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US Department of Labor Finds Honolulu Contractor Failed to Pay Correct Wages, Fringe Benefits to 46 Employees on Federally Funded Projects

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: August 2, 2022
Release Number: 22-1586-SAN

Investigation recovers $156K in back wages, benefits for Tunista Services LLC’s workers

HONOLULU – A U.S. Department of Labor investigation has recovered $156,837 in back wages from a Honolulu contractor who paid 46 workers lower wages than the law allows for the type of work they performed under federal contracts awarded by U.S. Marine Corps, Navy, Army and Coast Guard in Hawaii.

The department’s Wage and Hour Division determined that Tunista Services LLC failed to pay truck drivers, material handling laborers, warehouse specialists, forklift operators, service order dispatchers, janitors and other workers the correct wage rates set by federal law for their services. Instead, the employer paid several workers lower hourly rates than required for their occupations, in violation of the McNamara-O’Hara Service Contract Act.

Tunista Services also violated the provisions in the act – which governs employee pay standards for contractors and subcontractors on federally funded contracts – when they failed to provide the required health benefits, sick leave pay, holiday pay and vacation pay.

In addition, the employer violated the Contract Work Hours and Safety Standards Act, which requires overtime pay for hours over 40 in a workweek. The employer based its overtime calculations on the lower, incorrect wage rate and failed to pay the full overtime due.

The $156,837 recovery includes $84,995 for paying incorrect occupational wages, $56,596 for underpayment of fringe benefits, $14,791 reimbursement for unpaid sick leave and $455 in overtime pay for the affected workers.

“Federal contractors who fail to pay correct wages and fringe benefits shortchange workers, reduce their labor costs illegally and gain unfair advantage over their law-abiding competitors,” said Wage and Hour Division District Director Terence Trotter in Honolulu. “We strongly encourage all federal contractors to review their own pay practices and ensure they comply with the law.”

Learn more about the division, including its search tool to learn if you are owed back wages collected by the division. For confidential compliance assistance about the Service Contract Act and the Contract Work Hours and Safety Standards Act, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Help ensure hours worked and pay are accurate by downloading the department’s Android and iOS Timesheet App for free.

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Bill aims at cracking down on companies committing wage theft (HI)

Posted by National Alliance for Fair Contracting on

Representative Chris Lee says his bill would subject employers who willingly withhold money from their employees’ paychecks to criminal charges.

Thursday, February 27th 2020

Have you ever felt like you’ve been underpaid? A new bill could help prevent that from happening to you.
A bill moving through the capitol looks to crack down on companies that commit wage theft.

Representative Chris Lee says his bill would subject employers who willingly withhold money from their employees’ paychecks to criminal charges. Violators could face up to five years in prison and up to $10,000 in fines.

“In cases around the country we’ve seen employers intentionally dock wages from their employees, underpay their employees, pocket the money themselves, and in those cases they can be charged with a felony — which could be thousands of dollars, years in prison, because that is the same as someone going to a store nearby and robbing them of the same amount of money. So this protects workers from exploitation,” Lee said.

Under current law, the penalties for employers convicted of wage fraud ranges from a fine of $50 to up to a year in prison.

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Pro-Labor Bill Becomes Law Without Mayor’s Signature (HI)

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Caldwell informed the council he wants to work on “legal concerns.”

By Chad Blair
Oct. 25, 2019

Legislation that requires union labor for all city public works projects of $2 million will become law at the end of May 2020.

In the interim, Honolulu Mayor Kirk Caldwell – who let Bill 37 become law without his signature – told the Honolulu City Council he wants to work with them to address “legal concerns.”

“I appreciate Councilmember Joey Manahan for introducing and working hard on Bill 37 along with other City Council members, as the goal of Community Workforce Agreements is to promote efficient and timely construction projects without disruptions and to do so using local labor,” the mayor said in a press release Friday.

He added: “I look forward to working with all of the stakeholders to resolve the legal concerns pertaining to this bill, including amending the bill where necessary and passing legislation at the state level, thus allowing all counties greater flexibility in implementing Community Workforce Agreements.”

Under the legislation, CWAs – also known as project labor agreements – will be used for all large public works contracts.

Bill 37 was widely supported by labor groups. But opponents – many nonunion contractors – said the bill will hurt their own businesses because it amounts to a sweetheart deal for unions.

In Caldwell’s letter to Council Chair Ikaika Anderson, the mayor wrote, “Unfortunately, the mandatory nature of Bill 37 goes beyond the enactment of enabling legislation and infringes upon the authority of the Executive branch to conduct procurements and negotiate an appropriate CWA to the benefit of the City.”

The mayor added, “It is my understanding that the proponents of Bill 37 will seek to address this concern during the upcoming 2020 State Legislative session by amending the State Procurement Code.”

Caldwell also expressed concern that federal funding “may be jeopardized” for projects “due to the inclusion of certain provisions that may not be appropriate for all contracts.”

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Subcontractor on UH-Hilo project sanctioned, fined

Posted by National Alliance for Fair Contracting on

Hawaii Tribune Herald
Published November 1, 2016 – 12:05am

The state Department of Labor and Industrial Relations said Monday it has assessed Tradewind Plastering and Drywall Inc. a total of $143,000 for violating wage laws on the University of Hawaii at Hilo College of Hawaiian Language Building construction project.

According to a written statement, $130,367 is for wages owed to construction workers with $13,037 added for penalties. Tradewind Plastering and Drywall was a subcontractor of Jacobsen Construction Co. on the UH-Hilo project.

The most costly of the violations was underpaying construction workers by misclassifying them as apprentices, and paying lower apprentice wages, with no registered apprenticeship in evidence. This was in violation of Hawaii’s prevailing wage law covering public works construction.

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State fines Texas-based construction company $767K for misclassifying workers

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Sep 20, 2016, 7:29am HST
Duane Shimogawa

The state Department of Labor and Industrial Relations has fined Texas-based R&R Construction Services $767,095 for the misclassification of its workers as independent contractors that are part of the Maile Sky Court hotel-condominium redevelopment project in Waikiki.

The state said Monday that R&R has 20 days to appeal the citations.

“Law-abiding contractors who pay their fair share face unfair competition, and workers suffer when deprived of their rights and benefits,” Linda Chu Takayama, director of DLIR, said in a statement. “The visitor industry and a pleasant visitor experience is important to Hawaii, but Hawaii’s working people and law-abiding contractors need to benefit fairly.”

R&R allegedly misclassified 65 construction workers as independent contractors and, by doing so, it avoided requirements to provide unemployment, workers compensation, temporary disability and prepaid health care insurances, according to the state.

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New laws toughen up penalties for labor law violations

Posted by National Alliance for Fair Contracting on

Published Thursday, July 7th 2016

HONOLULU (HawaiiNewsNow) –
Hawaii employers who fail to comply with state labor laws will face stricter penalties, under new measures signed into law July 1.

Gov. David Ige signed the laws, increasing the penalties violations of requirements for workers’ compensation insurance, temporary disability insurance and for breaking prevailing wage laws on public construction projects.

In Nov. 2015, an investigation by the Labor Department found dozens of contractors and subcontractors working at the Ala Moana Center’s new Ewa wing violated labor laws by not necessary taxes.

Furthermore, the department found a number of construction firms also failed to pay pre-paid health insurance and temporary disability insurance for their workers.

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US Department of Labor signs agreement with Hawaii’s Department of Labor and Industrial Relations to protect workers from misclassification

Posted by National Alliance for Fair Contracting on

WHD News Brief: 9/04/2015
Release Number: 15-1761-SAN

 

Participants: U.S. Department of Labor’s Wage and Hour Division and the State of Hawaii’s Department of Labor and Industrial Relations

Partnership description: The U.S. Department of Labor’s Wage and Hour Division and Hawaii’s Department of Labor and Industrial Relations have signed a three-year Memorandum of Understanding intended to protect employees’ rights by preventing their misclassification as independent contractors or other non-employee statuses. The two agencies will provide clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, share resources, and enhance enforcement by conducting joint investigations and sharing information consistent with applicable law.

Quotes: “The Wage and Hour Division continues to attack this problem head on through a combination of a robust education and outreach campaign, and nationwide, data-driven strategic enforcement across industries,” said David Weil, administrator of the Wage and Hour Division. “Our goal is always to strive toward workplaces with decreased misclassification, increased compliance, and more workers receiving a fair day’s pay for a fair day’s work.” – David Weil, U.S. Department of Labor Wage and Hour Division Administrator

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Honolulu subcontractor pays more than $305K in back wages, damages to 65 workers after US Labor Department investigation

Posted by National Alliance for Fair Contracting on

U.S. Department of Labor          February 9, 2015

Wage and Hour Division            Release Number: 14-2339-SAN (SF-9)

HONOLULU — M.H. Electric has paid $290,588 in back wages to 65 workers after the U.S. Department of Labor determined that the Honolulu-based subcontractor violated federal wage and hour laws at 10 federally funded construction projects awarded in Hawaii between 2012 and 2014 by the Hawaii Air National Guard and the U.S. Departments of the Navy, Army and Veterans Affairs. In resolving the department’s allegations, the company also paid an additional $14,507 in back wages and damages for overtime violations under the Fair Labor Standards Act.

The department’s Wage and Hour Division found M.H. Electric violated the Davis-Bacon and Related Acts and Contract Work Hours and Safety Standards Act. The company failed to pay its employees for their overtime hours in a timely manner. Instead, the employer systematically “banked” those overtime hours at straight-time wage rates for future use as vacation or sick time, or to be used when employees worked less than 40 hours. That violated the overtime standards of both the CWHSSA and the FLSA, which require that an employer pay time and one-half for hours worked beyond 40 in a workweek.

“Federal contractors owe it to taxpayers to comply with all applicable laws, including paying their workers fairly and fully,” said Terence Trotter, district director for the Wage and Hour Division in Honolulu. “In this case, we appreciate the cooperation shown by M.H. Electric to help resolve the matter expeditiously and to commit to future compliance with applicable labor standards.”

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Hawaii Raises Minimum Wage to $10.10 Per Hour

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HONOLULU (AP) – Hawaii has raised its minimum wage to $10.10 per hour, putting the state among the first to meet President Obama’s goal of increasing the minimum wage nationwide.

 Gov. Neil Abercrombie signed the minimum wage bill into law in a ceremony Friday, marking the first time Hawaii’s minimum wage will be raised from $7.25 since 2007.The increase will be phased in gradually over four years. Abercrombie said he wished the hike was coming quicker, but “we’re swimming in the water that we’re in.”

“I always thought it’s not a minimum wage, it’s a survival wage,” Abercrombie said. “And in today’s world, that minimum wage is not a survival wage, certainly in Hawaii.”

Hawaii is the third state this year to increase its minimum wage to $10.10 per hour, following Connecticut and Maryland, said Jack Temple, policy analyst for the National Employment Law Project.

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