Massachusetts Senate passes wage theft bill

Posted by National Alliance for Fair Contracting on

By Shira Schoenberg

On July 13, 2016

BOSTON – The Massachusetts Senate on Wednesday passed a controversial bill aimed at cracking down on wage theft.

“This is a matter of general fairness for the employees,” said State Sen. Sal

DiDomenico, D-Everett, the bill’s sponsor.

The bill, S.2416, passed by a 38-2 vote. The two dissenters were State Sen. Kenneth Donnelly, D-Arlington, and State Sen. Ryan Fattman, R-Webster.

The bill would make companies that contract with a subcontractor who withholds wages liable for those wages. The contractor could also be liable for fees and fines, if it knows or should have known about the wage theft.

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Port Drivers Reach $5 Million Settlement in Misclassification Suit

Posted by National Alliance for Fair Contracting on

July 15, 2016

A class-action lawsuit representing nearly 400 Southern California port truck drivers has resulted in a $5 million settlement agreement with port trucking company group QTS, ending the three-year- long suit.

The lawsuit was brought by the Wage Justice Center and Asian Americans Advancing Justice-Los Angeles on behalf of Latino and Korean-American port truck drivers who claimed that they had been misclassified as contract workers in order to cheat them out of the wages and benefits granted to full employees.

This is the latest in a longstanding dispute between many port truck drivers serving the Ports of Los Angeles and Long Beach and the port trucking companies who classify drivers as independent contractors. Most recently, Premium Transportation Services filed, blaming its financial troubles on driver misclassification lawsuits and legal costs. QTS was also in the midst of bankruptcy proceedings during the lawsuit.

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Independent Contractor Misclassification: A Rising Tide

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Joeseph E. Vaughan & Thomas R. Bond, The Legal Intelligencer
July 21, 2016

Editor’s note: This is the first in a two-part series.

The U.S. Department of Labor has recognized the misclassification of employees as independent contractors as one of the most serious problems facing affected workers, employers and the entire economy. This agency points out on their website that the employment relationship between workers and the businesses receiving the benefit of their labor has fissured apart as companies have contracted out, or otherwise shared activities to be performed by other businesses. This is accomplished according to this agency through the use of subcontractors, temporary agencies, labor brokers, and franchising, licensing, and third-party management. This sharing may lead to the misclassification of employees as independent contractors in a variety of ways, such as employers simply mislabeling certain employees as independent contractors to reduce payroll course.

The Department for Professional Employees, a part of the AFL-CIO, maintains that employer misclassification of employees as an independent contractor is a widespread phenomenon in the United States. They note that the Internal Revenue Service (IRS) estimates that employers have misclassified millions of workers nationally as independent contractors.

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New York Establishes a Super IC Misclassification-Plus Task Force

Posted by National Alliance for Fair Contracting on

July 21 2016
Richard J. Reibstein

Yesterday, New York Governor Andrew Cuomo signed Executive Order No. 159 expanding the existing Joint Enforcement Task Force on Employee Misclassification into a Joint Enforcement Task Force on Worker Exploitation and Employee Misclassification. Those who follow IC misclassification developments in all 50 states, such as the publishers of this legal blog, were wondering why the annual Task Force Report issued by New York each February 1 for the past eight years had not yet been issued this year. Executive Order No. 159 tells us why – New York has now subsumed IC misclassification into a subset of “worker exploitation.”

Analysis of the New Executive Order

The Executive Order issued in 2007 establishing the Employee Misclassification Task Force required the Task Force to issue an annual report each February 1; this new Executive Order, however, has no such reporting requirement. Nonetheless, simultaneous with the issuance of Executive Order No. 159, the new and expanded Task Force issued its 2016 Report.

The Executive Order recites in its Preamble the reasons for the Governor’s action, and includes the statement that “an increasing number of employers in New York improperly classify individuals they hire as ‘independent contractors,’ even when those workers should be legally classified as ’employees’ . . . .” Neither the Executive Order nor the 2016 Task Force Report, though, provide any empirical data or basis on which the Executive Order based its conclusion that more and more employers in New York are either classifying workers as independent contractors or, more to the point, are misclassifying employees as ICs.

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US DEPARTMENT OF LABOR SIGNS AGREEMENT TO PROTECT WORKERS FROM MISCLASSIFICATION WITH SOUTH DAKOTA DEPARTMENT OF LABOR AND REGULATION

Posted by National Alliance for Fair Contracting on

WHD News Brief: 06/01/2016
Release Number: 16-1055-NAT
Participants: U.S. Department of Labor’s Wage and Hour Division
South Dakota Department of Labor and Regulation

Partnership description: The U.S. Department of Labor’s Wage and Hour Division and the South Dakota Department of Labor and Regulation 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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US DEPARTMENT OF LABOR, VIRGINIA EMPLOYMENT COMMISSION SIGN AGREEMENT TO PROTECT WORKERS FROM MISCLASSIFICATION

Posted by National Alliance for Fair Contracting on

WHD News Release: 06/16/2016
Release Number: 16-1214-NAT
Participants: U.S. Department of Labor’s Wage and Hour Division
Virginia Employment CommissionPartnership description: The U.S. Department of Labor’s Wage and Hour Division and the Virginia Employment Commission 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 coordinated investigations and sharing information consistent with applicable law.

Background: The division and the U.S. Internal Revenue Service are working with Virginia and 30 U.S. states to combat employee misclassification and to ensure that workers get the wages, benefits and protections to which they are entitled. Labeling employees as something they are not – such as independent contractors – can deny them basic rights such as minimum wage, overtime and other benefits. Misclassification also improperly lowers tax revenues to federal and state governments, as create losses for state unemployment insurance and workers’ compensation funds.

More information on misclassification and the effort are available at http://www.dol.gov/misclassification/.

Colorado Loses Millions Each Year to Businesses Misclassifying Workers

Posted by National Alliance for Fair Contracting on

By:ANNA BOIKO-WEYRAUCH

Colorado is losing more and more money each year to employers dodging mandatory unemployment insurance premium payments, according to a Rocky Mountain PBS News analysis. The estimated loss is about $23 million dollars a year since 2011.

Employers are required to pay the premiums on their employees. But, by labeling workers “independent contractors” – or unsupervised workers who make their own schedule and are not directed in their responsibilities – companies don’t have to pay.

The problem occurs when an employee is directed and supervised, but labeled an independent contractor anyway.

…

The construction industry had the highest unpaid insurance premiums and largest number of misclassified workers from 2011 to 2015, according to the analysis of state unemployment insurance audit data. Between 2011 and 2015, random audits of construction companies in Colorado found $1 million dollars in unpaid premiums and 3,433 misclassified workers.

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US LABOR DEPARTMENT RECOVERS $189K IN WAGES ON BEHALF OF 28 UNDERPAID WORKERS ON FEDERALLY FUNDED MANHATTAN CONSTRUCTION PROJECT

Posted by National Alliance for Fair Contracting on

SJ Insulation debarred from future government contracts following joint enforcement effort with New York Attorney General

WHD News Release: 05/25/2016
Release Number: 16-0804-NEW

NEW YORK – The U.S. Department of Labor has recovered $189,000 in unpaid wages and overtime for 28 carpenters and laborers who worked on the federally funded West 131st St. Cluster Project in Harlem between April 2009 and April 2010. This was the result of a joint enforcement effort with the office of New York Attorney General Eric Schneiderman in which the two agencies shared information and worked collaboratively on behalf of workers in New York. The attorney general’s investigation continues.

“Contractors on federally funded construction projects commit to paying their workers the required wages and fringe benefits when they bid these contracts. When, as in this case, they cheat their workers, they are also cheating the taxpayers who ultimately fund these jobs,” said Wage and Hour Division Regional Administrator Mark Watson, Jr. “As the resolution of this case demonstrates, we will not tolerate such illegal behavior.”

“We thank Attorney General Schneiderman and his staff for working jointly with us during the prosecution of this case. We have the mutual goals of ensuring that employees in our jurisdictions are paid and treated properly and employers who underpay their workers do not secure an unfair advantage over law-abiding employers,” said Jeffrey S. Rogoff, the department’s regional solicitor in New York.

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ELMWOOD PARK, ILLINOIS, MASONRY COMPANY ORDERED TO PAY MORE THAN $104K IN BACK WAGES, DAMAGES TO 20 WORKERS MISCLASSIFIED AS INDEPENDENT CONTRACTORS

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WHD News Release: 05/19/2016
Release Number: 16-0876-CHI

Type of Action: Fair Labor Standards Act consent judgment

Defendant(s): Expertize Masonry Inc., Pawel Walaszek

Investigation Findings: An investigation conducted by the department’s Wage and Hour Division found that Elmwood Park, Illinois-based Expertize Masonry Inc., and Walaszek violated the Fair Labor Standards Act’s minimum wage, overtime and recordkeeping provisions when they misclassified employees working as laborers, masonry workers, crew leaders and foreman on masonry jobs in the Chicago area as independent contractors.

Investigators found the misclassification resulted in workers receiving less than the legally required federal minimum wage, and led to the employer’s failure to pay the workers overtime when they worked more than 40 hours in a workweek. Additionally, the employer failed to maintain accurate time records as required by the FLSA.

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Arthur Butler has spent decades shining a light on wage theft (MA)

Posted by National Alliance for Fair Contracting on

Monday, May 30, 2016
By DAN CROWLEY

NORTHAMPTON – Art Butler knows a thing or two about wage theft and the misclassification of workers in the construction industry.

As an inspector for the former state Department of Labor and Industries in the 1970s and ’80s, and attorney general’s office in the ’90s, he’s been shining a light on violators for decades.

At 78, Butler is still roving western Massachusetts, interviewing workers at job sites and mining payroll records, continuing a decades-long effort to stamp out fraud and protect not only workers but also companies that play by the rules.

“There’s a lot of it out there,” says Butler, who has spent the last 16 years with the Foundation for Fair Contracting of Massachusetts, a nonprofit watchdog group that targets wage theft and compliance with public bidding laws in the commonwealth. “What we try to do is keep it honest.”

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