Federal Court Orders 4 Arizona Contractors to Pay Over $3.2m in Owed Wages, Damages to 890 Workers after Department of Labor Investigations

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: April 22, 2024
Release Number: 24-608-NAT

Employers also liable for $95K in penalties for overtime, minimum wage violations

PHOENIX – The U.S. Department of Labor announced today that efforts to protect residential construction workers from unlawful pay practices have recovered a total of $3.2 million in wages and damages from four Arizona contractors for 890 workers.

After a series of investigations, the department’s Wage and Hour Division determined that 4-E Painting LLC and Liberty Constructors LLC in Mesa and BCK Coatings Inc. and Geronimo Wall Systems LLC in Tempe willfully and recklessly shortchanged the affected workers and violated the overtime and minimum wage provisions of the Fair Labor Standards Act.

The division’s investigations found:

  • 4-E Painting LLC did not pay overtime wages when the employer paid employees piece-rate wages for painting work or a combination of hourly wages and piece-rate wages. The division determined 4-E Painting owed $432,633 in overtime wages and an equal amount in liquidated damages to 158 workers. The department also assessed $24,732 in penalties.
  • Liberty Constructors LLC denied employees required overtime pay and tried to conceal its violations by falsely showing a higher hourly rate or fewer hours worked on payroll records. The division found the contractor owes $401,049 in unpaid wages and $401,049 in liquidated damages to 100 employees. The department also assessed $17,900 in civil penalties.
  • Geronimo Wall Systems LLC denied overtime pay to 195 employees for hours over 40 in a workweek. The lath, stucco, siding and stone contractor misclassified many of the employees as independent contractors. The division determined the employer owes $443,115 in overtime wages and $443,115 in damages to 195 employees, and the department assessed $22,770 in civil money penalties.
  • BCK Coatings Inc. failed to pay required overtime wages for hours over 40 in a workweek. The apartment remodeling contractor misclassified employees as independent contractors, made improper deductions of up to $20 per week from employees’ pay, required workers to cash their paychecks at a check-cashing business that charged a fee and failed to pay one employee for eight weeks of work. The investigation found BCK owes $360,000 in unpaid minimum and overtime wages and an equal amount in liquidated damages to 437 employees. The department also assessed $30,000 in penalties for the employer’s willful violations.

“Our investigators have found that schemes to pay straight-time for all hours worked and avoid paying required overtime rates at time and one-half are pervasive among employers in Arizona’s construction industry,” said Wage and Hour Division District Director Eric Murray in Phoenix. “These unlawful practices create the false impression that piece-rate workers’ wages comply with the Fair Labor Standards Act when, in fact, these employees are being stripped of their earned wages. The Wage and Hour Division is committed to holding employers accountable and ensuring that they do not obtain an unfair competitive advantage by denying workers their full wages.”

(See Full Article)

shutterstock_406114573-600x300

Nearly $16M in wages, benefits recovered for more than 2,800 workers denied full pay by 62 subcontractors on federal project at New Jersey military base

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: January 29, 2024
Release Number: 23-2598-NAT

A widespread investigation by the U.S. Department of Labor has recovered nearly $16 million in back wages and restored over 24,700 paid sick leave hours to leave banks for more than 2,800 workers denied their full wages and benefits by 62 subcontractors hired to construct temporary housing and provide services to Afghan refugees at Joint Base McGuire-Dix-Lakehurst in New Jersey.

After 75 investigations that included Jupiter, Florida-based Disaster Management Group LLC, one of the project’s general contractors, and 61 subcontractors, the department’s Wage and Hour Division found DMG and its subcontractors violated federal law, including the McNamara-O’Hara Service Contract Act, the Davis-Bacon Act, the Contract Work Hours and Safety Standards Act, the Fair Labor Standards Act and Executive Order 13706, by failing to:

Pay minimum prevailing wage rates to workers.
Pay fringe benefits.
Pay proper overtime.
Offer required paid sick leave under Executive Order 13706.
Properly classify workers as employees in their appropriate trades according to the work they performed.
Maintain required records, including segregating any benefits that may have been paid from wages.
Provide required notices to workers informing them of their rights under federal law.

The division found DMG liable for its own violations of federal law as well as for violations committed by its subcontractors for work performed at Joint Base McGuire-Dix-Lakehurst. Managed by the Department of Defense, the project involved contractors from 17 states and Puerto Rico tasked with building temporary housing and coordinating delivery of medical, food and translation services as part of Operation Allies Refuge and Operation Allies Welcome to resettle Afghan refugees. The project began in July 2021 and was completed in February 2022.

In addition to paying the back wages and fringe benefits, DMG signed an enhanced compliance agreement with the department that requires it to develop and follow strategies to prevent, detect and resolve potential non-compliance by, among other things:

Creating a written prevailing wage compliance manual to include employees’ federal protections.
Vetting potential subcontractors’ ability to perform work in compliance with prevailing wage laws.
Monitoring itself and its subcontractors proactively by periodically conducting confidential employee interviews, reviewing basic and certified records, analyzing the use of classifications related to the work performed, verifying fringe benefit payments and maintaining a list of all employees of all subcontractors on any covered contracts.
Requiring subcontractors to certify compliance on all prevailing wage projects.
Verifying that the agency has incorporated the correct labor clauses and wage determinations.

“Every worker deserves to be paid the full wages to which they are entitled, and this compliance agreement, which recovers millions in wages for hundreds of workers, should serve as notice to other government contractors that the department will utilize its full power to enforce vigorously federal wage laws,” said Solicitor of Labor Seema Nanda.

Read More

unnamed

Evidence of Worker Exploitation Stops Work at 110 Job Sites

Posted by National Alliance for Fair Contracting on

New Jersey Department of Labor & Workforce Development
FOR IMMEDIATE RELEASE
July 11, 2023

TRENTON – In the four years since Governor Murphy expanded the New Jersey Department of Labor and Workforce Development’s (NJDOL) powers in 2019 to halt work on job sites when there is strong evidence of worker exploitation, over 110 stop-work orders have been issued and more than $2.7 million in back wages owed to affected workers, liquidated damages, and penalties have been assessed.

In 2021, Governor Murphy further boosted these powers, permitting stop-work orders to be applied to all work sites of an employer found to be in violation of the law.

“Since the beginning of our Administration, we have been dedicated to respecting, defending, and upholding the rights of all New Jersey workers, who are the lifeblood of our economy,” said Governor Murphy. “These expanded powers have led to over a hundred stop-work orders in just the past few years, advancing our commitment to stronger and fairer worker protections.”

“Having the authority to shut down work as soon as wrongdoing is identified has exponentially strengthened the department’s effectiveness at enforcing our state’s wage and hour laws and protecting workers and law-abiding employers,” said Labor Commissioner Robert Asaro-Angelo. “We’ve made it clear: If we find you are cheating workers, we will halt your business operations, and in many cases, you will be told to leave the job by the general contractor or contracting authority.”

“A vast majority of New Jersey employers follow the law and do right by their workers, but NJDOL wants to ensure all businesses are following the law and treating workers fairly,” Asaro-Angelo added. “It’s not just about stopping the violations in progress. There is also an educational component to prevent these issues from happening in the first place.”

NJDOL’s Division of Wage and Hour and Contract Compliance has the authority to immediately halt work at any public or private worksite – both construction and non-construction – when an investigation finds evidence an employer has violated state wage, benefit or tax laws. Examples include: misclassifying employees as independent contractors; not having appropriate workers’ compensation insurance; failing to pay prevailing wage or overtime; or paying workers partially, late, or off the books.

(Read More)

US Department of Labor Recovers $633k In Back Wages for 84 Workers for Violations by District of Columbia Development Site’s Subcontractors

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: March 20, 2023
Release Number: 23-462-PHI

Investigators also find some employers falsified records at Southeast residential development
WASHINGTON – The U.S. Department of Labor has recovered $633,029 in back wages for 84 workers denied their full wages and benefits by subcontractors involved in construction of an affordable housing development funded by the District of Columbia.

Three offices of the department’s Wage and Hour Division conducted investigations of six subcontractors hired to work on The Bridge project in the district’s southeast section by the development’s general contractor, McCullough Construction and its first-tier subcontractors. The division found the employers violated the Davis- Bacon Act, Contract Work Hours and Safety Standards Act, and the Fair Labor Standards Act.

The division recovered $292,193 in back wages for 14 employees of MTZ Electric Service LLC of Laurel, Maryland, after determining the subcontractor misclassified workers as independent contractors, failed to pay prevailing wage rates and the required overtime premium, failed to provide health and welfare fringe benefits, and violated recordkeeping requirements when it omitted workers from certified payroll records and falsified certified payroll records. Colonial Electric Company Inc. of Harwood, Maryland – the first-tier subcontractor that hired MTZ Electric – agreed to pay the back wages.

To resolve the case, MTZ’s owner, Victor Martinez, signed a consent agreement to accept debarment, which prohibits the employer from bidding on federally funded construction projects for a period of three years.

The division also recovered $253,146 in back wages for seven workers of Igloo Construction Inc. in Westminster, Maryland. Investigators found the employer failed to pay proper prevailing wages and fringe benefits, falsified certified payroll records, and hired a labor broker who failed to report its workers on weekly certified payroll records. The division held the first-tier contractor – Titan Mechanical Inc. of Manassas Park, Virginia – liable for the back wages because they failed to include the required Davis-Bacon labor standards’ clauses in their subcontract with Igloo.

(Read More)

 

AG Healey Secures Nearly $3 Million in Penalties and Back Wages Within the Construction Industry in Fiscal Year 2022

Posted by National Alliance for Fair Contracting on

FOR IMMEDIATE RELEASE: 8/22/2022
Office of Attorney General Maura Healey
The Attorney General’s Fair Labor Division

AG’s Fair Labor Division Cited 100 Construction Companies for Violating State Labor Laws, Securing Restitution for More Than 850 Workers

BOSTON — As part of an ongoing initiative to combat wage theft in the construction industry, Attorney General Maura Healey announced today that her office issued 216 citations against 100 construction companies for violating the state’s wage and hour and prevailing wage laws over fiscal year 2022. As a result of these enforcement actions, more than 853 workers will receive more than $1.7 million in back pay and the companies will pay over $1.1 million in fines.

“Our Fair Labor Division works hard to advocate for construction workers across Massachusetts who are often vulnerable to wage theft and other forms of exploitation on the job,” said AG Healey. “Through continued enforcement, outreach, and education, we are committed to ensuring a fair working environment in the construction industry and a level playing field for responsible employers.”

The violations in these cases, handled by the AG’s Fair Labor Division, include the failure to pay wages in a timely manner, to pay overtime, and to furnish records for inspection, as well as retaliation. For work performed on public construction projects, violations include failure to pay the prevailing wage, to submit true and accurate certified payroll records, and to register and pay apprentices appropriately.

Some of the 2022 enforcement actions include citations against the following construction companies:

  • Rochester Bituminous Products, Inc., and its owners, President, Thomas Russo, Manager, Albert Todesca, and Treasurer, Michael P. Todesca, were issued 25 citations totaling more than $1.2 million in restitution and penalties for prevailing wage violations and failing to submit certified payroll records. The violations occurred on various public projects, including projects for the City of Boston, Town of Mattapoisett, Boston Water & Sewer Commission, as well as Abington, Bridgewater, Canton, Plymouth, Sharon, and Weymouth.
  • Superior Carpentry, Inc., and its President, Fernando Barroso, and Vice President, Felipe Drumond, were issued five citations for over $540,000 in restitution and penalties for failure to pay prevailing wages and for submittal of false payroll records to awarding authorities on public projects at the Middleborough and Westport police stations.
  • Railworks Track Systems, Inc., will pay more than $220,000 in restitution and penalties for failing to pay the proper overtime rate to workers, failing to properly account for different hourly rates of pay earned by employees during the same work week, and failing to submit true and accurate payroll records for work performed on public works projects in Hyannis, Falmouth. Framingham, Great Barrington, Lee, Lenox, Pittsfield, Sheffield, and Stockbridge.
  • Gonza Construction Inc. was issued five citations totaling $143,000 in restitution and penalties for prevailing wage, record-keeping, earned sick time, and paystub violations on a public project in Stoughton.

(Read More)

NJDOL Uses Expanded Powers to Stop Worker Exploitation at Job Sites

Posted by National Alliance for Fair Contracting on

August 17, 2022

NJDOL Uses Expanded Powers to Stop Worker Exploitation at Job Sites
Authority Extended Three Years Ago Helps Curtail Wage, Benefits Violations & Misclassification

TRENTON – In the three years since Governor Murphy signed a law expanding NJDOL’s powers to stop work on a job site when there is strong evidence workers are being exploited, the department has issued 71 stop-work orders, through which agents found nearly $1 million in back wages owed to 235 workers.

The law gave NJDOL’s Division of Wage and Hour and Contract Compliance the power to immediately halt work at any public or private work site – both construction and non-construction sites – when an initial investigation finds evidence that the employer has violated any state wage, benefit or tax laws.

“With the authority to issue stop-work orders as soon as we identify a violation, the NJDOL gained the ability to shut down a job when it finds workers are being exploited,” said Labor Commissioner Robert Asaro-Angelo. “The legislation signed by Governor Murphy in the Summer of 2019 has given NJDOL a powerful enforcement tool to uphold its mission of protecting our workforce, strengthening our businesses, and promoting the dignity of work.”

The most common violations leading to stop-work orders are: employers not having workers’ compensation insurance or misclassifying employees as independent contractors. Other examples include employers who fail to pay prevailing wage or overtime; those who have outstanding judgements against them; or those whose workers were not paid, were paid late or were shorted, or were paid in cash off the books. Often, these unscrupulous employers have not made their required contributions to the state unemployment trust fund, from which unemployment payments are drawn.

Prior to the law’s enactment, the NJDOL had little recourse to stop or prevent violators from shirking these policies. Work stoppages were rarely utilized because they could be applied only in cases when an employer amassed a history of violations. This made stopping out-of-state violators doing work in New Jersey particularly difficult, as they often left the state before the department could enforce state regulations.

Stop-work orders have been used to shut down work sites of all types, such as construction jobs, restaurants, an internet radio station, and medical offices. Typically, stop-work orders are resolved in a matter of a few days, and are often resolved on the spot when the order is delivered to a business – as was the case in August 2021 when the NJDOL issued stop-work orders to four separate businesses for wage violations, with each business paying the back wages owed to their workers immediately to avoid closure.

(Read More)

Investigation Recovers $246k In Back Wages for 306 Painters, Drywall Workers Denied Overtime by Misclassification as Independent Contractors

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: August 4, 2022
Release Number: 22-1562-DAL

​​​​​​​Department of Labor finds errant pay practices hurt workers jointly employed

NEW ORLEANS – The U.S. Department of Labor has found that the wages of hundreds of painters and drywall workers employed by a Louisiana contractor on construction projects, including work at New Orleans’ Superdome, were tackled for a loss when their employer misclassified the workers as independent contractors, a common industry violation.

Investigators with the department’s Wage and Hour Division found that PL Construction Services misclassified its workers as independent contractors. Many of the employees worked on projects involving Lanehart Commercial Painting – operating as Lanehart – including work at the Superdome. PL Construction Service paid the misclassified workers straight-time rates for all hours, including those over 40 in a workweek which violated the Fair Labor Standards Act’s overtime regulations. They also failed to maintain complete and accurate records of hours their employees worked, another FLSA violation.

The division determined that during the investigation period, a joint employment relationship existed between PL Construction Services and Lanehart for workers employed on Lanehart projects. Among other factors, they found the following conditions:

PL Construction Services employees worked almost exclusively for Lanehart.
At work sites, Lanehart supervised PL Construction Services’ workers, determined the number of workers needed and when, and kept records of hours PL Construction Services’ employees worked.
PL workers’ labor was essential to Lanehart’s operations and occurred on Lanehart’s projects.
The investigation led to the recovery of $246,570 in overtime back wages for 306 employees. Lanehart paid $199,342 to 243 employees for which the division found them jointly liable. PL Construction Services paid the remaining balance of $47,228 to 76 employees.

PL Construction Services LLC is based in St. Rose, and Lanehart Inc. is based in Baton Rouge.

“Too often we find workers denied wage protections such as the right to overtime pay and other benefits – including unemployment insurance, workers’ compensation and health insurance – by employers who misclassify them as independent contractors,” said Wage and Hour District Director Troy Mouton in New Orleans. “Our investigation shows the costly consequences employers face when they or their subcontractors fail to comply with the law. When we determine a joint employment relationship exists, the Wage and Hour Division will hold all responsible employers accountable for the violations.”

(Read More)

Jersey City electrical subcontractor underpaid workers by nearly $800K in wages, benefits: feds

Posted by National Alliance for Fair Contracting on

By Ron Zeitlinger | The Jersey Journal
May 13, 2022

A Jersey City electrical subcontractor on a federally funded residential townhome and apartments project in Paterson underpaid 11 electricians by a total of nearly $800,000 in wages and benefits, a federal investigation found.

Deen Electrical Contractors Inc. misclassified the workers at the Riverside Townhomes and Senior Apartments public housing project and paid them as laborers, in violation of the Davis-Bacon and Related Acts, Department of Labor officials said. By doing so, Deen underpaid the electricians for work on the project that was funded through the U.S. Department of Housing and Urban Development.

The investigation by the U.S. Department of Labor’s Wage and Hour Division led to the recovery of $799,479 in back wages for the 11 electricians.

“Contractors and subcontractors on federally funded projects are legally obligated to accurately identify workers on work sites, pay them the local prevailing wages and fringe benefits and submit weekly certified payroll records to the contracting agency.” Wage and Hour Division District Director Paula Ruffin said.

Officials said that when the federal investigation was completed, Deen Electrical paid the back wages promptly.

Based in Jersey City, Deen Electrical Contractors Inc. has been a family-owned and operated contractor for more than 30 years, serving commercial builders, residential owners and performing work under state and federal contracts in North Jersey and the surrounding area, federal officials said.

Contractors and subcontractors on federally funded projects are required to properly identify workers and pay them the applicable prevailing wage rate, in addition to submitting weekly certified payroll records to the contracting agency. They are also required to post the Davis-Bacon poster on the job site.

(See Article)

1200px-DOL_WHD_logo.svg

PRIME CONTRACTOR ON NEW YORK FEDERAL RESERVE BANK PROJECT PAYS $420,335 IN BACK WAGES AFTER U.S. DEPARTMENT OF LABOR INVESTIGATION (NY)

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: March 29, 2019
Release Number: 19-0440-NEW

NEW YORK, NY – Tishman Interiors Corp. – the prime contractor for a renovation project at the Federal Reserve Bank of New York – has paid $420,335 in back wages to resolve violations of federal wage laws following a U.S. Department of Labor Wage and Hour Division (WHD) investigation.

WHD found Tishman, which served as the bank’s construction manager on the federally funded project, violated the Davis-Bacon and Related Acts (DBRA), the Contract Work Hours and Safety Standards Act (CWHSSA), and the Copeland Act. The company subcontracted electrical and cable installation work to subcontractors Alan Joel Communications, Crewforce, and Teksystems Management.

Investigators found the bank failed to include DBRA provisions and required wage rates in its contract with Tishman. This omission led to Tishman and the three subcontractors paying their employees at hourly rates lower than the prevailing wages for the work they performed, a DBRA violation. WHD also found all four employers violated the CHWSSA when they failed to pay required prevailing wages for overtime when employees worked more than 40 hours in a workweek. Their failure to prepare and maintain certified payroll records and to sign compliance statements in the payrolls resulted in Copeland Act violations.

(Read More)

unnamed

Winchester construction company failed to pay workers minimum wage (MA)

Posted by National Alliance for Fair Contracting on

Posted Aug 1, 2018 at 5:46 PM

A Winchester construction company J. Donlon and Sons Inc. has paid more than $121,000 in wages and penalties for violating the Massachusetts prevailing and minimum wage laws by failing to properly pay workers on a Medford public works project, Massachusetts Attorney General Maura Healey announced today. The company is located at 86 Cross St. in Winchester.

“This company and its owners gained an unfair advantage by cheating their workers out of the wages they earned,” said Attorney General Healey in a press release announcing the settlement. “With this settlement, we are sending a message that there are serious consequences to breaking our laws.”

J. Donlon and Sons Inc.’s owner Joseph M. Donlon Sr., and his two sons Joseph M. Donlon Jr. and Sean Donlon, were cited for intentionally failing to pay prevailing wage, failing to submit true and accurate certified payroll records, failing to pay the state minimum wage and failing to maintain true and accurate general payroll records from January 2012 through December 2016, according to the release. As part of the settlement, the company and all three corporate officers are prohibited from bidding or working on any public works construction project in Massachusetts for 10 years.

The attorney general’s Fair Labor Division began investigating J. Donlon and Sons after a former employee submitted a complaint alleging he was not paid the proper prevailing wage rate for work performed on a city of Medford utility trench patching public works project. According to the release, the attorney general’s office determined that employees on the project were paid far less than the established prevailing wage rate. During one three-year period, for example, employees were paid an hourly rate of between $8 and $20 when they should have been paid between $51.35 and $54.10 per hour.

The company also submitted certified payroll records to the city of Medford during certain years that listed only members of the Donlon family as having worked on the project and omitted other employees, the attorney general’s office stated. The investigation found that general payroll records were also inaccurate, and two employees were paid less than the applicable minimum wage.

(Read More)