses and the state,” said Senator Sweeney. “The businesses that don’t play by the rules aren’t paying into the unemployment fund or the disability fund, which raises costs for workers and all other businesses. It shortchanges everyone else.”

Currently, the “ABC test,” adopted by the New Jersey Department of Workforce Development and affirmed by the New Jersey Supreme Court, is used to determine whether a worker should be classified as an employee or independent contractor for the purpose of labor and tax laws.

The bill would strengthen the “B prong” of the three-part test so that workers could not be deemed exempt from employee status because they perform their work “outside of all the places of business of the enterprise for which the service is performed.” It would also strengthen the “C prong” of the test by requiring that work performed to meet this standard is in an independently established trade, occupation, profession, or business in which the individual providing the service is customarily engaged.

The bill, S-4204, was approved with a vote of 3 – 1.

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Responsible Bidder Requirements OK’d (NJ)

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By Vince Conti
Nov 9, 2019

COURT HOUSE – Long ordinance drafts filled with legal language and dealing with issues of contract performance do not generally gain the attention of many citizens, even though they may provide important protections for the taxpayer.

That was the case Nov. 4, when Middle Township Committee held the second reading and public hearing on an ordinance that establishes “responsible bidder” requirements for municipal contracts. No one spoke at the hearing, and the ordinance was adopted unanimously.

The bidder requirements protect the municipality from situations where it might have been required to accept a low bid on a contact from a firm that could not satisfactorily complete the contract.

The ordinance lays out bidder requirements that speak to a potential contractor’s compliance with federal, state, and county laws, adequate insurance coverage, satisfactory past performance, a record of conformity with environmental and other laws, skilled workforce levels, and other factors.

Having the ordinance in place lessens the chance that a municipal action to justifiably bypass a low bid would be overturned in court.

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State agencies help workers fight wage theft, know their rights (NJ)

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By Michael Hill, Correspondent
November 8, 2019, 3PM EST

For many New Jersey workers, wage theft, discrimination, sexual misconduct and more are all-too-common workplace realities. That’s why the Department of Community Affairs and the Attorney General’s office are equipping workers with knowledge of their rights through a series of wage theft clinics across the state.

The target audience of one clinic in Atlantic City was immigrant communities, who are especially fearful about “… coming forward to the department to express their rights,” according to NJ Department of Labor & Workforce Development Commissioner Robert Asaro-Angelo, who spoke to attendees in Spanish.

The Hispanic Association of Atlantic County encouraged the state to hold the clinic, and it reached out to Latinx workers, but only a handful came.

“Obviously, to come out to settings like this, maybe the fear is too great for them to come out,” said Bert Lopez, the association’s president.

Those that did come got a step-by-step lesson in filing a complaint with the state department and some advice about proving wage theft.

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Workers owed $105K in back pay on Las Vegas Strip bollards project (NV)

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By Shea Johnson
Las Vegas Review-Journal
December 6, 2019 – 5:30 pm

A Las Vegas construction company that installed bollards on the Strip owes more than $105,000 in wages to workers it underpaid and cannot hold a public works contract for three years, a state agency ruled.

Muller Construction must also pay $56,000 in administrative penalties after losing its appeal to the April decision by the Nevada Office of the Labor Commissioner, agency spokeswoman Teri Williams confirmed Friday.

The office’s ruling Wednesday followed an administrative hearing in October, where Muller Construction objected to the agency’s findings that it failed to pay prevailing wage to 28 workers.

Those workers fabricated bollards in the company’s work yard, which should have been deemed a public works site subject to prevailing wage, the agency said.

Muller Construction was awarded a $5 million county contract in June 2017 to install on the Strip hundreds of bollards, the four-foot steel posts rooted into sidewalks to protect pedestrians from vehicles.

Robert Kern, an attorney representing the company, said he believed evidence presented to the agency established the yard was used for multiple public and private projects, meaning it did not fit the definition of a public works site.

“I can’t quite grasp the logic of it,” he said about the decision.

Kern said he planned to appeal the decision to state court and seek to delay the ruling’s enforcement.

One worker was ordered to be paid more than $19,000, according to Tommy White, a laborers union leader and chairman of the Nevada Foundation for Fair Contracting. It’s the nonprofit labor management watchdog whose complaint to the agency sparked the investigation.

“It looks like it will be a nice Christmas for all those workers,” White said, adding they deserved the money to which they are entitled.

The company was originally ordered by the Office of the Labor Commissioner to pay more than $92,000 in back wages and $130,000 in penalties. But the decision was modified Wednesday, Williams said.

Muller Construction has accused Laborers Local 872, the union where White is business manager and secretary-treasurer, of defamation over the matter. The lawsuit filed in January 2018 in Clark County District Court remains unresolved, court records show.
The company had completed 10 other county public works projects since 2015 without a prevailing wage violation, according to the county.

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De Blasio legislation expands prevailing wage (NY)

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Stephon Johnson | 12/12/2019, 3:20 p.m.

New York City Mayor Bill de Blasio signed a bill that will expand guaranteed prevailing wages to building service workers.

“It is really a good example of doing something that will change and improve the lives of working people and at the same time allow us to keep building on the central goal of making this a city that working people can afford,” said de Blasio during a news conference for the bill’s signing. “And we are committed to our long term vision on affordable housing and appreciate how much our colleagues in labor and the unions involved here but also beyond have been supportive throughout of our larger goals on affordable housing.”

The Intro-1321 A legislation makes sure the prevailing wage for building service workers reflects and builds off of wage and benefits reforms aimed at reducing income inequality that include paid sick leave, fair work week and raising the minimum wage.

According to the city, since 2012, prevailing wages were required for building service employees in most developments where a private developer received at least $1 million in discretionary financial assistance from City Hall. But the law exempted affordable housing projects from the wage standard.

The sponsor of Intro. 1321-C, New York City Council Member Rafael Espinal, said that workers’ wages should coincide with the cost of living.

“As our city becomes a more expensive place to live, we have to push for laws that close its wealth gap,” stated Espinal. “The city is also facing a housing crisis that has to be addressed not just by looking at how much affordable housing is available, but by examining what kind of jobs are available as well.

“I introduced this prevailing wage law because it is the standard we set during the East New York Neighborhood Plan,” continued Espinal. “Of the 100% affordable housing that is being built, each building is now going to provide prevailing wages to its staff. If we did it in East New York, we can do it citywide.”

The bill covers additional developers and projects via removing the current exemption in the Prevailing Wage Law for affordable housing projects and not-for-profit developers of residential projects. Currently, building service employees in most residential projects that receive at least $1 million in financial assistance for new construction or preservation will be guaranteed the prevailing wage.

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Council OKs better pay for workers at subsidized developments (NY)

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WILL BREDDERMAN
November 14, 2019 03:39 PM

The business of affordable housing is about to get more expensive.

The City Council voted Thursday to obligate below-market housing developments that receive $1 million or more in city assistance pay prevailing wage to the staff members who maintain the structures and tend to tenant needs.

The bill’s passage marks a victory for building service workers union 32BJ SEIU and a defeat for the industry groups that argued the proposal would have a “crippling” effect on the construction of low-cost apartments.

Brooklyn Councilman Rafael Espinal’s legislation exempts affordable complexes where at least 50% of tenants are formerly homeless, disabled or receiving on-site social or health services, as well as smaller buildings and projects where the city has invested to preserve rather than construct below-market units.

Espinal insisted that his bill is a necessary component of keeping New Yorkers from being priced out of the five boroughs.

“This crisis has to be addressed not just by looking at how much affordable housing is available but also looking at what kind of jobs are available,” he said.

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Taking workforce development to school (OR)

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By Josh Kulla
10/24/19

Contractors in the Portland-metro area are continuing to address the skilled labor shortage by reaching out to educators. Walsh Construction, for example, is helping Benson Polytechnic High School build up its construction technology program.

Last year, Walsh employees spent time in the Benson woodshop to give students hands-on carpentry construction. This year, expansion has allowed instructors to take better advantage of Carpenters International Training Fund (CITF) curriculum. And from a pair of half-full woodworking classes a year ago, the construction technology program has grown to around 100 enrollees – approximately 10 percent of the Benson student body – engaging in classes that could lead them to careers in the skilled trades.

Participants in the two-year program take courses focusing on construction industry soft skills and preliminary hard skills they can use to eventually learn a trade or even go into project management. Students even are taught how to use 3-D modeling software.

“We’ve dramatically changed in the sense of participation,” said Benson woodworking instructor Dave Ketah, a former design professional. “We started the new elective woodworking, and last year was my first year on staff here, so on some level there is new direction for our department. We have gained some really good, new strategy; we have the partnership with Walsh and we’re amplifying our participation and our coverage of the curriculum we use from CITF.”

All told, students who participate in woodworking all year will have taken enough CITF coursework to earn pre-apprenticeship level 3 status, Ketah said. They will have soft skills and building skills needed to qualify for an apprenticeship with their local carpenters union – in this case, United Brotherhood of Carpenters Local 1503 of Oregon City.

A few of Ketah’s former students already are making their way into the industry.

“The results are that we have had students in our partnership with the (Pacific Northwest Carpenters Institute) entered into an apprenticeship,” he said. “We had a visit from a student last month who graduated last year and he told us about it. He got some credit for this stuff here and for doing the PNCI construction camp. He got pre-apprenticeship credits that put him as a second-term apprentice.”

Someone following that same path, Ketah said, could earn as much as $80,000 annually after reaching journeyman status at age 22.

“We’re able to tell that story to our students as we recruit them to come into our program,” he said.

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Nashville schools to enact stricter rules after wage theft allegations against subcontractor (TN)

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Published 6:51 p.m. CT
Dec. 10, 2019

Nashville public schools will require thorough documentation of work done on its construction projects after a group of concrete workers recently alleged wage theft against a district subcontractor.

“Going forward, the facilities and construction department will require contractors and all subcontractors have written contracts for work being performed,” said Metro Nashville Public Schools Interim Superintendent Adrienne Battle during a Tuesday night board meeting. “That way, if there is a wage theft claim or payment dispute in the future, there will be more documentation to help get to the bottom of the situation.”

The change comes after allegations that Nashville’s Orion Building Company subcontracted with Joe Haas Construction, which in turn hired the concrete company – RSA Concrete – for cement work at McMurray Middle School.
Workers said the concrete company was never paid $43,000 for work by the subcontractor and are alleging wage theft.

A similar incident occurred during work on a Vanderbilt University building, the group said, and the school placed pressure on the contractor to ensure payment.

Nashville schools has paid its contractual obligations to Orion and district staff have facilitated a meeting to resolve the issue. Battle said another meeting is forthcoming.

“Normally, contractual disputes like this will be settled by mediators or courts, but we are trying to facilitate a productive path forward towards a quick resolution,” Battle said.

Last month, Workers’ Dignity asked the district to ensure contractors require bonds to ensure payment for work at a site. Nashville public schools, Battle said, already requires bonds that ensure payment for work being performed.

The change will require more overall documentation. Workers’ Dignity Interim Co-Director Jack Willey said to the board that he wants the documentation process to be as simple as possible to ensure its effectiveness for all workers.

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