TWO MASSACHUSETTS FIRMS FALL SHORT ON $2.4 MILLION OWED OVER IC MISCLASSIFICATION (MA)

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Staffing Industry Analysts
September 18, 2019

Two Massachusetts construction companies and their officers have fallen short on payments required under a 2016 consent judgement over Fair Labor Standards Act violations that included misclassifying workers as independent contractors, the US Department of Labor reported. Now, labor officials are asking the court to hold them in civil contempt.

The consent judgment required them to pay $2.4 million in back wages and liquidated damages to 478 employees. However, they have paid only $477,900 and currently owe nearly $1.8 million plus interest to affected employees, according to the department.

“These employers conceded that they unlawfully kept the wages of 478 employees and committed themselves to paying those employees under a consent judgment and order of the court. In violation of that order, the employers have unlawfully kept $1,179,842.55 of their employees’ hard-earned wages,” said Maia Fisher, regional solicitor of labor for New England.

“After numerous attempts to resolve the employers’ continued failure to comply with the court order, the US Department of Labor now asks the court to hold the defendants in contempt and impose all sanctions required, including imprisonment if necessary, to ensure compliance with the court’s original order,” Fisher said.

Named in the original 2016 consent judgement and order are Force Corp., AB Construction Group Inc. and employers Juliana Fernandes and Anderson dos Santos.

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Opinion: Standing Up For Good Jobs in Our Community (MA)

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By Staff
September 13, 2019

By Lou Antonellis, Harry Brett, Bob Butler, Peter Gibbons and Brian Kelly

Workers in Massachusetts are fortunate to have a number of excellent protections enshrined in state law. A great example of one of these protections is the prevailing wage law. Unfortunately, a loophole exists that allows unscrupulous contractors the ability to exploit workers and avoid paying them a fair wage for their labor. This loophole has allowed greedy contractors to skirt the law and lower standards for workers in a difficult and sometimes dangerous industry by utilizing off-site prefabrication facilities. By keeping the fabrication away from the construction site, these bad contractors are underbidding the law-abiding local contractors and cheating working people out of a fair wage.

The members of the union building trades, who we are proud to represent, are a well-trained, professional workforce who spend hundreds of hours training in state-certified apprentice programs. Many of them are trained right here in Dorchester and are qualified to design, fabricate and assemble products and equipment installed at the project site. Furthermore, our members are OSHA-trained and certified.

That’s why the union building trades are so deeply invested in fighting to close this loophole. Our members live in your community. We’re your neighbors, youth soccer coaches and karate instructors. We work, learn and play alongside you and your family everyday, and we’re committed to our region’s future. We don’t want to see these bad actors driving wages and standards down in our towns.

Thankfully, Representative Tackey Chan (D-Quincy) has proposed an excellent solution in the form of H.1599, known as the Off-Site Fabrication Bill, which would close this loophole and end a practice that allows bad contractors to undercut good ones.

We’re calling on the leadership of the Joint Committee on Labor and Workforce Development to move H.1599 out of committee so the Legislature can consider it for a vote in this current session. Both California and New Jersey have enacted similar laws, strengthening worker protection and ensuring that standards for their communities are being upheld. We can’t let our communities fall behind and allow these bad contractors to continue exploiting this loophole.

By passing H.1599 our elected leaders are taking a stand to ensure the quality of construction for our public works projects, as well as the fair wages and working conditions for the women and men working on both the construction site and in fabrication facilities.

Everyone who works deserves fair treatment, a safe working environment and a fair wage for their labor. Passing H.1599 would ensure that workers in off-site fabrication facilities have the dignity they deserve. Let’s take a stand together for strong communities that value hard work. Let’s level the playing field for our local, law-abiding contractors. Please join our members and call your state senator and state representative today to urge them to move H.1599 out of committee and call a vote.

For more information or to join the fight to close this loophole, please visit www.smw17boston.org.

Lou Antonellis is the Business Manager of IBEW Local 103
Harry Brett is the Business Manager of Plumbers Local 12
Bob Butler is the Business Manager of Sheet Metal Workers Local Union 17
Peter Gibbons is the Business Manager of Sprinkler Fitters Local 550
Brian Kelly is the Business Manager of Pipefitters Local 537

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Michigan Legislature Considers Package of Bills Addressing Wage Theft, Independent Contractors, and Noncompetes (MI)

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The National Law Review
Friday, September 6, 2019

On August 29, 2019, legislators from the Michigan House of Representatives announced an ambitious package of 12 bills aimed at creating new criminal and civil penalties to combat employers that fail to properly pay wages and overtime pay. The legislation would also establish enhanced protections and penalties under Michigan’s whistleblower statute and create new civil remedies against employers for overzealous enforcement of noncompete agreements and for misclassifying employees as independent contractors.

Background

The bills’ highly publicized announcement, which was coordinated with local labor union leaders to occur just before the Labor Day holiday, aligns with Michigan Attorney General Dana Nessel’s Payroll Fraud Enforcement initiative. Nessel introduced the initiative in April 2019 when she created a payroll fraud hotline for reporting suspected violations of existing payroll and wage theft laws in effect in Michigan.

The new legislation would make employee-friendly modifications to several Michigan statutes, including the Payment of Wages and Fringe Benefits Act (PWFBA), the Whistleblowers’ Protection Act (WPA), the Michigan Antitrust Reform Act (MARA), and the Improved Workforce Opportunity Wage Act (IWOWA), and would amend the Michigan Code of Criminal Procedure to create a new felony offense for employers that commit a second or subsequent violation of certain provisions of the PWFBA.

Summary Analysis of the Bills

Below is a summary of the initial drafts of the ten House bills in the package that would have the most significant effect on private employers. It is important to note, however, that these are initial drafts of proposed legislation and are a long way from being enacted into law, especially given the current composition of the Michigan Legislature. However, the intense interest from the attorney general’s office and any changes in the makeup of the House and Senate could give the bills momentum.

…

Final Thoughts

As Jimmy Stewart taught us all in his 1939 film Mr. Smith Goes to Washington, bills introduced on the legislative floor have a long way to go before they become law. To be sure, the potential for civil fines ranging from $5,000 to $10,000 per violation, mandatory assessment of attorneys and lost wages, and the possibility of felony criminal penalties make the legislative package something that will garner a lot of attention. Moreover, given the intense interest from the attorney general’s office and Michigan labor leaders, it is unlikely that the bills will die without significant debate and perhaps some provisions being passed into law.

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Clean energy jobs are big in Minnesota. But they often go to people from out of state (MN)

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By Walker Orenstein | 08/16/2019

The fastest growing jobs in the country are solar panel installers and wind turbine service technicians, a fact that clean energy advocates use as evidence of a growing sector and the economic upside of transitioning away from fossil fuels.

But in Minnesota, the rise of clean energy isn’t always resulting in new jobs for Minnesotans – at least when it comes to building wind projects. A report released Thursday by the Minnesota and North Dakota chapter of the Laborers’ International Union of North America says wind developers heavily rely on traveling workers, often from other states, even though there’s been an uptick in local hiring for the construction jobs this year.

Lucas Franco, the LIUNA branch’s research manager, says workers from states like Texas, Utah and California are often cheaper and can make up the bulk of a project in Minnesota. In-state residents or workers living within 150 miles of a major wind farm in Pipestone County accounted for 32 percent of construction hours worked, for example. Preliminary research done by LIUNA also suggests solar developers often lean on out-of-state workers for construction, Franco said.

“It’s a big concern for us, particularly in the context of this moment, of our energy infrastructure transition that we’re in,” he said. “A lot of clean energy advocates are trying to build popular support for new wind and solar projects, and I think that’s hard to do when folks in the conventional energy sector are losing their work and not necessarily finding work building wind farms or solar farms.”

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Roseville adds labor standards to subsidies after union criticizes developer’s use of subcontractors (MN)

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By J.D. DUGGAN
PUBLISHED: September 20, 2019 at 6:58 pm

Roseville has begun adding labor standards to development tax break deals after union officials raised concerns about how developers are using subcontractors.

Earlier this week, prompted by a dispute over a $29.4 million Fairview Avenue apartment building, the city required developers to obey all environmental, labor, health and zoning laws and restrictions, as well as to pay all contractors, subcontractors and laborers before requesting a Certificate of Completion. If a developer is found guilty of wage theft, the city can withhold payments.

“How are we going to make sure people are treated fairly and paid fairly and not given these promises?” said Roseville City Council member Wayne Groff. “I don’t know how much this will affect this exact development.”

The requirements will become standard language in all future agreements where the Roseville Economic Development Authority provides financial assistance.

Roseville’s move comes after members of the North Central States Regional Council of Carpenters told members of the Roseville Economic Development Authority at a meeting that some developers use subcontractors who allegedly break labor laws such as using child labor, stealing wages and exploiting workers.

DEVELOPER IN THE CROSSHAIRS

Minneapolis-based Reuter Walton is planning an apartment building in the 2700 block of Fairview Avenue in Roseville. A $3.5 million tax increment financing deal would be part of the package.

As the project neared its final approval stages, members of the carpenters union jammed an Economic Development Authority meeting and objected to Reuter Walton’s use of subcontractors. One of those past subcontractors – Ricardo Batres – was charged with labor trafficking, theft by swindle and insurance fraud.

The union has taken its criticisms to other cities where Reuter Walton is considering projects, including St. Paul, where an apartment complex was approved last month.

“Reuter Walton continues to profit off of these (subcontractors) that are engaging these violations repeatedly,” said Richard Kolodziejski, spokesperson for the carpenters union.

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Construction wages cut in half by new prevailing wage rules (MO)

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By KTTN News | 08/29/2019

According to Jeff Phillips, Communications and Outreach Manager of the Laborers International Union of North America in St. Joseph, construction workers in many rural Missouri counties are working for less this Labor Day holiday.

Missouri’s new prevailing wage law has cut wages for construction workers in many counties, sometimes by more than half. The new formula that calculates the wage for public works projects was approved by Missouri lawmakers last year and went into effect on July 1st.

One of the counties hardest hit was Grundy County in northwest Missouri. The new prevailing wage for construction laborers on building projects is $19.81 an hour, as compared to $39.56 an hour in 2018. Heavy highway laborers this year will earn $19.81 an hour, down from $40.63. The higher wage often included benefits like health insurance and pensions. The new wage applies to all construction crafts in Grundy County.

“This is not a union problem. It hits everyone who works construction, union, and non-union, across all trades,” said Jason Estes, Business Manager of Laborers Local 579 in St. Joseph. “These pay cuts are hitting many of our rural counties hardest, where construction wages are the best jobs available in these communities. These are the people and places who need these family-wage jobs most.”

The new law calculates the wage based on public works projects with more than 1,000 hours worked, and a project cost of more than $75,000. The wages are broken down into two categories: Building, which includes projects like schools, and state and local government facilities; and Heavy Highway, which includes any local, county, state or federal road or bridge.

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Page wants prevailing wage for county projects (MO)

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October 2, 2019 1:27 pm

St. Louis County Executive Sam Page announced last week that he will request that the County Council enact an ordinance requiring contractors to pay a prevailing wage on projects where St. Louis County extends tax incentives.

Page said he planned to request the ordinance last Friday, when the council agenda is released.

Prevailing wage refers to the rate of pay contractors must offer employees when doing business with a public agency. Prevailing wages are established by Missouri’s Department of Labor and Industrial Relations for each trade and occupation.

“In St. Louis County, our work force deserves to earn competitive wages for their work,” Page said in a news release. “Requiring contractors to pay a prevailing wage will prevent companies from low-balling proposals at the expense of their workers.”

Although prevailing wage requirements may increase the hourly labor cost of a project, such requirements may actually help keep the total project cost down by promoting better training, work efficiency and productivity and retention of highly skilled workers, according to the release.

Page also contended that prevailing wage policies help boost the local economy by promoting the use of local contractors and residents for projects, which promotes more money earned and spent in the local economy.

“These prevailing wage requirements, coupled with the county’s minority- and women-owned business enterprises policies, will help promote economic development and protect the interests of working families in St. Louis County,” said Page in the release.

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Ending payday pilferage (NJ)

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New Jersey strengthens its wage-theft laws

By: Daniel J. Munoz
August 19, 2019 12:01 am

Less than a day after Acting Gov. Sheila Oliver signed a measure ramping up penalties for violations of the state’s wage theft law, state regulators announced they hit an employer with a $20,000 fine for allegedly engaging in that very practice. …

Janice Fine, an associate professor who heads the Center for Innovation in Worker Organization at the Rutgers School of Management and Labor Relations, said that such a quick turnaround will shock employers engaged in the same practices and that they need to start paying workers what they are actually owed.

“If you name and shame it works,” Fine said.

Wage theft happens when an employer does not pay workers what they are owed; it can happen in service industries, blue collar sectors and office environments, Fine said. Theft can take a variety of forms: refusing to pay workers at all or refusing to pay for hours worked; refusing to pay standard hourly or overtime minimum wage rates, or refusing to pay for time out of regular shifts or “off the clock.” Employees might be given checks that bounce, have illegal deductions taken from their paycheck or deductions for meals and other breaks they did not actually receive.

At least $2 billion in stolen wages were recovered nationwide between 2015 and 2016, according to a 2017 study by the Economic Policy Institute.

The newly enacted New Jersey measure increases fines for wage theft to between $500 and $1,000 and provides for prison sentences of between 10 and 90 days for a first offense. Fines would climb to between $1,000 and $2,000 for a second offense, and imprisonment for up to 100 days. Habitual offenders could face up to five years in prison and fines of $15,000.

To force the hands of employers found guilty of wage theft, the state labor commissioner can revoke an employer’s license – effectively shutting down the business – until the correct wages are paid.

Employees can seek recovery of up to six years of stolen wages, or up to 200 percent of their stolen wages – capped at $50,000 – if business owners are found to have retaliated against workers for reporting the thefts. Proponents of the anti-retaliatory measures argue they are necessary to prevent employers from forcing workers to keep quiet about wage theft.

“Today we want to send a message to employers, the bad employers, that in New Jersey we are not going to tolerate the exploitation of any worker,” Oliver said at an Aug. 6 bill-signing ceremony in Elizabeth.

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N.J. contractor gets prison for cheating undocumented workers out of $155K at dorm project in Camden (NJ)

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By Joe Brandt
Posted Sep 12, 2019

Past violations should have stopped Albert Chwedczuk from getting any public money – and therefore, from working on a student housing facility for Cooper Medical School.

He was barred from working on public contracts after past violations of the state Prevailing Wage Act with companies Ren Construction and Real Construction. But he created a new company that soon earned a $400,000 subcontract for masonry work at a Cooper dorm on South Broadway in Camden.

During that work, from 2015 to 2016, Chwedczuk did not pay prevailing wage to his employees, many of whom were undocumented immigrants, the state Attorney General’s office and Department of Labor and Workforce Development said in a news statement.

They estimated that he cheated employees out of about $155,166 in wages once obtaining the contract. He paid most employees a fraction of the prevailing wage they were owed, and others were not paid at all. Chwedczuk also sent falsified payrolls to the project’s general contractor each week.

He also told employees to lie to an investigator from the state labor department about the wages they were receiving, the statement says.

“When contractors receive taxpayer dollars for a public project, they promise to pay prevailing wages to employees for all their hard work,” Attorney General Gurbir Grewal said in the statement. “But this employer cheated his workers and hoarded public funds for his own enrichment. This case is a message to all employers that we will not tolerate contractors underpaying their workers and lying about it.”

“Contractors working on public projects in New Jersey must pay their workers every penny they are entitled to under the law,” Labor Commissioner Robert Asaro-Angelo said.

Chwedczuk pleaded guilty on March 27 to a second-degree charge of false contract payment.

On Sept. 6, Camden County Superior Court Judge Mark Chase sentenced Chwedczuk, 45, of Toms River, to three years in state prison.

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10 laborers getting $170K in back pay after state finds company short-changed them on construction job (NJ)

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By: Kevin Shea, for NJ.com
August 9, 2019

Ten construction workers will split a $170,000 settlement with a company the state says underpaid them while working on a construction job at a Trenton senior living community.

The company, Tri County Real Estate Maintenance Co., of Carneys Point, is also paying $30,000 in administrative fees and penalties, the state Department of Labor and Workforce Development announced Friday.

The project at the Trent Center East and West apartments on Greenwood Avenue in Trenton received tax credit incentive funding, through the State Economic Redevelopment and Growth program, and was subject to New Jersey’s prevailing wage laws.

A state Labor Department investigation, sent to the agency by the U.S. Department of Labor, found Tri County underpaid the laborers.

In this case, laborers stated they were paid between $15 and $30 per hour, but the prevailing wage rate was $55.37 per hour for a laborer, the state said.

The state’s Prevailing Wage Act provides level wages for workers on public works projects – to protect workers and prevent unfair labor competition. The rates vary by county and trade, the state says.

“Public contracting is not a right – it is a privilege,” Labor Commissioner Robert Asaro-Angelo said in a statement. “We want all employers to know that our department takes the state’s prevailing wage laws seriously, and we will continue to investigate these matters to protect our taxpayers’ investments.”

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