Jersey City electrical subcontractor underpaid workers by nearly $800K in wages, benefits: feds

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By Ron Zeitlinger | The Jersey Journal
May 13, 2022

A Jersey City electrical subcontractor on a federally funded residential townhome and apartments project in Paterson underpaid 11 electricians by a total of nearly $800,000 in wages and benefits, a federal investigation found.

Deen Electrical Contractors Inc. misclassified the workers at the Riverside Townhomes and Senior Apartments public housing project and paid them as laborers, in violation of the Davis-Bacon and Related Acts, Department of Labor officials said. By doing so, Deen underpaid the electricians for work on the project that was funded through the U.S. Department of Housing and Urban Development.

The investigation by the U.S. Department of Labor’s Wage and Hour Division led to the recovery of $799,479 in back wages for the 11 electricians.

“Contractors and subcontractors on federally funded projects are legally obligated to accurately identify workers on work sites, pay them the local prevailing wages and fringe benefits and submit weekly certified payroll records to the contracting agency.” Wage and Hour Division District Director Paula Ruffin said.

Officials said that when the federal investigation was completed, Deen Electrical paid the back wages promptly.

Based in Jersey City, Deen Electrical Contractors Inc. has been a family-owned and operated contractor for more than 30 years, serving commercial builders, residential owners and performing work under state and federal contracts in North Jersey and the surrounding area, federal officials said.

Contractors and subcontractors on federally funded projects are required to properly identify workers and pay them the applicable prevailing wage rate, in addition to submitting weekly certified payroll records to the contracting agency. They are also required to post the Davis-Bacon poster on the job site.

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HUD ISSUES REQUEST FOR INFORMATION ON ELIMINATING REGULATORY BARRIERS TO AFFORDABLE HOUSING

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HUD No. 19-171
HUD Public Affairs
(202) 708-0685
Tuesday, November 26, 2019

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) today published a Request for Information (RFI) seeking public comment on Federal, State, local, and Tribal laws, regulations, land use requirements, and administrative practices that artificially raise the costs of affordable housing development and contribute to shortages in America’s housing supply.

This RFI is a request for members of the public to share their knowledge and provide recommendations to HUD regarding regulations, and practices that unnecessarily impede housing supply and information on innovative practices that promote increased housing supply. Read the RFI here.

“Owning a home is an essential component of the American Dream. It is imperative that we remove regulatory barriers that prevent that dream from becoming a reality,” said HUD Secretary Ben Carson. “Through this request, communities across the country will have the opportunity to identify roadblocks to affordable housing and work with State, Federal, and local leaders to remove them.”

In this RFI, HUD is seeking information on the following:

-Specific HUD regulations, statutes, programs, and practices that directly or indirectly restrict the supply of housing or increase the cost of housing;
-Policy interventions, solutions, or strategies available to State, local, and Federal decision makers to incentivize State and local governments to review their regulatory environment or aid them in streamlining, reducing or eliminating the negative impact of State and local laws, regulations, and administrative practices;
-Ways that State-level laws, practices, and programs contribute to delays in the construction industry and specific laws, practices, and programs that could be reviewed;
-Common motivations or factors that underlie local governments’ adoption of laws, regulations, and practices that demonstrably raise the cost of housing development, and whether such factors vary geographically;
-Peer-reviewed research and/or representative surveys that provide quantitative analyses on the impact of regulations on the cost of affordable housing development;
-Performance measures, quantitative and/or qualitative, the Council should consider in assessing the reduction of barriers nationally or regionally and advantages and disadvantages of each measure; and
-Recommendations on how to best utilize HUD’s Regulatory Barriers Clearinghouse for States, local governments, researchers and policy analysts who are tracking reform activity across the country.

This RFI is a part of the work Secretary Carson is undertaking as the Chair of the White House Council on Eliminating Regulatory Barriers to Affordable Housing. The Council’s eight Federal member agencies are engaging with governments at all levels-State, local, and tribal-and other private-sector stakeholders on ways to increase the housing supply so more Americans have access to affordable housing.

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Contractor ordered to pay $100K in back wages for Hammond project (IN)

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Karen Caffarini – Post-Tribune
September 19, 2017, 8:55 pm

Back wages totaling $103,788 have been paid to 29 individuals who were underpaid while working on the Flagstone Village affordable housing project in Hammond, according to a federal agency.

Because the Flagstone Village was a U.S. Department of Housing and Urban Development project, the U.S. Department of Labor Wage and Hour Division said the prime contractor for the job, CRG Residential of Carmel, needed to incorporate the required Davis-Bacon and Related Acts and Contract Work Hours and Safety Standards Act stipulations into its subcontractors’s contracts.

According to a Department of Labor spokesman, Scott Allen, CRG was responsible for all violations and back wages owed because the subcontracts did not include these contract stipulations. Allen said subcontractors were not responsible for any wage violations on their part.

“Federal contractors owe it to taxpayers to comply with all applicable laws, including paying their workers fairly and fully,” said Wage and Hour District director Patricia Lewis, in Indianapolis. “Prevailing wage laws level the playing field for all contractors.”

Among those receiving additional compensation was a heavy equipment operator working for subcontractor Hubinger Landscaping in Crown Point, who was reportedly classified improperly, and thus paid at a lower rate than required, according to the Department of Labor.

The Wage and Hour Division also determined that CRG Residential failed to pay one employee for time spent transporting other workers to the job site at the start of the week and home from the job site at the end of the week. The company also classified the worker improperly and paid him a lower rate than required for his job classification when he was operating heavy equipment, according to the division.

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Cleveland-area contractor sentenced to prison for paying workers criminally low wages (OH)

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By Eric Heisigon January 17, 2017 at 2:54 PM, updated January 17, 2017 at 5:47 PM

CLEVELAND, Ohio — A Cleveland-area contractor who paid his employees criminally low wages while working on projects for the Cuyahoga Metropolitan Housing Authority was sentenced Tuesday to 21 months in federal prison.

Marcus Butler, who operated of L & B Electric of Northeast Ohio, lied on forms between 2011 and 2013 and said he paid his employees $126,514.80 more than he actually had when doing subcontracting work at three CMHA properties.

The work was part of a federally-funded project, as the CMHA receives money from the U.S. Department of Housing and Urban Development. Under federal law, employers working on federal projects are supposed to pay their workers a certain rate, known as a “prevailing wage.”

Butler, 32, of Bedford was indicted in 2015. He pleaded guilty in September to 61 counts of making false statements.

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US DEPARTMENTS OF LABOR, HOUSING AND URBAN DEVELOPMENT SIGN PARTNERSHIP TO REDUCE EMPLOYEE MISCLASSIFICATION IN SIX WESTERN STATES

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MOU aligns federal departments in effort to ensure full pay, benefits for workers

 

WHD News Release: 08/22/2016
Release Number: 16-1726-DAL

DENVER – Officials from the U.S. Department of Labor and the U.S. Department of Housing and Urban Development signed a Memorandum of Understanding to help stop the misclassification of workers in Colorado, Montana, North Dakota, South Dakota, Utah and Wyoming.

The first MOU of its kind represents a new effort on the part of the agencies to work together to protect employee rights and level the playing field for responsible employers by reducing the practice of misclassification.

In Fiscal Year 2015, the department’s Wage and Hour Division recovered more than $74 million in back wages for more than 102,000 workers in industries, such as janitorial, food, construction, daycare, hospitality and garment. The division regularly finds low-wage workers are victims of misclassification.

The agreement will help both agencies communicate and cooperate more effectively and efficiently in areas of common interest, including cross training staff and providing employers and employees with information about the law. By doing so, the two agencies seek to protect the wages, safety, and health of America’s workforce by sharing information.

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Houston contractor indicted for making false statements about paying prevailing wage on CMHA jobs

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FOR IMMEDIATE RELEASE
Tuesday, November 17, 2015

 

A 61-count indictment was filed charging Marcus Butler, of Houston, with making multiple false statements to the United States Department of Housing and Urban Development and the United States Department of Labor while defrauding the Cuyahoga Metropolitan Housing Authority and several of his former employees, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, announced that.

The indictment alleges that Butler ran an electrical company called LB Electric of Northeast Ohio in the Cleveland area.  Butler and his company agreed to work as subcontractors on a number of CMHA construction projects, including projects at the Riverside Park, Union Square and Delaney Village properties.

Butler, as a subcontractor on the CMHA project, agreed to pay his employees a prevailing wage while they worked on these CMHA projects and further agreed to provide certified weekly payrolls to CMHA. Although Butler submitted numerous certified payrolls claiming that he paid a prevailing wage to his employees, he did not in fact make such payments to his employees and instead submitted false certified payrolls to conceal this conduct. As a result of his conduct, Butler overstated the amount of wages paid to his employees, and thus underpaid his employees, by approximately $126,514, according to the
the indictment.

At an upscale Pearl District apartment project, a union blows the whistle on wage theft

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By DON McINTOSH, Associate Editor

The U.S. Labor Department is investigating prevailing wage violations at four Portland-area construction projects that received loan guarantees from the U.S. Department of Housing and Urban Development (HUD). That government help came with conditions: The apartments must be affordable for moderate-income families or the elderly or handicapped, and construction workers must be paid local prevailing wage rates as determined by government surveys.

But an investigation by Painters District Council 5 found that a painting subcontractor at the Parker Apartments construction project paid workers as little as half the amount they were entitled to. Workers who complained about the violation were let go.

Undercover probe
The story begins in March, when Painters union organizer Roman Ramos asked out-of-work union member Marcos Jimenez to go undercover as a painter at the Parker Apartments – a six-story 177-unit apartment building under construction in the Pearl District – and report back any illegal practices he found.

The Parker is named after the toddler son of Bob Ball, a prominent developer who ran for Portland mayor in 2008. To build it, Ball teamed up with Eugene developers Don Woolley and Tom Connor, and with a HUD loan guarantee, they obtained a $35.7 million loan from CBRE, the world’s largest commercial real estate services firm.

Painters District Council 5 has been investigating HUD-sponsored construction projects in the Pacific Northwest, starting in Seattle, says organizing director Jeff Kelley. The goal is to clean up the industry, making it harder for companies to win contracts by cheating workers out of wages.

“Every project we’ve looked at in Washington and Oregon has had issues,” Kelley said. And the biggest issue has been violations of the prevailing wage law, known as Davis-Bacon.

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HUD Tells Canton to Make Up Prevailing Wage Difference

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If you’re a construction worker who helped build Goodwill’s Canton campus in 2009, you may be getting a small check from the city.
The U.S. Department of Housing and Urban Development is forcing the city of Canton to pay $31,000 in wages to some workers who built Goodwill’s campus at 408 Ninth St. SW.
HUD, in an audit of the city’s federal spending of Community Development Block Grant funds, found that the city never enforced a requirement that construction workers be paid the prevailing wage. The prevailing wage is the hourly wage, plus overtime and benefits, paid to a majority of workers in a particular area. It is set by the U.S. Department of Labor.