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Construction ‘Coyotes’ costing Utah taxpayers millions (UT)

Posted by National Alliance for Fair Contracting on

NOVEMBER 18, 2019
BY ADAM HERBETS

SALT LAKE CITY – It’s an illegal business practice that most people in the construction industry consider an open secret: “coyotes” smuggling people into the workforce.

It’s a problem one state senator describes as a “robbery” of our tax dollars on some of the biggest construction sites across Utah.

FOX 13 News has discovered hundreds of employees are being paid in cash under the table on a weekly basis instead of paying taxes.

Patrick Bieker, the lead union representative with the Southwest Regional Council of Carpenters in Utah, has been fighting for stricter regulations against anyone who encourages employees to work for cash.

“We refer to them as ‘coyotes,’ or labor brokers,” Bieker said. “They typically use fear to keep their workforce in line.”

According to the Southwest Regional Council of Carpenters, the manpower on most job sites does not come from the general contractor – or even the subcontractors. Instead, they say it comes from coyotes who help the subcontractors limit the amount of fees they pay per employee.

“They don’t pay the workers comp, the unemployment insurance, state and federal taxes. You know, any of the burden that a responsible contractor pays,” Bieker said. “It’s just a constant race to the bottom. Let’s make sure everybody’s getting screwed!”

Workers turn on their coyote… and blame the subcontractors who led them there
Since he learned of the problem, Bieker has hired a number of anonymous informants who work on large job sites across the state. They take pictures of their payments every week, typically large sums of cash handed to them in an envelope inside small office buildings across Salt Lake City.

One of the workers told FOX 13 he has been a legal resident in the United States since 1999. He said he has a green card, but when he tried to get a job with a local subcontractor, the company told him to call a man named Sergio Coronado instead.

“The first payment, envelope, cash. It was like three months, two months and a half I think,” the worker said. “I wanted to pay my taxes, you know?”

(Read More)

Feds: Construction Company Imported H-2B Foreign Workers to Pay Low Wages (SD)

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A South Dakota construction company imported foreign workers on the H-2B visa program in order to cut costs and pay lower wages, Labor Department officials say.

By John Binder
Oct. 21, 2019

Every year, U.S. companies are allowed to import 66,000 low-skilled H-2B foreign workers to take blue-collar, non-agricultural jobs. For some time, the H-2B visa program has been used by businesses to bring in cheaper foreign workers and has contributed to blue-collar Americans having their wages undercut.

Dagel Steel Construction, based in Florence, South Dakota, violated federal law by recruiting H-2B foreign workers from South Africa and Mexico to take jobs in the United States only to pay them below-market wages, according to the Labor Department.

The construction company paid H-2B foreign workers low wages, assigned them to work in locations not authorized by the Labor Department, to work jobs outside of the workers’ job descriptions, as well as failing to pay for the workers’ housing costs, visa fees, transportation costs. The company deducted money from the workers’ already low wages.
Labor Department official Betty Campbell said in a statement:

The U.S. Department of Labor sought debarment of Dagel Steel Construction because the employer failed to comply with well-documented requirements of the H-2B Visa Program. The employer’s obligations are clearly detailed during the process of seeking certification to hire temporary foreign laborers.

Now, Dagel Steel Construction will be banned from importing foreign workers through the various H visa programs for five years and must pay nearly $70,000 in back wages to 16 H-2B foreign workers. The company also must pay more than $30,000 in civil penalties.

For nearly three years, President Trump’s Department of Homeland Security (DHS) has routinely expanded the number of H-2B foreign workers that businesses are allowed to import to take blue-collar U.S. jobs. In May, for example, Acting DHS Secretary Kevin McAleenan approved an additional 30,000 H-2B foreign workers for businesses to import.

(See Article)

Union accuses contractors, owners of Amazon buildings of labor violations (VA)

Posted by National Alliance for Fair Contracting on

By Patricia Sullivan
Dec. 12, 2019 at 2:10 p.m. EST

A union is charging that employers at six construction projects that will house Amazon employees or operations in Northern Virginia have evaded federal and state taxes by misclassifying workers, failing to carry workers’ compensation coverage and avoiding overtime pay.

In a 24-page report based on its own investigation, the Eastern Atlantic States Regional Council of Carpenters alleges multiple violations of federal labor law by general contractors, subcontractors and labor brokers who supply workers for projects owned and managed by four development companies and intended for Amazon.

(Amazon founder and chief executive Jeff Bezos owns The Washington Post.)

If true, the allegations would raise the profile of the issue of labor law violations in Virginia, a right-to-work state, just as Amazon is seeking approval before the Arlington County Board for building its own headquarters on property it has purchased in the Pentagon City neighborhood.

The board is scheduled to vote on that proposal on Saturday.

JBG Smith Properties, which owns three of the six properties that the union cites, said in a statement Thursday that it cannot respond to specific claims since it has not seen the union’s report.

“That said, when JBG Smith is made aware of these types of claims, it works closely with its general contracting partners to ensure they are rectified,” the statement said.

Owners of the other locations could not be reached for comment.

Three of the structures under renovation are temporary space for Amazon employees in Arlington until their permanent headquarters is built. A warehouse in Springfield and data centers in Manassas and Sterling are also cited.

(Read More)

Time to undo prevailing wage debacle [Opinion] (WV)

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By Rick Wilson
Nov 5, 2019

In 2016, the West Virginia Legislature repealed the state’s prevailing wage law, which set pay standards for workers on public construction projects.

The intent of prevailing wage laws was to prevent these projects from turning into a race to the bottom, with out-of-state contractors profiting at the public expense by underbidding local businesses and importing low wage, low skill workers laboring under unsafe conditions.

The idea for that kind of legislation didn’t come from a bunch of labor radicals. Rather it was the brainchild of two Republican U.S. senators, James J. Davis of Pennsylvania and Robert L. Bacon of Long Island, New York.

In 1927, Bacon was angered to learn that an Alabama contractor won a bid to build a veteran’s hospital in his district, bringing in poorly treated workers to do the job. In his words, they were “herded onto this job, they were housed in shacks, they were paid a very low wage, and … it seems to me that the federal government should not engage in construction work in any state and undermine the labor conditions and the labor wages paid in that state.”

In his view, setting locally based wage standards for public projects would ensure fairness and allow local and distant contractors to compete for bids on an equal basis.
Davis believed that the government had a responsibility to “comply with the local standards of wages and labor prevailing in the locality where the building construction is to take place.”

Their legislation, known as the Davis-Bacon Act, was passed in congress in 1931 and became the model for state prevailing wage laws, including the one that used to protect West Virginia’s workers and contractors.

Opponents of the legislation, who, as far as I can tell, are also opponents of working people generally, argued that repealing the legislation would save taxpayers money.
For example, Senate Finance Committee Chairman Craig Blair, R-Berkeley, argued at the time that “without prevailing wage, you could build five schools for the price of three.” He also claimed that the repeal would save the state $200-300 million annually.

If that really happened, the state would have a huge budget surplus. Instead, the governor has ordered $100 million in cuts due to a budget shortfall.

And the School Building Authority reported in 2017 that, while workers’ wages had gone down on school projects since repealing prevailing wage, “the overall cost of school construction does not reflect a reduction of overall construction costs on SBA projects at this time. At this time the SBA is not realizing an overall savings that would allow for the construction of ‘five new schools for the price of three,’ as some have previously claimed.”
What did go down were the inflation-adjusted wages of carpenters, electricians and operating engineers.

(Read More)

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Report: Labor cites 526 Jobs Act violations, imposes $106,450 of fines (WV)

Posted by National Alliance for Fair Contracting on

By Phil Kabler
10/23/19

CHARLESTON – In the 2018-19 budget year, the Division of Labor cited 526 violations of the Jobs Act, fining contractors a total of $106,450, according to a report to the West Virginia Legislature.

Enacted in 2001, the Jobs Act is intended to assure that 75% of jobs on state-funded public works projects go to local workers. It authorizes the Division of Labor to impose fines of up to $100 a day on employers who knowingly violate the act.

A legislative audit released in June concluded that the Jobs Act has been largely ineffective, in part because in order to comply with federal law, local markets were defined to include out-of-state counties that are within 50 miles of the West Virginia line.

The audit found that means workers residing in 150 counties surrounding West Virginia, with a total population of 17.3 million people, are considered part of the local market area. The local market includes the major metropolitan areas of Pittsburgh and Washington, D.C.

“In terms of general population, West Virginia makes up 9.5% of the local labor market,” the audit noted.

The audit also concluded that the Division of Labor receives no additional funding for Jobs Act compliance, and relies on 18 inspectors statewide to enforce the act – along with multiple other regulations that the inspectors enforce.

According to the report to the Legislature, Labor inspectors conducted 338 Jobs Act field inspections in 2018-19 and reviewed employment and payroll records for 1,943 construction projects.

While the majority of projects in the report were listed as in compliance with the Jobs Act, contractors and projects cited as being out of compliance were:

-S&D Industrial Painting of Tarpon Springs, Florida, six citations on a Division of Highways project in Nicholas County.
-HVB ICF Contractors of Gay Mills, Wisconsin, on a Mercer County Board of Education project.
-Southern Trades of Louisville, Kentucky, on a Doddridge County Board of Education project.
-Bonsai Design of Grand Junction, Colorado, on a Division of Natural Resources project in Summers County.
-KVK Contractors of Tarpon Springs, Florida, on a West Virginia Parkways project in Kanawha County.
-Oglesby Construction of Norwalk, Ohio, on a West Virginia Parkways project in Mercer County.

Additionally, 20 employers requested 353 Jobs Act waivers and were granted waivers for 341 workers.

(Read More)

Labor leader says square footage increase shows prevailing wage repeal hasn’t worked (WV)

Posted by National Alliance for Fair Contracting on

By Jeff Jenkins in News
November 10, 2019 at 4:11PM

CHARLESTON, W.Va. –

School superintendents from dozens of counties will appear before the state School Building Authority next week in hopes of convincing the SBA to fund their school construction projects in the latest round of “Needs” grants. A recent move by the SBA will allow some of those counties to seek more money for their projects.

The SBA last week approved a 20 percent increase in allowable square footage costs for new school construction.

“We’re seeing trends in square foot costs that affect all projects so we thought it was prudent for us to raise the maximum amount a county could request up to 20 percent higher,” SBA Director of Architectural Services Ben Ashley said.

A West Virginia labor leader said the increase is further proof the the legislature’s decision to repeal the state’s Prevailing Wage law in 2016 hasn’t worked.

“It’s true that costs have gone up but it’s kind of surprising that with the repeal of prevailing wage they are recognizing this,” West Virginia Affiliated Construction Trades Foundation Director Steve White recently told MetroNews. “You get what you pay for and the school systems are finding out when low-wage labor is used it’s causing all sorts of problems and costing them more.”

In 2016 the Republican-led legislature wiped out the long-held practice in West Virginia where the government surveys contractors to determine the minimum level of pay for a variety of classifications of jobs on state-funded projects, such as schools.

Supporters of prevailing wage argued prevailing wage provided a living wage for workers, while keeping out-of-state contractors from undercutting West Virginia construction companies and workers. Those favoring the repeal said the state overpaid millions of dollars for projects with the flawed survey system.

(Read More)

Illinois law promoting diversity in construction set to take effect (IL)

Posted by National Alliance for Fair Contracting on

Posted by Adam Redling
December 30, 2019

Illinois Governor J.B. Pritzker signed Illinois Works Jobs Program legislation Dec. 10 to strengthen a pillar of the state’s Rebuild Illinois initiative and increase diversity in apprenticeships for construction and the building trades. Senate Bill 177 takes effect Jan. 1, 2020.

Rebuild Illinois is a $45 billion capital program designed to improve the state’s infrastructure and provide resources to those in the building profession.

The Illinois Works Jobs Program will help ensure that Illinois residents from all communities not only benefit from capital projects, but also have access to careers in the construction industry and building trades.

The law encompasses a $25 million investment and works through community-based organizations. These organizations will help recruit new apprentices to work on construction projects and sets strong apprentice participation goals of 10 percent on public works projects. Through this pre-apprenticeship program, bid credit program and review panel, the new law is designed to help ensure the Illinois Works Jobs Program can build and maintain a diverse workforce on Rebuild Illinois projects.

“Rebuild Illinois is the largest, most robust capital plan in state history. We’re working with our partners to make sure every community in the state benefits from these good jobs-especially those who have been left out for far too long,” Pritzker says. “We’re putting Illinois’ government back on the side of working families, designing a state that is economically prosperous not just for the few, but for every Illinoisan, no matter the color of their skin or their ZIP code.”

(Read More)

SAVE THE DATE – 22nd NAFC National Conference, September 20-22, 2020 – Chicago, IL

Posted by National Alliance for Fair Contracting on

November 2019

Just announced! NAFC’s 22nd National Conference will be held on Sept. 20-22, 2020, in Chicago, Illinois, at the Palmer House Hotel. Please save the date and ensure to join NAFC members and affiliates at the most comprehensive fair contracting conference in the nation. The NAFC National Conference is attended by hundreds of participants from across the nation, including representatives from labor organizations, responsible contractors, fair contracting compliance organizations as well as researchers, academics, attorneys and officials from federal, state and local governments.

Visit our website for further information.

(Visit NAFC’s Conference Page)

Study Finds Apprenticeships Are on the Rise in Minnesota (MN)

Posted by National Alliance for Fair Contracting on

Overall participation in apprenticeships grew by 27 percent between 2014 and 2017. About 96 percent of those are in construction.

SEPTEMBER 16, 2019
AMANDA OSTUNI

Apprenticeships are becoming an increasingly popular way for Minnesotans to kickstart their careers.

A study by the Midwest Economic Policy Institute (MEPI) and Dr. Robert Bruno of the University of Illinois at Urbana-Champaign found that participation in apprenticeships in Minnesota grew by 27 percent between 2014 and 2017, with 11,500 individuals enrolled in a program in 2017.

Apprenticeships are largely utilized as an alternative to college. MEPI policy director Frank Manzo says they have grown in popularity alongside the rising costs of college.

“An apprenticeship program offers the ability to earn while you learn,” Manzo says. “You go through roughly the same amount of classroom and on-the-job hours as you would through a bachelor’s degree program… but you’re getting paid to do it instead of accumulating debt.”

Citing data from policy research organization Mathematica, Manzo says apprenticeships provide an average annual earnings boost of $4,700-greater than most boosts provided by a bachelor’s or associate’s degree.

In addition to helping the individual, the MEPI study finds that apprenticeships serve as a significant boost to Minnesota’s economy.

“The data shows that every dollar spent on apprenticeship programs increases Minnesota’s GDP by $21,” says study researcher Robert Bruno, in a press release. “That makes apprenticeships one of the most effective investments we can make-not just in workers, but in the economy.”

The construction industry is at the heart of Minnesota’s apprenticeship participation. Even though construction accounts for just 11 percent of national occupations suited to apprenticeships, about 96 percent of the total number of individuals actively enrolled in Minnesota apprenticeships between 2015 and 2017 were working in skilled construction trades. This amounts to an annual industry investment of $30 million.

Manzo says this disproportion comes from the fact that construction is the only industry in the state to fully embrace apprenticeships thus far. He adds that the industry has been motivated by the impacts of the widespread labor shortage.

“They’re having difficulty finding qualified craft workers, so the solution is either pay people more and attract more workers into the industry or invest in training more workers and build up their skill sets,” Manzo says.

With the training approach, Manzo says many construction companies readily got on board with apprenticeships, working together to establish programs where workers could bounce between companies as jobs were available since the industry is naturally volatile and different companies win different bids at different times.

Manzo says he’d like to see state initiatives broaden the breadth of apprenticeship opportunities, particularly into fields like healthcare, IT, agriculture, and manufacturing.

“[Construction apprenticeships] have produced skilled construction workers that build our infrastructure, ensure schools are built safely,” Manzo says. “These programs could be replicated in other industries.”

(Read More)

(PDF Copy of Study)

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AG Nessel Joins Effort Urging Regulators To Protect Workers From Harmful Anticompetitive Labor Practices

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July 18, 2019 at 10:20 am

LANSING, Mich. – Michigan Attorney General Dana Nessel joined 17 other Attorneys General earlier this week in urging collaboration between Federal Trade Commission (FTC) regulators and state attorneys general to protect workers from anticompetitive labor practices that depress wages and limit job mobility and opportunities for advancement.

In a comment letter filed in connection with the FTC’s hearings on competition in the 21st Century, the coalition argues that the FTC should increase its focus on antitrust enforcement in labor markets and use their authority to crack down on non-compete and no-poach contract agreements-in addition to considering how workers are impacted by proposed mergers.

“In an era where wages continually decline and workers’ protections, like prevailing wage, are routinely stripped, we must begin reviving antitrust regulation in labor markets,” said Nessel. “We must do this to protect workers from harmful anticompetitive practices such as targeting low-income workers by forcing them to sign non-compete agreements and ultimately limiting their earning potential.”

(Read More)