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

Posted by National Alliance for Fair Contracting on

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.

(See Article)

Indiana seeks study to collect unpaid employment taxes (IN)

Posted by National Alliance for Fair Contracting on

By Craig Lyons
May 23, 2019, 3:00 PM

Indiana lawmakers plan to probe lost revenue when employees are listed as contractors or part-time by employers to avoid additional taxes.

A legislative study committee will look at worker misclassification and how to deal with potential lost revenue to the state. A study done by the Building Trades and Construction Council estimates the loss to the state from misclassification at $400 million, but a state-authored report posited the figure is closer to $14 million to $20 million for the state and $5 million to $7 million in local income tax revenue.

…

The state says worker misclassification happens when employees are listed as independent contractors or part-time employees, which often leaves them without overtime pay, workers’ compensation and unemployment insurance.

“This is little more than payroll tax fraud committed by unscrupulous contractors who are trying to gain an unfair competitive advantage in the marketplace,” Beck said. “Payroll fraud affects every taxpayer, shrinking public budgets, and even health care costs. It is about regaining lost tax revenue and insurance fund premiums because of dishonest contractors.”

Two reports have studied worker classification, one by the Indiana Building Trades and Construction Council, and a second from the Indiana Department of Revenue and Workforce Development and the Workers’ Compensation Board.

“There are at least four state agencies in state government – the Indiana Department of Revenue, the Indiana Department of Labor, the Worker’s Compensation Board of Indiana, and the Department of Workforce Development – that have the ability to investigate and report on this subject matter,” Beck said. “What this study would do is direct these agencies to tell us how pervasive worker misclassification is in Indiana, and what we can do to combat it.”

(Read More)

In Major Wage Theft Case, Ipswich Construction Company Cited $580,000 for Violating State Wage Laws (MA)

Posted by National Alliance for Fair Contracting on

Office of Attorney General Maura Healey – 2/28/2019

BOSTON – An Ipswich construction company and its owners have been cited $580,611 in restitution and penalties for violations of state wage and hour laws, Attorney General Maura Healey announced today.

The AG’s Office has issued six citations against ERA Equipment LLC and its owners, Kristen and Angelo Ciardiello, for a range of wage theft violations including failing to pay overtime and the prevailing wage. 

“Our investigation showed that this construction company stole hundreds of thousands of dollars from its workers,” said AG Healey. “Wage theft is a serious offense in Massachusetts and we will continue to take action when needed.”

The AG’s Office began its investigation in September 2017 after receiving a report alleging the company was not paying the proper prevailing wage. The investigation revealed that none of the company’s 13 employees received overtime pay when working more than forty hours in a week. Four employees were also not paid the appropriate prevailing wage rate while working on projects in the towns of Littleton, Scituate, and Wellesley, sometimes receiving less than half the prevailing wage rate required by law.

The investigation also revealed that the company failed to include some employees in the company’s payroll records, inaccurately reported the employees’ hours of work to avoid paying them overtime and kept inadequate and inconsistent payroll records.

The AG’s Office previously brought enforcement action against ERA and the Ciardiellos for nonpayment of wages, prevailing wage, and payroll records violations, including issuing citations that Angelo Ciardiello and his company, ERA Disposal LLC d/b/a ERA Equipment LLC, paid in 2015 for failing to pay five employees for one day of snow removal work.

(Read More)

TENNESSEE DRYWALL WORKERS WIN UNPAID OVERTIME IN DOL SETTLEMENT (TN)

Posted by National Alliance for Fair Contracting on

EMPLOYEES MISCLASSIFIED AS INDEPENDENT CONTRACTORS SHORTED ON WAGES, WORKERS COMPENSATION, SAFE WORKPLACES

November 21, 2018, 1:15PM. By Anne Wallace

Hermitage, TN – On October 19, 2018, the U.S. Department of Labor announced that Tennessee contractor, Vasquez Drywall, had agreed to pay $103,300 in back wages to workers misclassified as independent contractors and a $2,424 civil penalty. Employment misclassification is rampant in the construction industry in Tennessee and throughout the country. The practice deprives employees of overtime pay, workers compensation insurance and basic workplace safety protections. Undocumented construction workers are particularly at risk because they are unlikely to bring lawsuits or seek other enforcement action to preserve their rights.

VASQUEZ DRYWALL — PART OF A BIGGER PROBLEM

DOL Wage and Hour Division investigators found that Vazquez Drywall violated the Fair Labor Standards Act’s (FLSA) overtime requirements by inaccurately classifying employees as independent contractors and paying them piece rates or flat salaries regardless of whether they worked more than 40 hours a week. The Division also found the employer failed to keep accurate payroll records for these workers. “Even if employees are paid piece rates, or on salaries,” noted Wage and Hour Division District Director Nettie Lewis, “they are typically still due overtime when they work more than 40 hours in a week.”

Since the wage order and fine were the products of a settlement, the details of what actually occurred and how many workers were affected remain unclear. What is clear, however, is that underpayment is a chronic problem in the Tennessee construction industry.

In June 2018, workers brought a federal lawsuit against two subcontractors involved in the construction of a new J.W. Marriott in downtown Nashville. The lawsuit claims that Mr. Drywall and First Class Interiors violated the FLSA by failing to pay workers the federal minimum wage or overtime pay for hours in excess of the normal 40-hour work week. It alleges that the company “willfully filed fraudulent information returns [with the IRS] classifying the plaintiffs as independent contractors rather than employees.”

In 2013 the Nashville Post reported that “[b]ased on estimates the [Tennessee Department of Labor and Workforce Development] provided, there are between 21,990 and 36,680 misclassified and unreported construction industry workers in Tennessee. Misclassified and unreported workers are estimated to range from 11 percent to 22 percent of all workers in the construction industry statewide.”

(Read More)

New York Officials Battle Wage Theft in Construction Industry (NY)

Posted by National Alliance for Fair Contracting on

By LUIS FERRÉ-SADURNÍ
DEC. 6, 2017

For months, Ariel Ortega’s paychecks would bounce when he went to deposit them at his bank each Friday. He says he never saw the promised overtime pay for his extra hours on Saturdays remodeling a 12-floor apartment building in Brooklyn.

Mr. Ortega considered quitting. But when he voiced concerns, his boss, Michael Stathakis, would grow agitated and threaten not to pay the remainder of what he was owed if he quit, Mr. Ortega said.

“It was December, and it was cold, so it would be hard to get another construction job,” Mr. Ortega, who is owed hundreds of dollars in wages and overtime pay, said in Spanish. “I had to stick through it.”

Mr. Ortega, 30, was vindicated last week when his employer, Whisk Remodeling Corp., owned by Mr. Stathakis, pleaded guilty to fraud, admitting he failed to pay Mr. Ortega and dozens of other workers, many of them immigrants, more than $90,000 in wages.

Mr. Ortega’s case is not unique – and prosecutors in New York have taken note.

District attorneys in all five boroughs of New York City and in other counties, in coordination with state agencies, have ratcheted up efforts against wage theft in the construction industry. A string of indictments this year detailed more than $2.5 million in unpaid wages for more than 400 construction workers in Manhattan and beyond, Cyrus R. Vance Jr., the Manhattan district attorney, said at a news conference on Monday.

(Read More)

MASSACHUSETTS COMPANIES TO PAY $2.4M IN OVERTIME, DAMAGES TO 478 WORKERS, MOST INTENTIONALLY MISCLASSIFIED AS INDEPENDENT CONTRACTORS

Posted by National Alliance for Fair Contracting on

BOSTON – A Lunenburg construction company and a Framingham company it used to avoid its legal responsibilities as an employer have been ordered to pay a total of $2,359,685 in back wages and liquidated damages to 478 employees and take other corrective actions to prevent future violations of federal labor law. Under a consent judgment they will also pay $262,900 in civil money penalties due to the willful nature of their violations.

An investigation by the department’s Wage and Hour Division found that Force Corp., AB Construction Group Inc. and employers Juliano Fernandes and Anderson Dos Santos misclassified the bulk of their employees as independent contractors to avoid paying them overtime wages and other benefits to which they were entitled under the Fair Labor Standards Act. In addition, the defendants used a combination of payroll checks and cash/check payments to pay their employees straight time when overtime pay was required, and kept inadequate and inaccurate time and payroll records.

“American workers go to their jobs each and every day and work hard to help their employers turn a profit,” said U.S. Secretary of Labor Thomas E. Perez. “To be cheated out of wages and denied other workplace protections by an employer who deliberately flouts the rules compounds the struggles too many middle class Americans already face. Workers who play by the rules deserve nothing less than to be paid what they are owed.”

(Read More)