Council bill aims to impose prevailing wage on all city-subsidized projects (NY)

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Wage and safety bills would incentivize union labor, but critics fear higher price tag.

By Jeff Coltin
JANUARY 8, 2019


New York City Councilman Ben Kallos is reintroducing a stalled bill that would require all construction workers to get paid the prevailing wage on any projects getting city subsidies.

Under state law, any project built under a government contract must pay workers the prevailing wage. Kallos’ bill would cast a much wider net, mandating the prevailing wage for not just direct government contracts, but for any projects getting grants, bond financing, tax abatements or any other sort of support valued over $1 million from the New York City government.

“The same rules should apply when the city is doing the work directly or when they’re subsidizing somebody else to do the work,” the Manhattan lawmaker told City & State.

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Critics like the Real Estate Board of New York, which represents developers, have spent heavily in the past to oppose efforts to expand the prevailing wage requirements, claiming higher labor costs would discourage private developers from building affordable housing.

Kallos countered that paying workers less than prevailing wage actually makes the affordable housing crisis worse by creating demand for housing at deeper levels of affordability.

“I’m disappointed to learn even the construction workers can’t afford the affordable housing that they are building,” he said.

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Rep. Christine Chandler Champions Fair Wages Bill To Prevent Wage Theft … Now Heads To House Floor (NM)

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Submitted by Carol A. Clark on February 23, 2019 – 8:34am

SANTA FE – The House Judiciary Committee passed Rep. Christine Chandler’s (D-Los Alamos) bill Friday to champion fair wages and benefits for workers. House Bill 246, regarding the Prevailing Wage, protects workers adversely affected by wage theft.

House Bill 246 ensures that New Mexicans are paid a fair wage for a hard day’s work by closing loopholes, providing a complaint resolution process, and increases penalties for violations. Addressing these issues in the Prevailing Wage law will keep jobs local, workplaces safe, and ensure quality workmanship in public projects.

Specifically, the bill makes certain that all employees working on public works projects are compensated fully. The bill also provides a process for workers to initiate prevailing wage complaints, and a mechanism for complaint resolution. House Bill 246 also increases penalties for those who do not properly compensate workers according to the Public Works Minimum Wage Act.

“Wage theft and treating workers unfairly undermines New Mexico’s economy. This legislation protects workers from exploitation and ensures they receive their hard-earned paychecks,” Rep. Chandler said. “Wage theft runs contrary to our values as New Mexicans, and I am proud to see this legislation move forward for working families.”

House Bill 246 now heads to the House floor.

(See Article)

‘Times Are Changing:’ More Women Breaking Into Construction Industry (NY)

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By Matt Kent
Published February 2, 2019

NEW YORK (CBSNewYork) – More and more women are shattering the glass ceiling and making their mark in the male dominated construction industry.

“Times are changing. It’s not just a man’s world anymore,” Tanay Matthews, of Brooklyn, told CBS2’s Vanessa Murdock.

Matthews works construction with Local 361.

“I love it, honestly. It’s tough, it’s physically draining, but every day I wake up and I give it my all,” she said.

She said she’s typically the only woman on site.

“I work with about 30 men now. My last job might have been 200,” she said.
According to the Building & Construction Trades Council of Greater New York City, women make up just four percent of the construction unions workforce. But as Matthews said, times are changing.

“Work needs to be done to continue to get the word out to women and young girls that yes, you can do this, this is a career for you,” said Kathleen Culhane, president of Non-Traditional Employment for Women, or NEW.
NEW offers a two-month pre-apprenticeship training program for women of New York City, many of them unemployed or underemployed women of color.

“It’s booming now. I’m so confident now that I’m going to be great, my family is going to be great,” said Shanique Latimer, who’s finishing up her training at NEW.

“My last job I worked at the World Trade Center and I’ve seen all these women – construction women – walking back and forth and they have like this pride on their face, and I wanted that for myself,” Tshura Williams added.

Now, she has the tools. 

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Financial Fraud and Wage Theft Continue to Plague Construction Industry

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Cases of fraud and wage violations continue to soil the image of the construction industry during this labor shortage

The National Law Review
FEBRUARY 28, 2019

Every week there seems to be yet another item in the news about contractors being charged with fraud, wage theft and more. This week is no different, unfortunately. 

In Arkansas, Matthew Beasley, President of Cobas, Inc. construction company in Conway, AK, was sentenced to 36 months in federal prison for defrauding a bank by creating fraudulent invoices. According to the Unisted Sates Department of Justice press release, Cobas would perform construction work for other companies and send invoices for that work.

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Meanwhile in Massachusetts, a state that has been under scrutiny for construction wage theft, Attorney General Maura Healy issued 165 civil citations against 66 construction companies in 2018. According to a press release from the Attorney General, restitution in 2018 exceeded $1.47 million for more than 1,030 employees, and the companies were fined more than $1.23 million.

Violations included:

  • Failure to page proper wages
  • Failure to pay overtime
  • Retaliation
  • Failure to furnish records for inspection
  • Failure to pay prevailing wage
  • failure to submit true and accurate certified payroll records
  • Failure to register and pay apprentices appropriately

“Workers in the construction industry are particularly vulnerable to wage theft from dishonest contractors who cheat their workers,” said AG Healey. “As Massachusetts undergoes a historic construction boom, my office will continue to fight for exploited workers and ensure they are paid the wages they earn.”

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Supes Unanimously Approve $500K For Office Protecting Workers’ Rights (CA)

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Bay City News Service
Published 6:44 pm PST, Tuesday, February 12, 2019

The Santa Clara County Board of Supervisors voted unanimously to stand with workers who have experienced wage theft or abuse from their employers by increasing the budget of its enforcement office by $500,000 on Tuesday. 

The decision brings the Office of Labor Standards Enforcement’s overall funding to $1 million, which will be directed toward multilingual workers’ rights trainings, individual interviews for workers who report abuse and greater partnerships with community-based rights organizations. 

The training curriculum may include education on human and labor trafficking, wage theft, sexual assault, sexual harassment, and retaliation, as the office moves toward expanding its purview in these areas. 

The office was established in November 2017, but many workers argued its scope was limited. Some individuals said they had won settlements against their employers, but the money had not yet been awarded to them due to a lack of enforcement. 

The supervisors’ vote begins to address funding for both issues. 

“This decision will have a major impact on wage theft in Santa Clara County and help to protect workers from wage theft, human trafficking and sexual assault,” Derecka Mehrens, executive director of Working Partnerships USA, said in a news release. 

Smaller local organizations, such as those directed to Vietnamese, Filipino and Chinese-American communities, will be able to work with the county to identify industries that frequently violate the law.  

(Read More)

AG Becerra, Assemblymember Gonzalez Unveil Legislation to Strengthen Program to Combat CA’s Underground Economy (CA)

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Submitted by Carol A. Clark
on February 23, 2019 – 8:34am


SAN DIEGO, Feb. 22, 2019 – California Attorney General Xavier Becerra and Assemblymember Lorena Gonzalez today unveiled legislation, AB 1296, the Tax Recovery in the Underground Recovery program (TRUE Act), to combat underground economic crimes. AB 1296 is sponsored by Attorney General Becerra and was introduced by Assemblymember Lorena Gonzalez.

“With underground economic crime, our workers get exploited, business owners face unfair competition, consumers get ripped off, and taxpayers bear the burden,” said Attorney General Becerra. “AB 1296 expands on successful efforts to prosecute violators and recover funds involved in wage theft, tax evasion, counterfeit commerce and other economic crimes. The funds recovered become available to benefit cheated workers, our schools, law enforcement and our communities.”

“The underground economy hurts everyone: workers who are left without protection, consumers who are sold dangerous or fake products, and the state as we lose tax money,” said Assemblywoman Gonzalez. “This task force is a unique, collaborative approach for law enforcement to breakdown its usual silos and execute wider solutions for targeting the underground economy.”

According to a University of California at Los Angeles Labor Center report, the state’s underground economy generates between $60 to $140 billion in unreported revenue annually, depriving the state of $8.5 billion in corporate, personal, and sales and use taxes each year. TRUE’s pilot program, established in 2014, allowed agencies in Sacramento and Los Angeles to work together to investigate and prosecute the most outrageous felony-level multijurisdictional underground economic crimes in California. In September 2018, Attorney General Becerra announced the results of a year-long investigation that led to charges against a family of four for labor exploitation and human trafficking. In October 2018, Attorney General Becerra also announced that the State of California regained lost state revenues from an underground prescription drug business, from an illegal pharmaceutical scheme and from operators who possessed counterfeit merchandise intended for sale. AB 1296 builds on the success of a state pilot program by permanently establishing law enforcement teams in Sacramento and Los Angeles and authorizing additional teams in the three other major metropolitan regions of the state-San Diego, the Bay Area, and Fresno.

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SEATTLE CITY COUNCIL TARGETS IC MISCLASSIFICATION, GIG ECONOMY (WA)

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February 22 2019

The Seattle City Council passed a resolution this week targeting the misclassification of workers as independent contractors when they should be designated as employees.

The lawmakers requested semi-annual updates to the Council, starting at the end of this year’s third quarter, on what the Office of Labor Standards and Labor Standards Advisory Commission is doing to investigate and correct misclassifications.

“There are more and more employees who are being categorized as contractors and are not eligible to receive access to our labor laws,” Councilmember Lisa Herbold during Tuesday’s meeting, GeekWire reported. She said she had ongoing conversations with a driver for Amazon Flex, human cloud platform that enables drivers to deliver packages with their own cars.

“Companies pay the drivers to do the work of employees but treat them as independent contractors, denying them basic amenities like healthcare benefits [and] worker compensation,” Herbold said.

The resolution asks the Office of Labor Standards, the city department that investigates and enforces the city’s labor laws, to:

  • Propose policy solutions to help address this issue of misclassification.
  • Develop enforcement strategies and subject matter expertise to resolve misclassification inquiries and complaints
  • Develop outreach and education strategies for the Office of Labor Standards to inform workers and employers.
  • Work with the Office of Intergovernmental Relations on those issues most appropriately addressed by the state, and incorporate them into the city’s 2020 State Legislative Agenda.
  • Work with experts in employment law to perform a thorough legal analysis on ways to mitigate the adverse impact of the Supreme Court’s decision in Epic Systems Corp v. Lewison Seattle workers’ ability to band together to challenge an employer’s illegal acts.

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City of Industry construction firm fined nearly $12 million for wage theft (CA)

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The violations impacted more than 1,000 workers at projects in Los Angeles and Orange counties

By KEVIN SMITH PUBLISHED: February 11, 2019 at 5:11 pm

A City of Industry construction firm has been fined nearly $12 million in what state regulators are calling the biggest wage theft violation ever by a private company in California.

The state Labor Commissioner’s Office announced Monday, Feb. 11 that it cited RDV Construction Inc. for violations that left more than a thousand workers waiting weeks or months to be paid, only to receive a portion of what they were owed.

The company hired crews to provide framing, drywall and other trade work for hotels, apartments and mixed-use buildings around Southern California.

A litany of violations

Investigators determined that between 2014 and 2017, RDV employed more than 1,000 workers at 35 construction sites scattered primarily throughout Los Angeles and Orange counties and typically worked its crews nine hours a day without proper rest breaks or overtime pay.

The company “habitually and illegally” withheld up to 25 percent of the wages workers earned, investigators said, and during a 21-month period, they were paid with checks that bounced due to insufficient funds.
RDV projects have included the Crown Apartments complex in West Hollywood and Boardwalk by Windsor, an upscale apartment community in Huntington Beach, among others.

…

“Dodging labor laws and stealing wages hurts workers and creates unfair conditions for law-abiding employers,” California Labor Secretary Julie A. Su said in a statement. “Stealing earned wages from workers’ pockets is illegal in California and this case shows that employers who steal from their workers will end up paying for it in the end.”

The citations total $11,943,054 payable to workers in unpaid wages and premiums…

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San Jose to consider proposal to help employees receive pay they deserve (CA)

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Construction workers on the Silvery Towers project downtown were held in squalid conditions

By EMILY DERUY
PUBLISHED: January 31, 2019 at 6:00 am

Months after it surfaced that workers on a high rise in downtown San Jose were held in captivity and forced to work without pay, the City Council is expected to consider stronger wage protections to prevent companies from refusing to pay employees what they deserve.

In a memo to the city’s Rules and Open Government Committee, several members of the San Jose City Council – Raul Peralez, Chappie Jones, Magdalena Carrasco and Sergio Jimenez – suggested broadening the city’s current wage theft protections to cover construction workers on both public and private projects. They also said developers proposing construction projects involving more than 5,000 square feet of floor area should have to disclose wage theft violations by their contractors and subcontractors. If companies are found to have unpaid wage theft claims, the council members argued, they should be disqualified until the claims are paid.

In July, the U.S. Labor Department announced that more than a dozen immigrants working on the Silvery Towers project at the corner of N. San Pedro and W. St. James streets were held in squalid conditions in a Hayward house and forced to work on projects across the Bay Area.

The changes, the council members wrote, “will ensure that another Silvery Towers does not occur again and that the city is not blindsided by another atrocity.”

…

Construction workers and labor groups urged the council to make broadening its wage theft policy a priority. However, business groups warned doing so could create demanding new regulations for developers and hamper the city’s aim of adding thousands of new affordable homes in the next few years.

“It is the ethical and quite honestly the honorable thing to do,” said Steve Flores, with the group Santa Clara County Residents for Responsible Development, adding that the update would close “gaping loopholes” that leave construction workers fending for themselves.

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Department of Labor v. Department of Revenue Services: Employee, Independent Contractor, or Both (CT)

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February 7, 2019

For years now, the Connecticut Department of Revenue Services (DRS), the Connecticut Department of Labor (DOL) and the Internal Revenue Service (IRS) have been targeting Connecticut employers for worker misclassification audits. When a misclassification is discovered, these government entities can share information about employers who have misclassified employees as independent contractors. Thus, when one of these government entities finds a misclassification during an audit, audits from the other governmental entities are likely to arise.

When a misclassification is discovered, the employer will be subjected to various federal and state taxes, penalties and interest charges. A misclassification occurs when an employee is incorrectly treated as an independent contractor. As a result, the worker does not have income taxes or payroll taxes withheld from his/her pay and is not issued a Form W-2. Businesses aren’t the only employers targeted for such audits. Charitable organizations, public school systems, cities, towns, and even State departments are subject to audit.

The IRS and the DRS have historically used a 20-factor test to determine if a worker is an employee or independent contractor. The factors are used to determine if the service recipient has the right to control the service provider, not only as to the result to be accomplished, but also as to the details and means by which that result is accomplished. If such control is found, the worker is deemed to be an employee. The 20 factors are used to determine if the service recipient has behavior, financial, or relationship control of the worker. We refer to this as the “IRS Control Test”. The DRS uses the IRS Control Test.However, the DOL, uses a stricter three-part test for determining if a worker is an independent contractor referred to as the “ABC Test.”

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This results in the absurd situation in which a worker is treated as an independent contractor for income and payroll tax purposes and as an employee for DOL purposes, such as unemployment insurance, workers compensation, fringe benefits and labor and employment laws.

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