Federal Court Orders 4 Arizona Contractors to Pay Over $3.2m in Owed Wages, Damages to 890 Workers after Department of Labor Investigations

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: April 22, 2024
Release Number: 24-608-NAT

Employers also liable for $95K in penalties for overtime, minimum wage violations

PHOENIX – The U.S. Department of Labor announced today that efforts to protect residential construction workers from unlawful pay practices have recovered a total of $3.2 million in wages and damages from four Arizona contractors for 890 workers.

After a series of investigations, the department’s Wage and Hour Division determined that 4-E Painting LLC and Liberty Constructors LLC in Mesa and BCK Coatings Inc. and Geronimo Wall Systems LLC in Tempe willfully and recklessly shortchanged the affected workers and violated the overtime and minimum wage provisions of the Fair Labor Standards Act.

The division’s investigations found:

  • 4-E Painting LLC did not pay overtime wages when the employer paid employees piece-rate wages for painting work or a combination of hourly wages and piece-rate wages. The division determined 4-E Painting owed $432,633 in overtime wages and an equal amount in liquidated damages to 158 workers. The department also assessed $24,732 in penalties.
  • Liberty Constructors LLC denied employees required overtime pay and tried to conceal its violations by falsely showing a higher hourly rate or fewer hours worked on payroll records. The division found the contractor owes $401,049 in unpaid wages and $401,049 in liquidated damages to 100 employees. The department also assessed $17,900 in civil penalties.
  • Geronimo Wall Systems LLC denied overtime pay to 195 employees for hours over 40 in a workweek. The lath, stucco, siding and stone contractor misclassified many of the employees as independent contractors. The division determined the employer owes $443,115 in overtime wages and $443,115 in damages to 195 employees, and the department assessed $22,770 in civil money penalties.
  • BCK Coatings Inc. failed to pay required overtime wages for hours over 40 in a workweek. The apartment remodeling contractor misclassified employees as independent contractors, made improper deductions of up to $20 per week from employees’ pay, required workers to cash their paychecks at a check-cashing business that charged a fee and failed to pay one employee for eight weeks of work. The investigation found BCK owes $360,000 in unpaid minimum and overtime wages and an equal amount in liquidated damages to 437 employees. The department also assessed $30,000 in penalties for the employer’s willful violations.

“Our investigators have found that schemes to pay straight-time for all hours worked and avoid paying required overtime rates at time and one-half are pervasive among employers in Arizona’s construction industry,” said Wage and Hour Division District Director Eric Murray in Phoenix. “These unlawful practices create the false impression that piece-rate workers’ wages comply with the Fair Labor Standards Act when, in fact, these employees are being stripped of their earned wages. The Wage and Hour Division is committed to holding employers accountable and ensuring that they do not obtain an unfair competitive advantage by denying workers their full wages.”

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Illinois accuses Bridgeview construction company of stealing wages from union carpenters

Posted by National Alliance for Fair Contracting on

Chicago Sun Times – By Mitch Dudek Sept 2, 2022

Drive Construction allegedly funneled payments to carpenters through sham subcontractors to pay less than what the state’s overtime and prevailing wage laws require

A Bridgeview-based construction company is accused of wage theft and using an elaborate scheme to underpay dozens of union carpenters, according to a lawsuit filed by Illinois Attorney General Kwame Raoul’s office.

Between 2015 and 2020, Drive Construction Inc. obtained contracts for public works projects in the Chicago area, such as schools and public housing apartments, worth nearly $40 million, according to the lawsuit. The contracts required Drive to pay its carpenters, who are represented by the Mid-America Carpenters Regional Council, Illinois-mandated prevailing wages.

But Drive funneled payments to carpenters through sham subcontractors to pay the carpenters less than what the state’s overtime and prevailing wage laws require and to dodge the cost of other legally required benefits and protections, according to the lawsuit filed Thursday in Cook County Circuit Court.

“Drive passed money through two layers of sham subcontractors before using its construction foremen to distribute those payments to workers on Drive’s projects as a flat, per-week payment,” the suit alleges. “This multitiered funneling of wage payments enabled Drive to make it look like the workers were not Drive’s employees — when, in fact and by law, they were.”

Payments were typically made in cash or by money order to avoid traceability and did not reflect the overtime and prevailing wage rates that they should have, according to the suit.

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Investigation Recovers $246k In Back Wages for 306 Painters, Drywall Workers Denied Overtime by Misclassification as Independent Contractors

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: August 4, 2022
Release Number: 22-1562-DAL

​​​​​​​Department of Labor finds errant pay practices hurt workers jointly employed

NEW ORLEANS – The U.S. Department of Labor has found that the wages of hundreds of painters and drywall workers employed by a Louisiana contractor on construction projects, including work at New Orleans’ Superdome, were tackled for a loss when their employer misclassified the workers as independent contractors, a common industry violation.

Investigators with the department’s Wage and Hour Division found that PL Construction Services misclassified its workers as independent contractors. Many of the employees worked on projects involving Lanehart Commercial Painting – operating as Lanehart – including work at the Superdome. PL Construction Service paid the misclassified workers straight-time rates for all hours, including those over 40 in a workweek which violated the Fair Labor Standards Act’s overtime regulations. They also failed to maintain complete and accurate records of hours their employees worked, another FLSA violation.

The division determined that during the investigation period, a joint employment relationship existed between PL Construction Services and Lanehart for workers employed on Lanehart projects. Among other factors, they found the following conditions:

PL Construction Services employees worked almost exclusively for Lanehart.
At work sites, Lanehart supervised PL Construction Services’ workers, determined the number of workers needed and when, and kept records of hours PL Construction Services’ employees worked.
PL workers’ labor was essential to Lanehart’s operations and occurred on Lanehart’s projects.
The investigation led to the recovery of $246,570 in overtime back wages for 306 employees. Lanehart paid $199,342 to 243 employees for which the division found them jointly liable. PL Construction Services paid the remaining balance of $47,228 to 76 employees.

PL Construction Services LLC is based in St. Rose, and Lanehart Inc. is based in Baton Rouge.

“Too often we find workers denied wage protections such as the right to overtime pay and other benefits – including unemployment insurance, workers’ compensation and health insurance – by employers who misclassify them as independent contractors,” said Wage and Hour District Director Troy Mouton in New Orleans. “Our investigation shows the costly consequences employers face when they or their subcontractors fail to comply with the law. When we determine a joint employment relationship exists, the Wage and Hour Division will hold all responsible employers accountable for the violations.”

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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.

(See Article)

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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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NY rail company to pay overtime violations on projects in Massachusetts

Posted by National Alliance for Fair Contracting on

By: Ashley Shook
May 16, 2022

BOSTON (WWLP) – A New York-based rail system company was issued a citation and will pay more than $220,000 for overtime and payroll violations on projects in Massachusetts.

According to the Massachusetts Attorney General’s Office, Railworks Track Systems, Inc. and its President Gene J. Cellini, will pay more than $220,000 in restitution and penalties to resolve allegations that it failed to pay the proper overtime rate to workers on public works projects in the Berkshires, on Cape Cod, and in Framingham, and failed to submit accurate certified payroll records, Attorney General Maura Healey announced.

Restitution will be provided for 84 employees that were not paid properly for five railroad improvement projects in Hyannis, Falmouth, Framingham, Great Barrington, Lee, Lenox, Pittsfield, Sheffield, and Stockbridge.

“Companies must pay their employees the wages they’ve earned and are legally entitled to,” said AG Healey. “We are pleased to have secured this relief for the more than 80 affected workers, and hope that this sends a message to employers that we hold them accountable if they do not properly compensate their workers.”

The Attorney General’s Office received a referral in 2020 from the Foundation for Fair Contracting of Massachusetts, alleging that Railworks Track Systems was improperly paying its employees. The investigation revealed the payroll records did not include employee addresses, and that the company claimed a type of fringe benefit that is not permitted under Massachusetts prevailing wage laws. The fringe amounts were paid, but the amounts did not include overtime.

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Concrete contractor backpay order approaches $1 million

Posted by National Alliance for Fair Contracting on

February 11, 2022
Concrete News

A judgment in the U.S. District Court for the Eastern District of New York orders Macedo Construction Inc., Macedo Contracting Services Inc., Odecam Concrete Supply Corp. and Manuel Macedo. to pay 99 workers a total of $987,591 in back wages and liquidated damages, plus $53,249 in civil penalties to the Department of Labor (DOL).

The action settles charges of willful Fair Labor Standards Act (FSLA) violations identified in a DOL Wage and Hour Division investigation. It found Manuel Macedo and his Bellport, N.Y. companies failed to combine the hours laborers worked at the three commonly owned businesses, and paid them with multiple checks to evade overtime requirements. Each separate check showed the employees logged less than 40 hours per workweek when they actually worked a combined total of up to 48 hours per week. The companies also neglected to pay employees for time spent traveling from work yards to jobsites, and retain accurate records of the employees’ work hours and pay rates.

“The scheme by Macedo Construction, Macedo Contracting Services, Odecam Concrete Supply Corp. and Manuel Macedo deprived their employees of nearly $491,000 in hard-earned wages over three years,” says WHD District Director David An. “In addition to the back wages, the employer must pay these workers an equal amount in liquidated damages, plus interest. We encourage other employers to consider this investigation’s outcome, review their own pay practices and contact the Wage and Hour Division to avoid similar violations. The consequences of noncompliance with federal labor laws can be serious and expensive.”

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Column: Wage theft is prevalent, cheats workers in Ohio (OH)

Posted by National Alliance for Fair Contracting on

January 31, 2020

Too many bosses in the Columbus area and throughout Ohio are finding ways to cheat their hard-working employees. It’s called wage theft. These unethical employers steal money from workers and make it harder for law-abiding employers to compete.

Here are some of their methods: paying less than the minimum wage; not paying overtime; violating prevailing wage laws on public construction projects; confiscating tips from restaurant wait staff; misclassifying regular employees as self-employed independent contractors; forcing employees to work off-the-clock before and after their regular shifts; and denying workers legal meal breaks. The list of unscrupulous practices is almost endless. …

Mayor Andrew J. Ginther and the Columbus City Council have recognized the problem here. They are considering legislation aimed at curbing wage theft by any developer who receives a tax abatement or other tax incentive. If enacted, this legislation would be a good first step in combating abuses. Four years ago, Cincinnati enacted a similar ordinance. Franklin County suburbs should follow suit.

Central Ohio’s overall economy is healthy and growing. However, not everyone is benefiting. Too many folks are being left behind, forced to work two or three jobs to make ends meet. Dishonest wage-theft violators know this. They prey on the most vulnerable of our fellow citizens.

These crooked employers should be held accountable. Our elected officials and business leaders should tell repeat offenders either comply with the law or get out of central Ohio. We don’t need you and your abusive practices.

Mark Fluharty is executive director of the Central Ohio Labor Council of the AFL-CIO.

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XPO reaches $5.5M misclassification settlement (CA)

Posted by National Alliance for Fair Contracting on

AUTHOR: Matt Leonard
PUBLISHED: Aug. 22, 2019

Dive Brief:

  • XPO Logistics has reached a settlement with 3,772 plaintiffs in a case accusing the company of breaking California labor laws by requiring the plaintiffs to work off-the-clock without pay, failing to pay overtime and other allegations, according to a motion for settlement approval filed this past Friday by the plaintiffs.
  • The $5.5 million settlement will result in an average payout of $935.18 for each plaintiff, 1,981 drivers and 1,791 helpers, according to court documents filed in the U.S. District Court of the Northern District of California court this week.
  • The plaintiffs have requested the settlement be given preliminary approval and for the court to set a date for the final approval hearing. A proposed schedule filed by the plaintiffs lists Sept. 4 as the potential date for the preliminary approval hearing.

Dive Insight:

XPO will sometimes contract with other carriers to provide last-mile delivery services. The plaintiffs in this case were drivers and helpers for these contract carriers who allege XPO is the lawful employer in these situations because it had “extensive and pervasive control over the drivers’ and helpers’ workday,” according to the settlement documents.

The original complaint outlines various California labor laws the plaintiffs accused XPO of not abiding including unpaid overtime, not paying minimum wage, depriving contract workers of meal and rest periods, and failing to pay wages in a timely manner.

…

The plaintiff, who accepted the settlement on behalf of the class, was willing to settle because he “recognizes the risk that the Court may determine Plaintiff and the putative class were not employees of XPO,” the settlement documents read.

XPO argues that even if it was considered an employer it would be a co-employer with the contract carriers.

…

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Ironworkers, Welders Recoup $6M in Wages (NY)

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Some 500 ironworkers and welders will receive $6 million in wages and overtime pay improperly withheld by a Queens company. Matthew Chartrand, business manager for Ironworkers Local 361, said the settlement under which AGL Industries has begun paying the workers meant that ‘one of the bad players in the construction field is being brought to justice.’

By: RICHARD KHAVKINE / Aug 19, 2019

A Maspeth, Queens, steel-fabrication company copped to cheating hundreds workers out of overtime pay and wages, and agreed to pay out more than $6 million owed to welders and ironworkers, according to its plea deal with the state Department of Labor following a joint investigation with the Manhattan District Attorney’s office.

AGL Industries pleaded guilty to third-degree grand larceny and began paying 499 workers the money owed them with a $1.5-million allocation Aug. 13, Manhattan DA Cyrus Vance Jr.’s office said.

‘Bad Player’

The balance will be paid over five years in what is the largest single wage recovery in the DOL’s history.

The company also admitted to reporting fraudulent financial information and will settle through a $260,855 payment to the state’s Unemployment Insurance fund, the DA’s office said. A company official, Dominick Lofaso, also pleaded guilty to a class D felony for grand larceny.

Welders and ironworkers had complained to company officials about underpayment but were essentially told “tough,” according to the DA’s office. They then took their grievances to Ironworkers Local 361, in Ozone Park, and the DA’s office in February 2018. A subsequent joint investigation by the DA’s Construction Fraud Task Force and the DOL revealed that the company withheld overtime and other wages from workers during a roughly four-year period starting in November 2013.

Matthew Chartrand, business manager Local 361, hailed the settlement, saying “one of the bad players in the construction field is being brought to justice. Thanks to all-this is a great job for the benefit of workers!”

The DA’s office said the settlement represented a “monumental victory for construction workers,” adding that exploitation of construction workers is widespread despite that trade’s “treacherous” working conditions.

‘Landmark Conviction’

In the statement, DA Vance said the “landmark conviction” would restore “rightful earnings” to the ironworkers and welders. He said the Construction Fraud Task Force has returned about $7.4 million to workers since its creation.

“We are committed to fighting wage theft, which impacts employees across all industries, but is especially common in the construction industry,” he said the statement. He urged workers who believe they have been cheated out of earnings to contact the task force by text message at (646) 712-0298. Messages can be submitted anonymously.

The DOL last year paid about 35,000 workers nearly $35 million it had collected from companies that engaged in wage theft and public-works violations. The department has returned nearly $300 million in stolen wages to 280,000 workers since 2011.

“Wage theft and fraud have no place in New York, and unscrupulous companies who break the law will be held accountable,” Department of Labor Commissioner Roberta Reardon said in the statement from the DA’s office.

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