California passes AB 2358 aiming at discrimination & harassment in Building & Construction Trade Apprenticeships

Posted by National Alliance for Fair Contracting on

By Andrea Matsuoka | October 24, 2018

California Governor Jerry Brown recently signed AB 2358, a bill that seeks to address potential discrimination and harassment in building and construction trade apprenticeship programs. While AB 2358 contains broad anti-discrimination language, it was designed to encourage women in particular to pursue building and construction careers, beginning with apprenticeships.

AB 2358 expressly prohibits discrimination in building and construction trade apprenticeship programs on the basis of enumerated categories including sex, gender, race, national origin, religious creed, and disability. AB 2358 also requires these apprenticeship programs to affirmatively promote equal opportunity in several ways:

  • Programs must include an equal opportunity pledge in their apprenticeship standards, publications and bulletin boards; incorporate equal opportunity policies into orientations and information sessions; and provide equal opportunity notices to contractors annually.
  • Programs also must provide interactive anti-harassment and anti-discrimination training to all apprentices, instructors, and employees and implement procedures for handling and resolving complaints of harassment or discrimination.
  • Programs must designate one or more individuals to monitor all apprenticeship activity for equal opportunity compliance and to maintain compliance records, in order to promote coordination and accountability.

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Should workers report underground businesses?

Posted by National Alliance for Fair Contracting on

November 08, 2018

In addition to government, which is defrauded of tax revenue, workers are often a casualty of the underground economy. Underground businesses are not likely to expend effort to protect workers from occupational hazards, much less comply with federal and state workplace safety rules. And given that a great deal of underground employment involves physically taxing and highly hazardous work, the risk of injury and death far exceeds what is typical in a law-abiding business.

While the risk may be worth it for individuals who cannot find employment with a legitimate business, government still urges workers to report businesses that operate outside the law. For example, California’s Labor Enforcement Task Force (LETF) notes that its enforcement efforts benefit greatly from leads from the public. The LETF, in fact, lists the kind of information that makes for a good lead, and the better the information, the better the chance the lead will be investigated quickly.

$385 billion tax gap

California’s Employment Development Department (EDD) says that the term underground economy refers to “those individuals and businesses that deal in cash and/or use other schemes to conceal their activities and their true tax liability from government licensing, regulatory, and taxing agencies. Underground economy is also referred to as tax evasion, tax fraud, cash pay, tax gap, payments under-the-table, and off-the-books.”

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OSHA

The Occupational Safety and Health Act of 1970 gives employees and their representatives the right to file a complaint and request an OSHA inspection of their workplace if they believe there is a serious hazard or their employer is not following OSHA standards. Workers do not have to know whether a specific OSHA standard has been violated to file a complaint. The complaint should be filed as soon as possible after noticing the hazard or lack of compliance because OSHA citations may only be issued for violations that currently exist or existed in the past 6 months.

“Complaints from workers or their representatives are taken seriously by OSHA,” says OSHA. “OSHA will keep your information confidential.”

A good lead

The LETF says it focuses on low-wage industries and high-hazard occupations but, regardless of the industry sector, will review all reported cases of unlawful activity and “handle each case appropriately.”

“You may remain anonymous when you make your report,” states the LETF. “However, if you leave your contact information, we can ask follow-up questions, which may determine whether we are able to investigate the lead or not.”

If there is uncertainty about whether an employer is breaking the law, the LETF says answers to the following questions will help:

  • Is the employer providing itemized statements to employees?
  • Is the employer paying minimum wage and overtime?
  • Does the employer have a valid workers’ compensation insurance policy?
  • Does the employer provide a safe working environment for employees?
  • Is the employer correctly reporting wages to the EDD and paying payroll taxes?
  • Is the employer operating with the appropriate licenses or registration?
  • Is the employer correctly classifying workers as employees versus independent contractors?

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Sacramento latest city to mandate local hiring (CA)

Posted by National Alliance for Fair Contracting on

By Kim Slowey
Aug. 23, 2018

Dive Brief:

  • The Sacramento City Council voted Tuesday to amend its city code and adopt the contentious, according to the Sacramento Bee, Local Hire and Community Workforce Training Program, which requires contractors to use a 50% local workforce on most city-funded projects of $1 million or more.
  • The program also requires that 20% of apprentices on covered projects be “priority apprentices,” who live in economically disadvantaged areas or are veterans, prior offenders, recipients of public assistance, foster youths, homeless or women. The new ordinance also requires that 50% of the budgets for two major city projects, including the renovation of the Sacramento Convention Center, be spent with local businesses in certain counties and that 15% of those businesses be small, regional enterprises.
  • In the sample agreement included on the city council’s agenda is “Contractor(s) performing construction work on the project described in the agreement shall, in filling craft job requirements, utilize and be bound by the registration facilities and referral systems established or authorized by the local unions,” a provision which some nonunion contractors argue will hinder their participation in city work. Proponents of the agreement, however, said that nonunion contractors perform around 60% of city work and that nonunion workers can simply register with the unions so that they can be included in the local hire program.

Dive Insight:

Unlike some other local hire mandates, Sacramento’s gives contractors an out of sorts by allowing them to hire from any source if unions cannot provide them with the necessary workers within 48 hours of a request. On the other end of the spectrum was the Detroit workforce requirement for contractors performing services during construction of the Little Caesars arena. The city fined construction companies that didn’t meet the 51% local hire requirements a total of $5.2 million. The Sacramento ordinance does not include such punitive measures for failing to meet the goals.

(Read More)

San Francisco to expand background checks on contractors after deadly tunnel accident (CA)

Posted by National Alliance for Fair Contracting on

By Kim Slowey
Aug. 22, 2018

Dive Brief:

  • San Francisco Municipal Transportation Agency officials have promised, according to the San Francisco Chronicle, that they will make background checks into contractors that want to do business with the city more robust following the death of a signal technician employed by Shimmick Construction who had been working on the $40.9 million Twin Peaks Tunnel Improvement project. The agency awarded the contract for the project to the Shimmick/Con-Quest Joint Venture in February.
  • As part of the agency bidding and contracting process, construction companies are required to complete a pre-bid questionnaire that asks if they have been cited by Cal-OSHA for any serious and willful citations in the previous 10 years. Shimmick allegedly responded “no” to that question, and a Shimmick representative told the Chronicle that its answers on the city’s questionnaire were accurate. An analysis of Cal-OSHA records by the Chronicle, however, revealed that the company had received multiple safety violation citations in that period of time, many of which the company is protesting, including one involving a November 2016 death and an excavation-related incident for which the company received a serious/willful citation.
  • The increased scrutiny of contractors and their histories comes at the order of San Francisco Mayor London Breed who called for a “better system of checks and balances” when hiring contractors to perform on large city contracts. Agency spokesman Paul Rose told the Chronicle the SFMTA expected the Twin Peaks project to be completed on time and that it still planned to use Shimmick on future agency projects. The San Francisco Examiner yesterday reported that SFMTA Director Ed Reiskin reportedly defended the agency’s choice of contractor, calling Shimmick reputable.

Dive Insight:

States and municipalities typically require contractors to fill out a mountain of paperwork, but construction companies presenting false information on questionnaires or other qualification statements risk being debarred from doing business with an agency that determines they intentionally gave false answers or misrepresented mandatory qualifications having to do with elements of their businesses like work experience or financial capacity.

(Read More)

San Jose High-Rise Contractor Pays $250,000 Over Alleged Wage Theft, Labor Trafficking (CA)

Posted by National Alliance for Fair Contracting on

by Dominoe Ibarra
July 23rd, 2018

The builder of a downtown San Jose apartment tower shelled out $250,000 to workers to settle labor violations alleged by federal investigators. Full Power Properties LLC-the builder that succeeded KT Urban on the the 650-unit Silvery Towers project-owed the money to 22 workers, the U.S. Department of Labor (DOL) announced last week.

Investigators found that Full Power Properties profited off underpaid workers employed by Job Torres, a subcontractor doing business as Nobilis Construction. During off hours, those workers lived in captivity, in a squalid warehouse run by Torres.

Acting on a tip that Hayward-based Nobilis Construction used undocumented workers as slaves, agents from the U.S. Department of Homeland Security served search warrants at multiple sites in August of 2017, took Torres into federal custody and referred the case to the DOL’s Wage and Hour Division.

Investigators say they found that Torres kept workers in a cramped second-story loft hidden behind a wall, with wood bunks and no running water. Torres allegedly locked the door from the outside, which led investigators to conclude that the workers were being held against their will.

According to the feds, Torres smuggled workers in from Mexico and would threaten them into submission by mentioning to anyone who complained that he knew people from drug cartels. The construction boss allegedly collected contact information for each worker’s family “in case of emergency,” so he knew where their loved ones lived.

There were signs of trouble long before federal investigators began looking into claims of forced labor in February of 2017. Silvery Towers developer KT Urban, which enjoyed tax breaks from the city to incentivize the project, came under fire in 2016 for hiring non-union workers, prompting a series of protests by local labor unions.

(Read More)

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DRYWALL CONTRACTOR FINED $2 MILLION; IS CALIFORNIA WAGE THEFT RAMPANT? (CA)

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By Jane Mundy
August 10, 2018

THE CALIFORNIA LABOR COMMISSIONER’S OFFICE FINED A DRYWALL COMPANY $2 MILLION FOR WAGE THEFT-SPECIFICALLY FAILING TO PROPERLY COMPENSATE WORKERS FOR REST PERIODS, OVERTIME AND SOME WORKERS FOR NOT PAYING MINIMUM WAGE.

Los Angeles – After workers at Fullerton Pacific Interiors Inc., complained about California labor law violations to the non-profit Carpenters Contractors Cooperation Committee, the California Labor Commissioner’s Office stepped in. Investigators found that the drywall company paid a daily rate that didn’t include overtime hours or rest breaks and 28 workers were not even paid minimum wage. Fullerton was fined nearly $2 million for wage theft violations.

The work included taping and drywall installation at hotels, recreation centers and casino projects in Los Angeles, Orange and San Bernardino counties between August 2014 and June 2016. According to the citation, Fullerton failed to properly compensate 472 workers for rest periods and 289 workers were not paid for overtime, along with other wage violations. California state Labor Commissioner Julie Su said in a statement that, “In construction, unscrupulous contractors attempt to obscure their wage theft by paying workers a flat rate rather than for all hours worked. But a daily or other flat rate system does not take the place of minimum wage and overtime obligations.”

THE $2 MILLION FINE

This is how the wage theft fine was calculated. $1,892,279 payable to the workers was broken down as follows:

* $798,664 for rest period violations. Most workers in California are entitled to a paid 10-minute break for every four hours worked, or paid for an extra hour at their regular rate. Fullerton’s workers were allowed a 30-minute lunch “hour” but did not receive rest breaks.

* $386,685 for unpaid overtime.

* $692,500 for wage statement violations.

* $14,431 for the unpaid wages, liquidated damages and waiting time penalties. Workers paid less than minimum wage are entitled to liquidated damages that equal the unpaid wage plus interest. There are also penalties for waiting times that are calculated based on taking the employees wages and multiplying it by the days they waited for compensation, at a maximum of 30 days.

* $72,400 civil penalty: The company would also be on the hook for civil penalties of $50 per work day for the initial violation, which increases to $100 for subsequent pay periods.

(Read More)

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Former Wessman Development LLC could owe Kimpton project workers more wages (CA)

Posted by National Alliance for Fair Contracting on

Amy DiPierro
Palm Springs Desert Sun
Published 10:53 a.m. PT
Sept. 10, 2018

Kimpton Hotel and other real estate developments in downtown Palm Springs are subject to a prevailing wage, a state agency has found, due in part to more than $140 million in city funding and projected tax rebates to the complex. The California Department of Industrial Relations’ determination means the developer of the projects could owe untold amounts of additional wages to workers who built the hotel and shopping district.

The DIR’s August 13 letter, which determined the downtown project is subject to prevailing wage, could sully a tony new development that city officials have hailed for revitalizing the downtown corridor, even after the original developer of the project was charged with allegedly bribing city officials for a sweetheart deal.

Palm Springs Promenade LLC, the limited liability company formed by Wessman Development to build the Kimpton and Virgin hotels as well as office and retail space, received $46 million in city funding and could receive an additional $100 million in potential transient occupancy tax refunds, according to a detailed review of city contracts by DIR.

The prevailing wage rate is the hourly wage paid to a majority of like workers on public works projects in the same place or labor market. Essentially, a prevailing wage is a minimum wage for specific types of workers, when they work on projects that benefit from public funds.

While some cities exempt publicly-funded projects from prevailing wage because of their benefits to residents, DIR Acting Director André Schoorl concluded in the agency’s determination that the downtown complex is not exempt, because the project is neither built, owned nor operated by the city and has the primary purpose of private profit.
“The city’s decision to subsidize the profit margin of (a) private landowner in the city’s downtown is not equivalent in purpose, scale, or function, to the purely municipal acts of building a local fire station or fencing for a reservoir,” Schoorl wrote.

The DIR determination means construction workers that built the Kimpton and other downtown structures could get a boost if wages are found to be owed. Workers and other interested parties may file a complaint with DIR, according to the agency, which would then trigger an investigation into whether workers have already received the correct prevailing wages or not.

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California charter cities can pass laws exempting locally-funding public works projects from state prevailing wage law if they are deemed to be purely “municipal affairs,” like a fire department or library.

But in an August 13 letter, DIR Acting Director André Schoorl noted the hotel and shopping development built by Palm Springs Promenade “has no such obvious public purpose” that would make it exempt from paying prevailing wage. And while the city sought to incentivize developers to invest in blighted properties downtown, Schoorl concluded construction in downtown Palm Springs “was primarily undertaken for private benefit and profit, with a subsidiary goal of removing blight.”

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The Center for Contract Compliance, a nonprofit labor advocate founded by contractors unions, in January 2017 requested DIR review whether the downtown project is subject to prevailing wage.

Although DIR determinations do not set a precedent – meaning it is advice given to a specific project, not a precedent applying to subsequent cases – Center for Contract Compliance Executive Director Branden Lopez said the reasoning in the Palm Springs Promenade case could apply to other jobs, too.

“The reasoning in the case, it applies statewide if they have similar facts,” he said.

Multiple cities in California have subsidized proposed hotel developments on a case-by-case basis. Additionally, according to research commissioned by the city of Long Beach in May 2017, at least five cities and one county in California, including Cathedral City and Palm Springs, have formal economic incentive programs for hotels.

(Read More)

Register Now – 20th Annual NAFC Conference, August 19-22, 2018 – San Diego, CA

Posted by National Alliance for Fair Contracting on

July 2018

It’s our 20th Anniversary! Save the date and join NAFC at our upcoming Annual Conference in sunny San Diego, CA. The Conference will be held at the Hilton San Diego Bayfront Hotel, in downtown San Diego. This year’s Conference will be jointly sponsored by the Center for Contract Compliance and will have a national as well as a California specific focus. The NAFC National Conference is attended by 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 NAFC’s Conference Page)

(Download Joint Conference Registration Form)

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Contractor Hired by San Diego Firm to Pay $1.1M for Wage Theft (CA)

Posted by National Alliance for Fair Contracting on

POSTED BY ALEXANDER NGUYEN
ON JULY 9, 2018 IN BUSINESS

State labor regulators secured more than $1.1 million in wages and penalties from the settlement of a case involving a Long Beach construction project, it was announced Monday

Labor officials alleged that Newport Beach-based Champion Construction Inc., a drywall and framing contractor hired by San Diego general contractor TB Penick for the Browning High School construction project, maintained false payroll records over a six-month period to cover up wage theft affecting 103 workers who were not paid wage and fringe benefits.

California’s wage laws hold general contractor TB Penick jointly liable for the violations of its subcontractor Champion, state Labor Commissioner Julie Su said.

“Prevailing wages create a level playing field for all contractors bidding on public construction projects,” Su said. “This case clearly demonstrates that general contractors who select contractors that don’t play by the rules will pay a heavy price. Under the law, they are responsible for the wage theft of their subcontractors.”

The Labor Commissioner’s Office opened its investigation after receiving a report from the Carpenters Contractors Cooperation Committee in March 2016 alleging public works violations. The investigation included interviews with more than 30 workers, site visits and an audit of pay records for the dozens of workers involved in the project, Su said.

(Read More)

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Orange County DA to crack down on contractors breaking wage laws (CA)

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By Heather Yakin
Times Herald-Record
Posted Jun 25, 2018 at 11:02 AM

GOSHEN – Lowball wages. Skimping on benefits. Fudging workers’ job titles. Paying off the books.

These are a few of the strategies unscrupulous contractors use to skirt New York’s prevailing wage laws on public projects. Orange County District Attorney David Hoovler says his office will crack down on the illegal practices this summer. Investigators will visit public-works job sites throughout the county to make sure contractors are complying with prevailing wage requirements.

“Prevailing wage laws are designed to protect workers from unscrupulous public-works contractors, so that those workers are paid a decent wage and provided with decent benefits,” Hoovler said. “Dishonest contractors, however, in an effort to make that extra buck, often illegally undercut the required prevailing wages and benefits, to the detriment of the honest workers that they have hired.”

In May, the Orange County District Attorney’s Office joined government agencies in the lower Hudson Valley, New York City and Long Island in the regional Wage Theft Task Force. The task force aims to ferret out and stop employment crimes including violations of the prevailing wage laws that govern public contracts.

New York law sets minimum wages and minimum fringe benefits that contractors must pay and provide to workers on county, municipal and other public-agency construction. Those minimum standards are meant to be comparable to the wages and benefits generally paid to construction industry workers.

A contractor’s failure provide prevailing wage violates state Labor Law, and is punishable by criminal sanctions including fines, imprisonment, and a contractor being barred from bidding or working on public-works projects.

(See Article)