AG Healey Assesses More Than $326,000 in Restitution and Penalties Against Construction Companies in First Quarter of 2016

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Part of an Ongoing Effort by the AG’s Office to Address Wage Theft in the Industry

MAURA HEALEY, ATTORNEY GENERAL

For Immediate Release – April 27, 2016

BOSTON – As part of an ongoing effort to address wage theft in the construction industry, Attorney General Maura Healey has issued 29 civil citations against construction companies from January 2016 through March 2016, an increase from the previous two quarters. Restitution for employees of the various employers totaled nearly $260,000 and the companies were fined a total of more than $68,000.

“Wage theft is a real issue in Massachusetts, including in the construction industry where dishonest companies continue to cheat their employees,” AG Healey said. “Our office is working to level the playing field so that workers are paid fairly and contractors who follow the rules are not at a disadvantage.”

Violations in these cases included the failure to pay proper wages, failure to pay overtime, retaliation and failure to furnish records for inspection. For work performed on public construction projects in the state, the violations included the failure to pay the prevailing wage, failure to submit true and accurate certified payroll records, and failure to register and pay apprentices appropriately.

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Cambridge Takes Steps to Protect Workers from Wage Theft (MA)

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03/18/2016
Richard Rogers and Darlene Lombos

This week, workers in Cambridge, Massachusetts, gained new protections for making sure they are paid fairly and on time. On March 14, city manager Richard Rossi signed an executive order establishing certification requirements for vendors bidding on city contracts. The measure seeks to prevent wage theft, which is the improper withholding of payment from employees and the failure to pay employees according to required schedules. Wage theft most often involves employers paying less than the minimum, contracted or prevailing wage, not paying for all hours worked, or not paying overtime for hours exceeding 40 per week. But wage theft can take many forms-employers may never send the final paycheck or may misclassify workers as independent contractors.

“This executive order is a clear indication of Cambridge’s continuing commitment to wage justice,” Rossi said. “The provisions put into effect today provide the city the protections that are needed to ensure that we are dealing with quality contractors. We have created a simple and fair process for both the city and for our contractors.”

Under the executive order, vendors bidding on city contracts will be required to certify their compliance with federal and state wage law with the city, and if the vendors have previous violations, they are required to disclose them and provide a wage bond for the duration of the contract. These measures strengthen the city’s ability to hire vendors that treat their employees fairly.

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Increasing enforcement at state and local levels in Massachusetts combats wage theft

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By CHRIS LINDAHL
Monday, February 15, 2016

NORTHAMPTON – Efforts are underway on the state and local levels in communities across Massachusetts to combat wage theft, the practice of employers denying workers the pay to which they are legally entitled.

Labor activists say wage theft is an unfortunate practice in workplaces throughout the country. It’s not uncommon for bosses to deny workers earned overtime, sick time or even the minimum wage, they say. The practice is particularly prevalent in the restaurant industry, which employs about 40 percent of all workers making at or below the minimum wage nationwide. It’s also common in the landscaping and construction industries, studies have found.

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Study shows wage theft rampant in construction industry

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By Katie Johnston GLOBE STAFF MAY 12, 2015
 

For more than three years, workers doing asbestos removal and demolition jobs for several Woburn companies were paid in cash, resulting in more than $700,000 in unreported wages, federal prosecutors charged in an indictment last week.

Meanwhile, construction workers around the state – particularly immigrants hired by subcontractors – say they sometimes go for weeks without pay. When they do get paid, it can be less than promised, and overtime pay is virtually nonexistent.

Many of them are hired as independent contractors, without the job protections or tax deductions of a traditional employment relationship.

The practice, known as wage theft, “has reached epidemic levels” in Massachusetts, namely in the booming residential construction industry, according to research from the University of Massachusetts Amherst.

In the past 18 months, the state attorney general’s office has issued more wage violation citations against employers in the construction industry than in any other sector – 253 citations in all, resulting in more than $1.6 million being recovered in penalties and unpaid wages. The attorney general’s office said cracking down on wage theft continues to be a priority.

Walsh: Dialogue needed on public project wages

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Monday,

March 23, 2015

By: Jack Encarnacao

 

Mayor Martin J. Walsh said raising the wages of union laborers who work on public projects should be part of the national dialogue on income inequality during a panel discussion with the mayors of New York, Baltimore and Seattle.

Walsh praised the Legislature for boosting the state minimum wage to $11 by 2017 before mentioning the “prevailing wage law,” which pays Boston tradesman in the range of $30 to $50 an hour to work on public projects.

“I think we have to look at the prevailing wage law as well to make sure that we give people the opportunity to … have a living wage,” Walsh said during the “Municipal Strategies for Financial Empowerment” public forum at the University of Massachusetts Boston.

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Feds join N.H. worker misclassification efforts

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BY BOB SANDERS
Published: November 17, 2014

The federal government is getting involved in helping New Hampshire in its enforcement efforts against misclassification of independent contractors, especially when it relates to workers’ compensation.

New Hampshire last week became the 15th state to join the federal Labor Department’s misclassification initiative; Massachusetts followed suit on Monday.

“Misclassification of workers steals benefits and protections from employees and allows unfair advantages to businesses that do it,” said New Hampshire Labor Commissioner James W. Craig. “This agreement will help us grow our state and regional economy by leveling the playing field for honest and law-abiding employers.”

New Hampshire has grappled with the murky world of independent contractor classification for decades. Definitions change depending on the law involved, and enforcement is uneven.

The state Department of Employment Security, for instance, has found misclassification in nearly a quarter of the audits it conducts. But the state Department of Labor only has fined a fraction of those fined by the Employment Security and has drastically reduced most of the fines imposed.

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Walsh issues order protecting against wage theft in Commonwealth

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Written by Remi Duhé· October 29, 2014 1:15 am

 

Boston Mayor Martin Walsh issued an executive order Thursday requiring city-contracted vendors to certify their compliance with both federal and state wage laws.

Vendors will be required to disclose previous violations of these laws to the City. Wage theft in the city of Boston affects workers and their families, particularly low-income and immigrant families, according to Friday press release from the mayor’s office.

“It’s illegal to deny fairly earned wages,” Walsh said in the release. “This executive order empowers workers to demand what they have worked for. I’m committed to stopping violations and holding employers to the letter of the law.”

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Mass. to Expand Its Already Powerful and Effective Wage and Misclassification Task Force

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Six years after Massachusetts Gov. Deval Patrick created the Joint Task Force on the Underground Economy (JTF) via executive order, the highly successful program will become statute thanks to language in the state’s newly enacted minimum wage law.

Recent reports show that in 2013 alone the JTF recovered $15.6 million in back wages, unemployment insurance premiums, penalties and fines following over one thousand investigations.  Since its inception, the JTF has recovered over $56 million.

Executive Office of Labor and Workforce Development (EOLWD) Secretary Rachel Kaprielian said in a statement:

“Companies and individuals who willfully avoid the law by misclassifying employees … or engage in fraudulent employment practices of the underground economy put workers’ safety at risk, place legitimate businesses at a disadvantage and burden taxpayers.”

A new council will take the reigns from the JTF, adding eight agencies to those that have been on board since 2008.  Gov. Patrick is currently in the process of selecting these new agencies.  The new council will be chaired by the Secretary of Labor and Workforce Development and will have broadened powers.

  

Construction Company Owner Sentenced for Fraud Conspiracy in Connection with Renovation of McCormack Federal Building

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Construction company owner sentenced for fraud conspiracy in connection with the renovation of the John W. McCormack Post Office and Courthouse in Boston.

Wael Isreb, 55, of Wrentham, was sentenced by U.S. District Court Judge George A. O’Toole, Jr., to four years of probation, including 18 months of home confinement, and ordered to pay $164,627 in restitution. In March 2014, Isreb and his co-defendant, Aluisio Dasilva, 67, of Hudson, Mass., each pleaded guilty to conspiracy to commit mail fraud and false statements.

Isreb was the owner of Taunton Forms, a now-defunct concrete construction company based in Lakeville, Mass. In September 2006, the General Services Administration retained Suffolk Construction Company as the general contractor to renovate the McCormack Building. Suffolk Construction, in turn, retained Taunton Forms as a subcontractor to perform certain concrete work on that project. Suffolk Construction ultimately paid Taunton Forms in excess of $1 million for its work.

Federal law requires that contractors on federal projects over $2,000 pay workers a prevailing wage, and that they submit weekly reports certifying the wages they paid their employees. Beginning in about December 2007, however, Isreb conspired with Dasilva and others to pay Taunton Forms workers less than the prevailing wage while certifying to Suffolk Construction, the GSA, and the United States Department of Labor (DOL) that Taunton Forms was, in fact, paying the prevailing wage.

Mass. Window Company Settles Prevailing Wage Law Allegations

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BOSTON (Legal Newsline) – Massachusetts Attorney General Martha Coakley announced a $109,000 agreement on Tuesday with an Easthampton window company to resolve allegations it violated the state’s Prevailing Wage Law.

R&R Window Contractors Inc. allegedly failed to pay the proper prevailing wage and failed to submit true and accurate payroll records connected with several public works projects throughout the state.

“The prevailing wage law ensures a level playing field for contractors and their workers who build our public schools, libraries, police stations and other public facilities,” Coakley said. “The enforcement of these laws protects workers’ rights and our taxpayer dollars.”

Coakley’s Fair Labor Division received complaints alleging that R&R was not properly paying workers performing glazier and carpentry work under the prevailing wage laws.

Between June 1, 2010 and March 28, R&R allegedly failed to pay some of its workers the correct prevailing wage rate and failed to submit true and accurate certified payroll records to the awarding authorities on nine of their public works construction projects.

R&R fully cooperated with Coakley’s inquiry and agreed to pay more than $109,000 in restitution and penalties to 43 current and former employees.

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