Union accuses contractors, owners of Amazon buildings of labor violations (VA)

Posted by National Alliance for Fair Contracting on

By Patricia Sullivan
Dec. 12, 2019 at 2:10 p.m. EST

A union is charging that employers at six construction projects that will house Amazon employees or operations in Northern Virginia have evaded federal and state taxes by misclassifying workers, failing to carry workers’ compensation coverage and avoiding overtime pay.

In a 24-page report based on its own investigation, the Eastern Atlantic States Regional Council of Carpenters alleges multiple violations of federal labor law by general contractors, subcontractors and labor brokers who supply workers for projects owned and managed by four development companies and intended for Amazon.

(Amazon founder and chief executive Jeff Bezos owns The Washington Post.)

If true, the allegations would raise the profile of the issue of labor law violations in Virginia, a right-to-work state, just as Amazon is seeking approval before the Arlington County Board for building its own headquarters on property it has purchased in the Pentagon City neighborhood.

The board is scheduled to vote on that proposal on Saturday.

JBG Smith Properties, which owns three of the six properties that the union cites, said in a statement Thursday that it cannot respond to specific claims since it has not seen the union’s report.

“That said, when JBG Smith is made aware of these types of claims, it works closely with its general contracting partners to ensure they are rectified,” the statement said.

Owners of the other locations could not be reached for comment.

Three of the structures under renovation are temporary space for Amazon employees in Arlington until their permanent headquarters is built. A warehouse in Springfield and data centers in Manassas and Sterling are also cited.

(Read More)

Mendoza says she’ll withhold pay from capital plan contractors who don’t pay prevailing wage (IL)

Posted by National Alliance for Fair Contracting on

By Doug Finke
Posted Aug 13, 2019 @ 5:21 pm

Comptroller Susana Mendoza said Tuesday her office will monitor contracts awarded under the state’s new $45 billion capital program to ensure contractors are adhering to prevailing wage laws.

If someone doesn’t, Mendoza said, her office will take steps to halt any payments until the contractor comes into compliance.

“We know (prevailing wage) is the law, but not everybody follows it,” Mendoza said. “What we have is a $45 billion capital plan that we are about to embark on. Anything we can do to make sure that state taxpayer dollars are being utilized (in a way that) that state law says that they must is important to get the word out and educate the public.”

Mendoza said her office will monitor and conduct preaudits of contracts and grants awarded under the Rebuild Illinois capital plan. She said her office is prepared to receive complaints from people who are aware of prevailing wage violations and will also work with the Department of Labor on complaints it receives. Attempts will be made to bring a contractor into compliance, but if all else fails, the office has a nuclear option.

“What we have the ability to do that no other state agency or no other constitutional officer has the ability to do is withhold payment,” Mendoza said.

Mendoza acknowledged the problem of prevailing wage violations is not widespread.

“Every now and then we get complaints of folks who are in violation,” she said.

Mendoza said contractors with the state have to check a box on forms pledging to adhere to the prevailing wage, so the existence of the law should come as no surprise.

Some Republicans, notably former Gov. Bruce Rauner, believed the prevailing wage law forced up the cost of public works projects.

“I disagree with this being framed as bloated and higher costs,” said Illinois AFL-CIO President Michael Carrigan. “Prevailing wage is a product of collective bargaining. Unions and employers sit down and have hard negotiations across the table. Those are a product of negotiation.”

Former Comptroller Dan Hynes, who is now a deputy governor in Gov. J.B. Pritzker’s administration, signed a similar executive order in 2002. However, enforcement of the order has fallen off in recent years.

(See Article)

unnamed

Shady contractors jailed in Bay area and on Long Island (NY)

Posted by National Alliance for Fair Contracting on

June 20, 2019 – 11:47 AM CDT
BY MARK GRUENBERG

Minnesota isn’t the only state that’s cracking down on construction wage theft. New York is, too, and the feds did in Northern California.

The two cases from opposite ends of the country illustrate the prevalence of cut-rate contractors who routinely exploit their workers, especially immigrant workers, shorting them of pay and overtime, all to line the contractors’ own pockets and gain an edge over honest firms.

Their reward in these cases? Prison bars. In the California case, for a good long time.

In New York, contractor Vickram Mangru will serve a month in jail and three years of supervised probation for lowballing workers on Bronx school construction projects. His wife, Gayatri Mangru, drew a conditional discharge. Both have already repaid $80,000 in restitution for paying “far less than” prevailing wages to three workers from Dec. 22, 2012, to Valentine’s Day 2015 – and owe the workers another $201,630.09.

Both pled guilty earlier after a long investigation and charges from the state attorney general’s office, and were sentenced on June 11.

Mangru got a light sentence, compared to Job Torres Hernandez of Hayward, Calif. Torres faces sentencing this month of up to 20 years in prison and $500,000 in fines, the U.S. Attorney for Northern California said.

Of course, Torres did more than just steal the workers’ wages, a 10-day jury trial in federal court in March showed. He imported undocumented workers from Mexico, kept them toiling in virtual slave labor, and threatened those who complained with violent retaliation.

Torres set up several construction companies to handle business and disguise his doings. But he also hired a subcontractor for an apartment tower in San Jose. The sub got caught, too. It paid $250,000 in back pay to 22 workers – cracking the case. The whole mess also prompted the San Jose City Council to pass a stronger ordinance, in fines and jail terms, against wage theft.

(Read More)

unnamed

Brooklyn contractor pays more than $300K to settle worker wage theft claims (NY)

Posted by National Alliance for Fair Contracting on

Kim Slowey
June 21, 2018

Dive Brief:

Brooklyn District Attorney Eric Gonzalez, together with New York City Department of Investigation Commissioner Mark Peters, announced Monday that a Brooklyn construction company pleaded guilty to second-degree grand larceny for underpaying and committing wage theft against 21 employees. Brooklyn-based contractor The Urban Group made full restitution of $303,411. According to the New York Daily News, Gonzalez said the affected workers were immigrants.

Between 2014 and 2015, according to Gonzalez’ office, Urban employed six non-union workers to perform construction-related work – including demolition, masonry, carpentry and painting – at five schools in Brooklyn and the Bronx. Urban reportedly falsely certified that it paid those workers at prevailing wage rates ($62 to $63 per hour), but only paid between $10 and $17 per hour and no overtime or benefits. Urban ended up owing those workers more than $230,000 in restitution. Urban also reportedly underpaid non-union day laborers hired to perform construction work at other school sites by more than $71,000.

The pay discrepancies reportedly were revealed when the company was forced to post the legal wage on signs around its worksites. The Urban Group on June 13 was sentenced to a conditional discharge and is debarred from performing public work in New York state as a contractor or subcontractor for five years.

Dive Insight:

In December, New York city officials, led by Manhattan District Attorney Cyrus Vance, launched a crackdown on wage theft in the city by announcing the prosecution of area construction companies that had allegedly stolen more than $2.5 million in wages from approximately 400 of their workers by writing them bad checks, not paying them prevailing wage rates or overtime and, in some cases, withholding payment altogether. The DA’s office accused the companies involved of making total underpayments ranging from $13,000 to $700,000.

(Read More)

unnamed

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

Posted by National Alliance for Fair Contracting on

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)

unnamed

General Assembly approves increasing penalties for bad contractors (RI)

Posted by National Alliance for Fair Contracting on

POSTED BY: SANDY MCGEE JUNE 21, 2018

PORTSMOUTH, R.I. – In a major win for consumers, the General Assembly recently passed legislation (2018-H 7443, 2018-S 2607) that distinguishes penalties for licensed contractors, who fail to comply with Contractors’ Registration and License Board (CRLB) orders.

The new legislation imposes penalties for contractors operating without proper licenses or registration.

The legislation was introduced by Rep. Dennis M. Canario (D-Dist. 71, Portsmouth, Little Compton, Tiverton) and Sen. Paul W. Fogarty (D-Dist. 23, Glocester, Burrillville, North Smithfield) at the request of Attorney General Peter F. Kilmartin.

“Negligent and bad contractors not only waste consumers’ money, but there are also significant safety concerns that can arise with inferior or substandard contractor work. This bill will protect consumers’ wallets and health while also holding bad contractors responsible for their actions,” said Representative Canario.

“The public must have a real means to defend against fraudulent or shabby contractors. Today we are putting some teeth in the law to ensure that people get the restitution they deserve and to send a clear message to those who would fleece the public that they will be held accountable,” said Senator Fogarty.

“The number one consumer complaint filed with our office is against contractors who do shoddy work, or worse, fail to do the work at all,” said Attorney General Kilmartin. “Until now, our hands – and the hands of the CRLB – were tied because there was no legal avenue to hold these bad contractors accountable once the criminal sentence expired. This act gives our Office and the CRLB much-needed tools to protect homeowners and ensure that all contractors are playing by the rules. This is a great win for consumers.”

The legislation amends RIGL Section 5-65-19 (“penalty for operating without a registration – failure to comply with a final order of the board – repeat offense a felony”) to provide that any person who violates a final order of the CRLB where the monetary total of the order including, but not limited to, the monetary judgment and/or fines, is not more than $5,000, upon proper written notification, is deemed guilty of a misdemeanor, and, upon conviction, shall be imprisoned for a term not exceeding one year, fined not more than $1,000, or both.

Where the monetary total of the order is $5,000 or more, upon written notification, is deemed guilty of a felony, and, upon conviction, shall be imprisoned for a term not exceeding 10 years, fined not more than $10,000, or both. The imprisonment time for those persons found to be a repeat offender would be increased from up to 5 years to up to ten years.

(Read More)

dispatcher-12

Seventh Circuit Revisits Contractor Misclassification

Posted by National Alliance for Fair Contracting on

Thursday, June 28, 2018
Hannesson Murphy

Courts in the U.S. have been grappling with the misclassification of independent contractors for more than 20 years. As our readers well know, there is no standardized test to determine whether a worker is a contractor. Various courts and government agencies all have adopted their own criteria. Fortunately, most of them overlap, but there can be critical differences in the factors and how they are applied.

In 2015, the Wage and Hour Division of the U.S. Department of Labor (DOL) firmly supported the “economic realities” test as part of a government sponsored misclassification initiative. While not breaking new ground by adopting the test, the DOL’s pronouncement did create somewhat of a splash at the time because it deliberately downplayed the relative importance of control over a worker – which previously had been viewed as the most important aspect of the contracting relationship. See Administrator’s Interpretation No. 2015-1 (July 15, 2015). In the years since its issuance, the DOL’s advisory opinion largely has been sidestepped by several tribunals charged with examining the issue in favor of their own well-worn standards.

A decision by the Seventh Circuit last week, Simpkins v. DuPage Housing Authority, appears to be the latest in that trend. In the case, Anthony Simpkins dutifully signed “independent contractor agreements” with the DuPage Housing Authority, in 2009 and again in 2012, to perform general labor, such as carpentry, maintenance, demolition and remodeling, on some vacant properties to get them ready for new occupants. This was a full time job, but provided no benefits and Simpkins was responsible for his own taxes. While the housing authority claimed he had the discretion on how to perform the job as he saw fit, the housing authority directed him on which jobs to perform and prioritized the order in which he would need to complete them. Simpkins objected to his status and repeatedly asked to be reclassified as an employee so he could get benefits, but his efforts were rebuffed.

After Simpkins was injured in a car accident, he filed suit to recover unpaid overtime and disability benefits under the FLSA, as well as under Illinois state law. The district court agreed with the housing authority that Simpkins was a contractor and granted summary judgment. On appeal, however, the Seventh Circuit reversed.

(Read More)

Simpkins v. DuPage Housing Authority, No. 17-2685 (7th Cir. 2018)

Opinion: Wage discrimination in construction industry makes minimum standards a good idea

Posted by National Alliance for Fair Contracting on

By HILDA L. SOLIS
PUBLISHED: August 30, 2017 at 11:49 am
UPDATED: August 30, 2017 at 5:32 pm

Equal pay for equal work remains elusive, even here in progressive California.

A recent study by Smart Cities Prevail showed that Latinos make up two thirds of the construction workforce, yet only make about 70 cents on the dollar of white workers with the same skills. The study noted that Latino construction workers also are significantly more likely to be uninsured and to struggle with housing affordability.
Low minimum wage standards are one factor that contributes to these types of disparities.

California legislators are soon expected to consider streamlining development of more housing across our state. At its core, the proposal involves removing certain regulatory hurdles in exchange for guarantees that a small percentage of new developments will include “affordable” units.

A similar effort failed last year when no agreement was reached on wage standards for workers on streamlined projects.

According to industry research, workers’ wages and benefits are just 15 percent of the total cost of constructing housing. By comparison, profits for developers and contractors are 18 percent of costs and growing faster than the cost of labor.

…

And with labor standards being eroded, other problems have become more pervasive.

For example, wage theft occurs when employees are paid for fewer hours than they worked, less than legally required, or when their employer is paying in cash and cheating on payroll taxes. California’s construction industry has seen a 400 percent increase in wage theft since the 1970s-a period that has also seen a dramatic increase in the share of immigrants in our construction workforce.

(Read More)

NYC invests $10M to boost minority, women participation in construction

Posted by National Alliance for Fair Contracting on
Kim Slowey
June 22, 2017

Dive Brief:

  • New York City has created a $10 million fund to assist women- and minority-owned businesses win construction projects, according to Crain’s New York Business.
  • The money will go toward paying for up to $500,000 of surety bonds per contract. City contractors are required to furnish the bonds, which guarantee they will satisfactorily perform work and pay their bills, but they are difficult to obtain for smaller companies without a track record of completed projects.
  • Aside from helping women- and minority-owned firms become successful, New York City building officials said the program will help other contractors who are required to hire a certain percentage of these firms but can’t find enough of them to meet their mandated quotas.

Dive Insight:

The city aims to issue $16 billion worth of contracts to minority- and women-owned businesses by 2025, and the bond assistance program should help it meet that goal.
Considering that federal and state governments spend hundreds of billions on public construction work and typically set aside 5% to 10% for MBEs and WBEs, the potential payoff is substantial. However, many contractors have reported difficulty finding enough qualified firms.

Workers cheated as federal contractors prosper

Posted by National Alliance for Fair Contracting on

A Center analysis found that government agencies paid $18 billion over an 18-month period to companies with wage violations

By Talia Buford, Maryam Jameel
April 6, 2017 4:54

…

“I knew it was a federal building, but since everyone else was paying low wages, too, I just figured that’s how it was supposed to be,” Quezada, 40, said in a recent interview at her home in Arlington, Virginia.

Actually, that’s not how it’s supposed to be. But each year, thousands of contractors enriched by tax dollars skirt federal labor laws and shortchange workers. In fact, U.S. Department of Labor data show that upwards of 70 percent of all cases lodged against federal contractors and investigated by the department since 2012 yielded substantive violations.

But many of these violators go on to receive more federal contracts. An Obama administration effort to change that practice was derailed in late March by President Donald Trump.

The Center for Public Integrity examined a subset of 1,154 egregious violators – those with the biggest fines, highest number of violations or most employees impacted – included in the Labor Department’s Wage and Hour Division enforcement database and cross-referenced them with more than 300,000 contract records from the Treasury Department. The Center found that between January 2015 and July 2016:

  • Federal agencies modified or granted contracts worth a total of $18 billion to 68 contractors with proven wage violations. Among them: health-care provider Sterling Medical Associates, Cornell University and Corrections Corporation of America
  • Of all agencies, the U.S. Department of Defense employed the most wage violators – 49, which collectively owed $4.7 million in back pay to almost 6,200 workers. The department paid those 49 contractors a combined $15 billion.
  • Violations by the 68 contractors affected some 11,000 workers around the country – about the same number of people who moved to D.C. in 2016.

 

(Read More)