Assessing prevailing wage benefits to workers, contractors, and the NYC economy

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The Worker Institute of the ILR School at Cornell University
August 3, 2023

The Labor and Employment Law Program, the Buffalo Co-Lab and the Worker Institute of the ILR School at Cornell University are hosting the launch of a report exploring the cost of prevailing wage to New York City workers and contractors.

On January 1, 2022 an expansion of the prevailing wage law in New York City came into force. The new law significantly increases the universe of construction projects subject to prevailing wage requirements. Given the recent change in legislation, researchers at the Buffalo Co-Lab and the Worker Institute will present on research that explored the cost savings of workers covered by prevailing wages versus workers who are not, in four areas of construction work: laborer, carpenter, lather, and cement finisher. On the face of it, there does not appear to be a difference between union and nonunion wages and benefits in a project covered by prevailing wage. But this changes when the percent of the cost of benefits for a union worker is compared to a nonunion worker. This is, in fact, a defining factor and here the analysis will help us better understand the nature of this relationship between cost of wages and benefits for union versus nonunion workers. Researchers will also present a newly created tool that the public can use to determine the cost of a union versus nonunion contractor for future projects.

A panel discussion will follow the presentation of research with distinguished members of government, labor unions and the real estate industry to explore together the role prevailing wage projects play in and how the building industry can better work to protect the health and safety of construction workers while building more cost-efficient projects in New York City. This session will explore the future of prevailing wage projects, the need for enforcement and responsible contractors as stewards in New York City.

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Shapiro, Murphy announce partnership for labor law enforcement

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April 17, 2023

PHILADELPHIA – New Jersey Gov. Phil Murphy and Pennsylvania Gov. Josh Shapiro last week visited the International Union of Painters and Allied Trades (IUPAT) District Council 21 training facility in Philadelphia to tour the innovative center and announce their intention to form an interstate task force to address wage theft and worker misclassification in the two states.

The interstate task force will work to better foster the collaborative enforcement of each state’s labor laws, which include robust worker protections, while enabling healthy business competition between good actors.

New Jersey and Pennsylvania entered a regional memorandum of understanding agreement in 2019 to facilitate data sharing, joint investigations and cooperative referrals. Thursday’s commitment to a continued partnership between the two states bolsters those efforts and demonstrates Shapiro’s and Murphy’s ongoing focus on worker protections.

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Earlier in the day, the governors directed Rob Asaro-Angelo, commissioner of the New Jersey Department of Labor and Workforce Development, and Nancy Walker, acting secretary of the Pennsylvania Department of Labor & Industry (L&I), to ensure a continued partnership between the states, highlight specific opportunities the departments should pursue, and request the identification of key individuals within each agency to serve on the interstate task force.

“Cooperative efforts with our partners in Pennsylvania are crucial to bringing fairness to workers and businesses in our region,” said Asaro-Angelo. “This teamwork among states ensures consistent enforcement, and dissuades bad actors from exploiting workers on both sides of the Delaware River.”

“Worker misclassification is not a phenomenon that exists only in the construction industry or in large metropolitan areas. Law-abiding contractors are losing out on bids across the commonwealth, and workers in virtually every sector are losing out on rights and protections they’ve earned as an employee. Workers represented by unions are protected from misclassification, but too many workers are vulnerable to the exploitative actions of bad actors,” L&I Acting Secretary Nancy Walker said. “I look forward to continued collaboration with our partners in New Jersey to hold accountable those employers who think they can get away with cheating the system.”

In response to growing misclassification problems in New Jersey, Murphy issued Executive Order No. 25 on May 3, 2018, establishing an interagency misclassification task force to “promote fairness, fight against discrimination, and work to end unfair labor practices… that create an unfair advantage over companies that play by the rules and hurt our working families.” New Jersey has since been considered the “gold standard” for addressing worker misclassification. Similarly, the Pennsylvania Joint Task Force on Misclassification of Employees, created by Act 85 of 2020, made 15 recommendations to improve data sharing, strengthen compliance laws, and increase interagency collaboration, all of which are furthered by Thursday’s action.

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For the first time, Philly enforces its wage theft law by suing an employer who stiffed workers

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The Philadelphia Inquirer
by Juliana Feliciano Reyes
Apr 5, 2023

The lawsuit, against Joe Carvalho of Carvalho Construction, represents an escalation of the city’s efforts to enforce wage theft violations.

For the first time in seven years, the City of Philadelphia has sued an employer who broke the city’s wage theft law.

The lawsuit represents an escalation of the city’s efforts to enforce its 2016 wage theft law. In some cases, it can take years for workers to get paid after they win a wage theft claim; some never get paid at all.

The Law Department, which hired a dedicated attorney last spring to handle these kinds of cases for the Department of Labor’s Office of Worker Protections, has begun taking legal action “to force bad actors into compliance,” a spokesperson for the Office of Worker Protections said in a statement. Lawsuits are “an avenue of last resort,” the spokesperson said.

Bad actors are employers that broke the law but refuse to comply with city orders and pay workers what they’re owed. More than 90% of employers that have broken the law comply, the spokesperson said.

The city filed a complaint in Common Pleas Court earlier this year against Joe Carvalho, a Philadelphia construction company owner who the city says broke its wage theft law twice.

In March 2021, Carvalho didn’t pay an employee for eight days of work, owing him $1,105 in wages and overtime, a city investigation found. Carvalho had said he would pay the worker $130 per day.

The following month, the worker repeatedly asked for his pay and Carvalho ignored the texts or “responded with curse words,” according to a city violation notice.

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Attorney General’s annual Labor Day Report: More than $11.8 million in restitution and penalties against employers on behalf of workers in Mass.

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MassLive.com – Published: Sep. 05, 2022
By Tristan Smith

Attorney General Maura Healey released her seventh annual Labor Day Report, a summary of the office’s efforts to combat wage theft and other forms of worker exploitation in Massachusetts. The report showed that during fiscal 2022 the office assessed more than $11.8 million in restitution and penalties against employers on behalf of commonwealth workers.

“This Labor Day, we honor the resiliency of Massachusetts workers whose perseverance throughout the COVID-19 pandemic has kept our communities and our economy going,” said AG Healey. “One of my top priorities is ensuring that workers from every industry are paid the wages they are entitled to and that they have access to the hard-fought workplace rights that our laws provide. We will continue to advocate for the rights of workers at the state and national level.”

The Labor Day Report details the actions of the AG’s Fair Labor Division in fiscal 2022, which runs from July 1, 2021 to June 30, 2022. During this fiscal year, the Fair Labor Division ordered employers to pay $7.5 million in restitution to employees and $4.2 million in penalties to the General Fund, according to the report.

More than 19,300 workers reportedly benefited from the AG’s enforcement actions.

In fiscal 2022, the Fair Labor Division continued its focus on combatting wage theft in the construction industry – where workers are often vulnerable to exploitation on the job, according to the report. In the construction industry alone, the division assessed more than $2.9 million in penalties and restitution and issued 217 citations against employers. In one case, the AG’s office cited a Wareham company and its owners for more than $1.2 million, including restitution for 41 employees, for prevailing wage violations and failing to submit certified payroll records, according to the report.

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

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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.

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L&I Partners With U.S. Department Of Labor To Coordinate Labor Law Enforcement In Pennsylvania

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Pennsylvania Pressroom
8/19/22

​Harrisburg, PA – Department of Labor & Industry (L&I) Secretary Jennifer Berrier today announced a Memorandum of Understanding (MOU) between L&I and the U.S. Department of Labor’s Wage and Hour Division (DOL) to share information regarding violations of labor and workers’ compensation laws that fall under the investigation purview of both departments.

“Our partnership with the federal Department of Labor extends greater protections for Pennsylvania’s workers and ensures more robust compliance assistance for employers,” Berrier said. “Sharing information and resources between federal and state agencies charged with enforcing similar laws allows us to better achieve our joint mission of protecting Pennsylvania workers effectively and efficiently.”

Created due to the overlap in some of the services that the DOL administers, and laws enforced by L&I’s Bureau of Labor Law Compliance and Bureau of Workers’ Compensation, the MOU establishes a five-year agreement, allowing DOL and L&I to partner where applicable. The agreement allows the departments to, among other things, perform joint investigations throughout the commonwealth, share training materials, assist employers and employees with compliance assistance information, coordinate enforcement activities, and suggest referrals for violations.

“We look forward to working with Pennsylvania Labor & Industry as our partner. Our combined efforts will enhance our own resources and ensure increased compliance by employers throughout the commonwealth,” said DOL’s Northeast Wage and Hour Division Regional Administrator Mark Watson. “Our agencies share a common purpose of ensuring the proper working conditions for workers in Pennsylvania. Our working together and sharing resources to achieve efficiency in that common purpose makes sense.”

The Department of Labor & Industry enforces 14 labor laws, including the Construction Workplace Misclassification Act (Act 72), Prevailing Wage Act, Child Labor Act, Minimum Wage Act, Wage Payment Collection Law, Prohibition of Excessive Overtime in Health Care Act (Act 102), Medical Pay Law, Apprenticeship and Training Act, Equal Pay Law, Industrial Homework Law, Personnel File Inspection Act, Seasonal Farm Labor Act, Construction Industry Employee Verification Act, and Workers’ Compensation Act, and the regulations expressed for each.

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NJDOL Uses Expanded Powers to Stop Worker Exploitation at Job Sites

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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.

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Commerce Fraud Bureau to get new powers to investigate wage theft, other financial crimes

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Max Nesterak
May 25, 2022

Labor leaders are calling a bill that passed the state House and Senate on Sunday the most significant piece of legislation for combating wage theft since it was made a felony in 2019.

The bill (HF 3255), which is awaiting Gov. Tim Walz’s signature, gives the Commerce Fraud Bureau new powers to criminally investigate financial crimes along with more than $800,000 a year to hire five more investigators.

“This is a very big deal,” said state Rep. Zack Stephenson, DFL-Coon Rapids, who authored the bill in the House. “All across the state, white collar crimes are in desperate need of more enforcement.”

Until now, the Commerce Fraud Bureau has been restricted by law to insurance fraud investigations — a function of the department being entirely funded by a tax on insurance companies.

The new law maintains that at least 70% of the department’s work must continue to focus on insurance fraud, but allows the department to investigate all financial crimes with money appropriated from the general fund.

That puts new power behind the state’s ability to criminally investigate labor violations that are rampant in construction and hospitality — yet seldom prosecuted. Payroll fraud in the construction industry alone costs the state upwards of $136 million a year in lost tax revenue, according to one estimate by the Midwest Economic Policy Institute.

“Wage theft and tax fraud are business models,” said Adam Duininck, director of governmental affairs for the North Central States Regional Council of Carpenters. “When we see it in such a concerted manner, the only way to patrol that is with aggressive enforcement.”

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Department of Labor plans increase in wage-and-hour team

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By: Mass. Lawyers Weekly Staff
February 22, 2022

The U.S. Department of Labor is seeking to hire 100 investigators in its Wage and Hour Division to step up its enforcement efforts, including the protection of workers’ wages, migrant and seasonal workers, rights to family and medical leave, and prevailing wage requirements for workers on federal contracts.

Investigators’ responsibilities include:

  • Conducting investigations to determine if employers are paying workers and affording them their rights under federal law.
  • Helping ensure that employers who are following the law are not undercut by employers who violate the law.
  • Promoting compliance through outreach and public education initiatives.
  • Supporting efforts to combat worker retaliation and worker misclassification as independent contractors.

“Adding 100 investigators to our team is an important step in the right direction,” said Acting Wage and Hour Administrator Jessica Looman. “We anticipate significantly more hiring activity later in fiscal year 2022. While appropriations will determine our course of action, we are optimistic we will be able to bring new talented professionals onboard to expand our diverse team.”

In fiscal year 2021, the Wage and Hour Division collected $230 million in wages owed to 190,000 workers. Division representatives also conducted 4,700 outreach events to educate employers and workers about their workplace rights and responsibilities.

The uptick in hiring is in sync with the Biden administration’s focus on employees’ rights.

The types of violations the Wage and Hour Division looks out for include failure to follow local, state or federal minimum wage laws; failure to pay overtime; tip theft; failure to allow breaks; and failure to allow unpaid, job-protected leave after having a baby or for a medical condition, which the Family and Medical Leave Act mandates.

These violations disproportionately affect essential workers and immigrant workers, according to the DOL. Industries that tend to have more violations include food service, retail and construction.

(See Article)

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USDOL Wage and Hour Division to Host Prevailing Wage Seminars

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May 2019

 

Our 2019 seminars will be held in the following locations:
  • Austin, TX, June 18th – 20th: Register Here
  • Anchorage, AK, June 25th – 27th: Register Here
  • Sacramento, CA, July 23rd – 25th
  • Washington, DC, August 13th – 15th
  • Indianapolis, IN, August 27th – 29th
Please note these locations may change.
If you would like to receive email updates about our seminars, please sign up for our mailing list here. (In the category “Wage and Hour” select “WHD – Prevailing Wage Seminar Announcements”)
The Wage and Hour Division (WHD) Prevailing Wage Seminars (Prevailing Wage Seminars) are three-day compliance trainings designed for regional stakeholders (unions, private contractors, state agencies, federal agencies and workers). In these seminars, conference participants will learn about the following:
  • The Davis-Bacon Act and McNamara O’Hara Service Contract Act
  • Executive Order 13495 “Nondisplacement of Qualified Workers”
  • Executive Order 13658 “Establishing a Minimum Wage for Contractors”
  • The process of obtaining wage determinations and adding classifications
  • Compliance assistance and enforcement processes
  • The process for appealing wage rates, coverage, and compliance determinations
Prevailing Wage Seminars for 2018 were held in the following cities:
  • Jacksonville, FL – April 10-12th, 2018
  • San Diego, CA – May 22-24th, 2018
  • Kansas City, MO – June 12-14th, 2018
  • Hato Rey, Puerto Rico – August 27-28th, 2018
If you have any questions please email WHD-PWS@dol.gov