Labor Commissioner’s Office Cites Oakland Construction Company Over $3.5 Million for Wage Theft Violations (CA)

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NEWS PROVIDED BY
California Department of Industrial Relations
Jul 25, 2017, 15:43 ET

OAKLAND, Calif., July 25, 2017 /PRNewswire-USNewswire/ — The Labor Commissioner’s Office cited an Oakland contractor more than $3.5 million in wages and penalties for multiple wage theft and labor law violations. Attic Pros is ordered to pay $2,109,480 in wages, liquidated damages and waiting time penalties for 119 workers who were misclassified as independent contractors, and $1,481,600 for civil penalties.

“This is an egregious case of wage theft, with workers misclassified and denied a just day’s pay,” said Labor Commissioner Julie A. Su. “My office enforces California’s labor laws to stop employers willing to cheat employees of their pay as a means to gain an unfair advantage over their law-abiding competitors.”

The Labor Commissioner’s Office launched its investigation of the company and its owner, Leonid Molchanov, after receiving a Private Attorneys General Act claim. Investigators found that Attic Pros’ employees worked 10-14 hours per day up to six days a week, and were paid a daily rate regardless of the actual number of hours worked-putting their earnings below minimum wage.

Su ordered Attic Pros to pay $191,400 in unpaid minimum wages, $321,330 in unpaid overtime wages, $191,400 in liquidated damages on unpaid minimum wages, $1,405,350 in waiting time penalties, and $1,481,600 in civil penalties for minimum and overtime wage violations, wage statement violations and employee misclassification. The citations were issued for violations that occurred during the 32-month period from July 2014 to March 2017.

When workers are paid less than minimum wage, they are entitled to liquidated damages that equal the amount of underpaid wages plus interest. Waiting time penalties are imposed when the employer fails to provide workers their final paycheck after separation. This penalty is calculated by taking the employee’s daily rate of pay and multiplying it by the number of days the employee was not paid, up to a maximum of 30 days. The civil penalties collected will be transferred to the State’s General Fund as required by law.

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Opinion Build more affordable housing, but don’t stiff construction workers in the process (CA)

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Robbie Hunter, Sacramento
The writer is president of the State Building Construction and Trades Council of California.

July 17, 2017, 9:10 am

To the editor: Your editorial is wrong to suggest that removing the requirement in SB 35 that workers be paid the prevailing wage – the common wage paid to construction workers in any given area – will somehow ease the affordable housing crisis in California. Instead, it would help drive more than 400,000 construction workers and their families out of the shrinking blue-collar middle class. Try supporting a family of four in California on a residential construction worker’s average pay of around $42,000 on prevailing wage projects. (“Affordable housing at an impasse,” editorial, July 22)

Removing the prevailing wage mandate would force the families of plumbers, carpenters and other construction workers to compete in the underground economy where developers hire workers from street corners and pay no state or federal tax, no Social Security, no Medicare and of course no benefits. We cannot obtain affordable housing by driving millions more Californians into poverty.

Labor makes up about 15% of the total cost of any given prevailing wage residential project. Construction workers are not driving the housing shortage. The real culprit is the greed of developers and speculators. We see no editorials to curtail their massive profits.

Does anyone really believe that the money saved from restricting construction workers’ pay will wind up anywhere other than in developers’ pockets?

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Prevailing wage, project labor agreements protect living standards for construction workers

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By ROBBIE HUNTER
July 6, 2017 at 12:01 am

In an era of political hyperventilation, it might be a good idea for some critics to take a deep breath before they launch into their attacks on the prevailing wage laws and project labor agreements that protect the living standards of construction workers in California and across the nation.

From Washington, D.C., to Los Angeles, anti-union writers in recent weeks have incorrectly branded the 1931 Davis-Bacon Act that wrote the prevailing wage into the law on taxpayer-funded construction projects as born of racism and a rip-off of public funds. The same critics also have falsely characterized project labor agreements as costly to taxpayers and unfair to nonunion construction companies.

Now, for the facts.

Two Republican congressmen, Sen. James Davis of Pennsylvania and U.S. Rep. Roger Bacon of New York, sponsored their legislation 86 years ago to establish a minimum wage on taxpayer-funded construction projects, based on local measures of central tendency in any of the covered construction trades.

The idea behind the prevailing wage is to keep unscrupulous operators from low-bidding the legitimate competition to the detriment of the local workforce. The effect has been to allow blue-collar workers – 400,000 of whom are represented by the State Building and Construction Trades Council of California – to maintain their place in the American middle class.

Of the false charges that have been lodged of late about Davis-Bacon, perhaps the most repugnant is the smear that recirculates every so often that the act originated as an outgrowth of racism. The critics troll through the historic record to quote some congressmen in the debate over Davis-Bacon who supported the law based on their own warped view that it was designed to protect higher-paid white workers in the northeast represented by the authors of the law from “cheap colored labor” that would be imported to their districts from the South. The critics fail, however, to report Congressman Bacon’s reply that imported workers came in white skin as well as black.

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California Labor Commissioner Citation of General Contractor for Subcontractor’s Wage Theft Affirmed

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SOURCE California Department of Industrial Relations, California Labor Commissioner’s Office
Jun 29, 2017, 17:32 ET

LOS ANGELES, June 29, 2017 /PRNewswire-USNewswire/ — California Labor Commissioner Julie A. Su issued citations of $249,879 against Irvine-based general contractor Deacon Corporation, along with its subcontractor, Lafayette-based Champion Constructions, Inc.

This is the first time that the Labor Commissioner has held a general contractor responsible for wage theft by its subcontractor by issuing citations under AB 1897 (section 2810.3 of the Labor Code), signed by Governor Brown in 2014, which took effect on January 1, 2015.

Champion, a drywall and framing contractor hired by Deacon for the Cambria Hotel construction project in El Segundo, shorted 47 workers. The Champion employees worked an average of 10 hours a day, five days a week and were unpaid for four weeks.

“This case addresses the pervasive problem of wage theft in subcontracted industries,” said Labor Commissioner Julie A. Su. “Businesses at the top of the contracting chain that profit from workplace violations can no longer escape legal liability by hiding behind their subcontractors, even if they did not control the work performed or know about the violations.”

The wage theft came to light after several of Champion’s workers walked off the job on June 16, 2016, and filed wage claims at the Labor Commissioner’s Office in Long Beach for nonpayment of wages.

The Labor Commissioner’s investigation revealed that Champion paid the workers from an account with insufficient funds and then skipped several pay periods for the majority of the workers. Investigators also learned that Champion failed to pay overtime wages to many of the workers, who worked up to 2 hours overtime a day.

The Labor Commissioner’s Office last August issued citations against both Deacon and Champion totaling $279,151 in unpaid overtime and minimum wages, waiting time penalties, rest period premiums and civil penalties for work performed from May 8, 2016 to June 16, 2016. A demand letter was also issued in August for $50,466 to request payment of the contract wages, which is the difference between minimum wage and the wages promised to the workers when contracted for the job.

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Drivers Strike Against XPO Logistics in Latest Misclassification Fight

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RYAN ZUMMALLEN
JUNE 19, 2017

Every day Jose Herrera picks up his Kenworth T600 truck from a rented lot in Moreno Valley, Calif., and fights traffic on the 60 Freeway to the office of his employer, XPO Logistics, 70 miles away in Commerce.

The commute puts wear and tear on the vehicle, leads to pricey fuel bills and accelerates the maintenance schedule. But Herrera doesn’t have a choice. XPO, one of the largest shipping companies in the world, doesn’t allow drivers who own their trucks to park overnight at that location, he said.

“You have to spend more money to keep the truck going,” Herrera said.

Herrera was one of about a dozen drivers on a picket line in front of the XPO office Monday. The strike involves more than 150 drivers at XPO’s Commerce location, said Santos Castaneda, an organizer with the International Brotherhood of Teamsters, which is lending support. Drivers also struck at XPO locations in nearby Rancho Dominguez and farther south in San Diego.

It’s the latest effort from drivers to put pressure on shipping companies in the ongoing nationwide dispute over driver claims that they are misclassified as independent contractors rather than employees of the company. Monday’s strike is the 15th at Los Angeles ports in the last four years.

“There has been no impact to customers,” said Erin Kurtz, a spokesperson for XPO.

“We know firsthand that the majority of owner-operators prefer to work as independent contractors, and we will continue to advocate for their right to do so,” XPO said in a statement.

Truckers have filed more than 800 employee misclassification wage claims since 2011 and have been awarded about $40 million over 300 cases, according to the California Labor Commissioner’s office. About 200 cases are still pending, according to the state agency.

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VIDEO: South Bay construction workers demand higher wages, local hiring (CA)

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By Vince Cestone, KRON and Rob Fladeboe
Updated: May 31, 2017, 4:20 pm

SAN JOSE (KRON) – South Bay construction workers are demanding that developers hire locally and pay fair market wages.

Construction is booming in downtown San Jose. There are several new high rises going up, and while that means more badly needed housing and property taxes, one group is feeling left out of the boom-local construction workers.

Plumbers and pipe fitters from Local Trade Union 393 picketed Wednesday at the construction site of the silvery towers luxury condominium high-rise project going up in downtown San Jose.

They’re upset that the developer of this and other such projects are not hiring local workers, and they’re not paying the prevailing wage.

“It’s bad not just for our workers like the ones here, it’s also bad for the local economy because those workers who are working these jobs are taking their paychecks, going back to Texas or some other place, and they’re spending them there, and we think that’s got to stop,” South Bay Labor Council Executive Officer Ben Field said.

Union labor says “the last straw” was the recent approval of another residential condo project on the site of the former Greyhound bus depot. The developer has agreed to pony up $15 million in park fees and millions more for affordable housing and property taxes.

But the city cannot require the developer to use specific contractors or the payment of prevailing, union-scale wages.

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Op-Ed If residential builders pay prevailing wages it would help – not hurt – California’s housing crisis

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By Alex Lantsberg
May 19, 2017, 4:00 AM

California has a housing crisis. Supply has not kept pace with demand. Rents and home prices are soaring and many working families are being priced out of the market altogether.

The state Legislature is considering myriad ideas for reform. One that has generated a lot of push-back from the building industry is incorporating prevailing wage standards into more residential projects.

“Prevailing wage” refers to what’s generally paid to skilled craft workers in different regions. Based on local employer surveys, it includes hourly pay, benefits and training costs for dozens of different construction occupations. It sometimes, but not always, reflects union rates. Typically required on publicly funded construction projects, prevailing wages encourage contractors to compete based on workers’ skill, experience and productivity, as well as on innovative project management – not merely on who can pay their workers the least. Decades of peer-reviewed research have linked prevailing wages with higher-quality craftsmanship, more local hiring and lower poverty rates among construction workers.

Peer-reviewed research has linked prevailing wages with higher-quality craftsmanship, more local hiring and lower poverty rates among construction workers.
Some builders and developers falsely claim that paying prevailing wages would lead to higher housing prices and make the state’s affordability crisis worse. They’re wrong; they want to maintain a status quo that allows them to line their pockets at the expense of workers and taxpayers.

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Requiring higher wages would pay off in more home-building: Guest commentary

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By Murtaza Baxamusa
POSTED: 04/28/17, 9:50 AM PDT

 

For the second straight year, the California Legislature is considering cutting red tape for developers and builders in an effort to encourage construction of more housing. This approach suggests that the state’s affordable-housing crisis is entirely the result of too many regulations and too much public input inhibiting supply.

Not exactly.

A recent study analyzing industry and economic census data by Smart Cities Prevail (SCP) revealed that it takes 13 percent more workers to produce residential housing today than it did 20 years ago. And while construction profits have increased 50 percent more than the cost of labor or materials, inflation-adjusted wages for blue-collar construction workers have actually decreased by 25 percent.

As the saying goes, you get what you pay for. And by leading a race to the bottom for productivity and wages, the industry has helped create California’s housing crisis.

If we truly want to solve this problem, this dynamic needs to change.

There are more than a million Californians who work in construction. Yet many working Californians simply don’t make enough money to afford a roof over the head of their family.

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California’s middle-class job of the future: Road worker

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The state legislature’s approval of a massive infrastructure plan Thursday night promises a $50 billion investment in road and bridge repair over the next 10 years. That money is expected to drive a surge in the demand for construction workers and apprentices in California.

Andrea Bernstein – April 07 2017

The work will be funded primarily through a tax on gasoline and diesel fuel. Gov. Jerry Brown’s office points to a 2011 formula devised by the White House Council of Economic Advisers to estimate it will create about 65,000 jobs each year, many with middle-class employment, an area where the state has struggled to grow.

The workers in demand will be carpenters, cement masons, laborers, operating engineers and ironworkers, said Tom Holsman, CEO of the Association of General Contractors of California.

“Those are the ones that will be most impacted, and at present they’ve all been geared up for some time to accommodate the demand,” he said. “I think we are well-situated for the workload that will follow this revenue stream.”

Construction companies that get public works contracts in California are required to pay their employees what’s known as a “prevailing wage.” That’s made infrastructure work a solid middle-class career track that’s attracting young people who aren’t seeking four-year degrees.

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Tackling Wage Theft in Silicon Valley

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11/29/2016 10:55 am ET
Ruth Starkman

…
The Santa Clara County Wage Theft Coalition is currently working with The Workers Lab in Oakland on a phone app that will help workers more easily report wage theft from employers and work to recover their rightful payment. Complementing the Coalition, advocacy and the Workers Lab’s technology the Stanford Center for Facility Engineering (CIFE) is leading a team of subject matter experts and DataKind data science volunteers to take a ‘big data’ approach to spotlighting wage theft using employee demographic and employer violation data.

Recently, we sat down with Santa Clara University School of Law Adjunct Faculty member and Supervising Attorney of the Workers’ Rights Clinic of the Katharine & George Alexander Community Law Center’s, Ruth Silver Taube, CEO of The Workers Lab, Carmen Rojas, Data Scientist, Annamaria Prati and Stanford University Engineering PhD student, Forest Peterson to discuss fighting wage theft in Silicon Valley.

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