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US Department of Labor Recovers $178k in Back Wages for 27 Workers of Houston Employer Who Misclassified Them as Independent Contractors

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: July 28, 2022
Release Number: 22-1438-DAL

M&M’s Welding & Fabricating failed to pay workers overtime

HOUSTON – An investigation by the U.S. Department of Labor has recovered $178,358 in overtime back wages for 27 employees of a Houston welding and fabrication company that misclassified them as independent contractors and denied them their full wages and benefits.

The department’s Wage and Hour Division found M&M’s Welding & Fabricating – operating as M&M’s Welding – misclassified the workers who specialize in the erection of structural steel buildings. As a result, the employer failed to pay the overtime premium for hours over 40 in a workweek and paid only straight time for all hours worked.

“M&M’s Welding & Fabricating exploited vulnerable workers by misclassifying and denying them the overtime pay they earned,” explained Wage and Hour Division District Director Robin Mallett in Houston. “Employers who do this harm workers and their families who depend on their earnings and benefits. They also gain an unfair advantage over their business competitors who abide by the law. The Wage and Hour Division will hold these employers accountable.”

The Wage and Hour Division is responsible for determining whether employees have been misclassified as independent contractors and have been denied critical benefits and labor standards protections. In fiscal year 2021, the division identified more than $36 million in back wages owed to about 21,000 construction industry workers. In its investigations, the division commonly finds violations related to employers failing to pay overtime when required, misclassifying workers as independent contractors, and not paying them for time spent on work-related travel, or pre- and post-shift work.

The Bureau of Labor Statistics projects construction industry employment to grow at a rate of 6 percent by 2030, with a gain of approximately 400,000 jobs. Employers who ensure their workers are paid their rightful wages and benefits will be best positioned to retain and recruit skilled workers.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. The division protects workers regardless of immigration status and can communicate with workers in more than 200 languages.

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Houston’s Attempt To Curb Wage Theft (TX)

Posted by National Alliance for Fair Contracting on

Whatever came from Houston’s Wage Theft Ordinance? We take a look.

ALLISON LEE | POSTED ON
JULY 18, 2017, 7:00 AM (LAST UPDATED: JULY 18, 2017, 10:22 AM)

It’s called, “wage theft.” And it’s a problem here in Houston, that the city tried to address. More on how that worked out in a minute.

But first, just what constitutes wage theft?

It takes many forms. Not paying workers overtime they are entitled to, working off-the-clock, minimum wage violations, incorrectly categorizing employees as independent contractors, illegal deductions in pay, and not paying workers at all are all common examples of wage theft.

Stealing workers’ wages is an issue that even compelled President Obama to implement an executive order back in 2014 which, in part, discouraged businesses from committing wage theft, by not allowing them to receive federal contracts. That was repealed by President Trump back in March.

Tom Padgett is a lawyer in Houston, who says he represents lots of wage theft cases.
“The problem is that employers hold all the cards. And employees are afraid. They are afraid of retaliation…. I mean, we’ve had employees who have asserted their rights, and then the employers fire them, and they lose their house. Or they can’t afford their health insurance anymore, and their baby gets sick. So there’s a lot of terrible stories out there,” Padgett said.

The Fair Labor Standards Act (commonly known as FLSA) is a federal statute, put in place to ensure proper payment for workers. But Padgett’s firm says federal and state agencies don’t really have the man power to truly enforce that.

“There’s no specific Texas wage and hour law that would protect people. We have to go to federal court or we have to get a municipality, or a local ordinance, like Houston,” Padgett said. “But I haven’t seen any impact from the Houston ordinance, or any change at all.”

Padgett is referring to the Houston Wage Theft Ordinance, which was passed in 2013. It was put in place to deter businesses from stealing worker’s wages, by banning violators from working with the city. The ordinance even effectively bans businesses from operating in Houston, by way of not being able to renew permits and licenses.

(Read More)

Study: Construction workers in southern US lack employment benefits

Posted by National Alliance for Fair Contracting on

Kim Slowey
May 11, 2017

 

Dive Brief:

  • A study has found that construction workers across the southern U.S. receive little to no employment benefits and have relatively low pay, according to the Houston Chronicle.
  • The Workers Defense Project report found that 40% of construction workers in Houston had no health insurance, retirement savings, paid vacations or sick leave. More than 30% were not offered breaks during the day and reported that their employer did not provide drinking water on the job.
  • Only 5% of the 1,435 workers interviewed in six Southern states said workers’ compensation covered the cost of their work injuries, and 57% said they earned less than $15 an hour.

Dive Insight:

The results of this study reinforce a complicated issue plaguing the industry. On one hand, contractors across the country are facing the consequences of skilled-labor shortages and say they’re pulling out all the stops – including raising pay – in an effort to recruit workers. However, this report reveals that, at least in the South, many companies aren’t making the necessary changes in compensation and workplace culture to be an attractive option for new workers.

(Read More)

(Full PDF of Report)