unnamed

Central Pennsylvania contractor charged for theft of workers’ wage and benefits (PA)

Posted by National Alliance for Fair Contracting on

Sep 30, 2019

Harrisburg – Attorney General Josh Shapiro announced charges against a Centre County contractor after a Grand Jury investigation found that he underpaid workers on Prevailing Wage projects totaling more than $64,000 in wages and benefits for at least five years.

Scott Cameron Good, 56, of State College, is the owner of Goodco Mechanical, Inc., a mechanical contractor based in Centre County who worked on public works projects in Clearfield, Centre and other Pennsylvania counties. Good was charged with Perjury, Tampering with Public Records, and False Swearing. Goodco was charged with Theft by Unlawful Taking, Deceptive and Fraudulent Business Practices and related charges.

The charges are the result of a 21-month Statewide Grand Jury investigation that originated from allegations of theft of wages and benefits from employees on a $16 million public works project in Clearfield County for the Pennsylvania Department of Transportation in 2014. The investigation found that Good and Goodco violated prevailing wage laws by underpaying wages and claiming unlawful benefits credits on the Clearfield County PennDOT project, as well as other prevailing wage projects since at least 2010.

Scott Good previously worked as Vice President for Allied Mechanical and Electrical, Inc. In 2006, the company was found to be in violation of Pennsylvania prevailing wage laws and was sanctioned by the Pennsylvania Department of Labor and Industry for the same practice that he is accused of operating at Goodco.

“Pennsylvania’s prevailing wage laws are designed to protect workers and ensure an even playing field in the bidding process for government contracts,” said Attorney General Josh Shapiro. “The defendants are charged with violating these laws and cheating our hardworking laborers out of thousands of dollars in wages and benefits. Scott Good already knew that his conduct was illegal because his former company was sanctioned for similar violations more than a decade ago, yet he brazenly flouted the law again and continued the scheme at Goodco. I’m proud to work with Clearfield County District Attorney William Shaw Jr. to put a stop to this theft and stand up for workers.”

“Clearfield County laborers deserve to be paid fairly for their hard work,” said District Attorney William Shaw, Jr. “The defendants allegedly took advantage of their workers and violated prevailing wage laws by operating a misclassification scheme inside the company. My office will work alongside the Attorney General’s Office to hold Scott Good and Goodco accountable for their crimes and deliver results for the workers he underpaid.”

(Read More)

Construction Apprenticeship Training in Pennsylvania (PA)

Posted by National Alliance for Fair Contracting on
Publication Date: February 22, 2019
Executive Summary 
After a deep industry decline in and after the Great Recession, the Pennsylvania construction industry has in the last several years again faced a shortage of skilled craft workers. This shortage could grow more severe in the years ahead due to an aging construction workforce, leading to high rates of retirement. Since the early 1990s, the share of the Pennsylvania construction industry workers aged 40 and over has risen from less than a third to nearly half.
In the context of emerging skills shortages, this report evaluates the role of apprenticeship training in meeting Pennsylvania’s need for skilled construction workers, relying primarily on official government data. The report highlights the distinction between apprenticeship programs governed by joint committees of labor and management, hereafter referred to as joint or union programs, and programs governed unilaterally by individual employers or employer associations (non-union programs).
  • Union programs account for nearly six out of every seven construction apprentices in Pennsylvania. Over the 2000 to 2016 period, 85 percent of construction apprentices in Pennsylvania participated in joint labor management programs and 15 percent in non-union, management-only, programs.
  • Union programs account for nine out of every 10 Pennsylvania construction apprentices who are not white and male. Union programs had 4,883 Non-White and Hispanic male construction apprentices from 2000 to 2016 and non-union ones had 568. Over this same period, 1,083 female apprentices participated in union programs, and 83 females participated in non-union programs.
  • Union apprenticeship programs graduate more than six veterans for every one veteran graduated by nonunion programs. Nearly 3,000 (2,749) veterans have participated in union construction apprenticeship programs in Pennsylvania since 2000, compared to 516 veterans who participated in non-union ones.
  • Graduation rates are higher in union apprenticeship programs, including for minorities, women, and veterans. Of those enrolled in union apprenticeship programs from 2000 to 2012, 56% had completed their apprenticeship by 2016, compared to a completion rate of 44% for non-union programs. For minority male and female apprentices, and for veterans, graduation rates were about 25% higher for union apprenticeship programs than non-union.
  • Wage rates at entry and especially at completion are higher in union apprenticeship programs. Starting wages for union apprentices are 36% higher than for non-union apprentices. Upon completion (or “exit”), the union apprentice pay premium compared to non-union apprentices climbs to 60%.
  • Higher shares of blue-collar union trades in Pennsylvania have a two- or four-year college degree than nonunion trades and the share of blue-collar union trades with a college degree has risen to one in four. The share of unionized blue-collar trades that have a two-year or four-year college degree has more than doubled since the early 1990s, to just over 25%. The share of non-union trades that have a college degree has also risen but remains 10 percentage points below the union share.

(Read More)

(PDF Copy of Report)

Associated Builders and Contractors, Eastern PA Chapter, Inc. et al v. County of Northampton

Posted by National Alliance for Fair Contracting on

“Four municipalities recently passed responsible contractor ordinances which specify certain criteria that a contractor must satisfy to be eligible to perform work valued over a certain monetary threshold for those municipalities. … the ordinances’ require… that all bidders on qualifying public works projects participate in a so-called “Class A Apprenticeship Program” … expense of their nonunion competitors and taxpayers. The plaintiffs … arguing that the apprenticeship-program-participation requirement is not rationally related to any legitimate government purpose.

…

…the court agrees with the defendants that ERISA does not preempt the ordinances because they do not “refer to” or have a “connection with” ERISA-covered plans … and even if they did, the market participant exception would preclude preemption here.

(Read More)

Union: Construction tax fraud costs governments $450B annually (PA)

Posted by National Alliance for Fair Contracting on

Bob Bauder
Monday, April 15, 2019 3:37 p.m.

Several hundred carpenters’ union members and public officials rallied Monday in Downtown Pittsburgh to call for an end to construction industry fraud.

Union officials said unscrupulous contractors and labor brokers rob the public of federal and local tax revenue by paying workers cash “under the table,” misclassifying them as independent contractors and failing to pay such benefits as workman’s compensation and unemployment.

The fraud costs local governments across the United States an estimated $450 billion annually in lost tax revenue, officials said.

“When you talk about tax fraud, it’s about people that are cheating,” said Bill Waterkotte, eastern district vice president of the Keystone Mountain Lakes Regional Council of Carpenters. “They’re not paying taxes. They’re paying cash. Four hundred and fifty billion (dollars), in evading taxes. That could go to building our roads and bridges, our schools, our veterans, helping the people who need help, and they’re stealing it.”

The union estimates fraud costs Pennsylvania governments about $200 million each year, but offered no specifics for the Pittsburgh region.

…

Pittsburgh City Council late last year approved a resolution proposed by Councilman Corey O’Connor that created a task force to investigate the issue. O’Connor said the members plan to offer future legislative remedies to council and the mayor.

…

“We are going to go after those bad workers, those people that take our tax money, that take your jobs because subcontractors and contractors are undercutting city bids. We have to stop that,” O’Connor said.

(Read More)

unnamed

Bill package aims to curb wage theft (PA)

Posted by National Alliance for Fair Contracting on

BY MELINA DRUGA | APRIL 4, 2019

Sen. Vincent Hughes (D-Philadelphia/Montgomery) recently proposed two bills aimed at protecting workers from wage theft.

Wage theft is when employers misclassify employees. Misclassification can cause any of the following scenarios: employees are not paid for all hours worked, employees are paid below the minimum or promised wage, employees are denied pay and access to benefits, employees are not paid at all, or employers make illegal deductions or steal tips from tipped employees.

The first bill would require employers to post information about the state’s Wage Payment and Collection Law. This information would include the definition of wage theft and worker remedies for violations. Failure to do so would result in a fine of up to $500.

The second bill would suspend or disbar violators of the law from participating in commonwealth procurement contracts.

“We have to strengthen our laws to protect working people and their right to get paid for the work they do,” Hughes said. “Employees need to know the law ensures they are paid for all hours worked, including overtime. Beyond that, we have to send a clear message to unscrupulous businesses that we will not tolerate wage theft.”

In 2013, wage theft cost Pennsylvania workers $258 million, according to Community Legal Services Philadelphia.

(Read More)

Gov. Wolf signs executive order to create Keystone Economic Development and Workforce Command Center (PA)

Posted by National Alliance for Fair Contracting on

BY KEVIN RANDOLPH  |   FEBRUARY 21, 2019

Gov. Tom Wolf signed Tuesday an executive order to create the Keystone Economic Development and Workforce Command Center, which will work to expand collaboration between government and the private sector to address the skills gap and worker shortages.

“Our economy is transitioning and it’s a race to keep up,” Wolf said. “We either strengthen workforce development or we risk falling behind. We must be bold and ambitious and break from the status quo.”

The command center will make recommendations to improve coordination of workforce and economic development programs across state agencies and identify barriers that may prevent people from working or prevent businesses from hiring skilled workers.

The command center will also review the recommendations of the Auditor General and implement those it believes will deliver the best results. It will also monitor implementation and progress of the workforce and education proposals outlined in the governor’s Statewide Workforce, Education and Accountability Program (SWEAP) proposal.

Wolf appointed three leaders from the private sector and three cabinet secretaries to lead the command center. They include Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry; Tony Bartolomeo, co-chair of Team Pennsylvania; Rick Bloomingdale, president of the AFL-CIO; Acting Secretary Kathy Boockvar, Department of State; Secretary Dennis Davin, Department of Community and Economic Development; and Secretary Jerry Oleksiak, Department of Labor & Industry.

(Read More)

Report: Construction Contractors Cheating Workers, Taxpayers (PA)

Posted by National Alliance for Fair Contracting on

By John Nichols
JANUARY 7, 2019

January 14, 2019

HARRISBURG, Pa. – Unscrupulous contractors in southeast Pennsylvania routinely are violating labor laws and victimizing customers, including state and local government, according to a new report.

The report from the Keystone Research Center found many contractors in the regional Philadelphia construction industry are in a race to the bottom.

Stephen Herzenberg, author of the report, calls that “destructive competition” – cutting costs by misclassifying workers as independent contractors, cheating them out of overtime pay, investing little in worker skills and in some cases operating unsafely.

“When construction contractors and subcontractors compete by violating the law, wage theft, threatening workers’ health and safety, in the end nobody else wins,” he states.

The report says imposing stiffer penalties for labor law violations and directing more resources to enforcement agencies would help safeguard workers, law abiding contractors and taxpayers.

Herzenburg points out that effective enforcement can pay for itself by directing revenue from fines and penalties to enforcement agencies, and it can change the current landscape of the construction industry.

(Visit the Keystone Research Center Website)

(View PDF copy of Study – Illegal Labor Practices in the Philadelphia Regional Construction Industry: An Assessment and Action Plan)

(Read More)

Illegal Labor Practices in the Philadelphia Regional Construction Industry: An Assessment and Action Plan (PA)

Posted by National Alliance for Fair Contracting on

Authors: Russell Ormiston, Stephen Herzenberg
Publication Date: January 11, 2019

This brief, buttressed by the companion national literature review by Professor Russell Ormiston of Allegheny College, presents multiple sources of complementary evidence that point to a single, simple conclusion: US and Pennsylvania labor law and labor standards are routinely violated by many contractors in the Southeast Pennsylvania regional construction industry. These violations threaten to transform growing shares of the construction sector-an industry that still provides significant numbers of well-paid jobs to highly skilled non-college workers-into low-wage, low-skill jobs, further undermining the region’s middle class and increasing already-gaping inequality.

Labor standards violations victimize workers and their families, taxpayers, law-abiding contractors, and construction customers including public sector entities.

* Workers get cheated of the pay they have earned and need to support their family.

* Local businesses suffer because lower-wage workers, some from outside the region, consume less.

* Taxpayers lose because worker victims of wage theft pay less in taxes. Taxpayers also lose in some cases because irresponsible contractors win public contracts awarded to low bidders and then use “change orders” to increase project cost beyond the original bid.

* As well as losing income, workers and their families may suffer because of injuries suffered on the job. Such injuries are more common among contractors who violate labor standards and, in some cases, rely on informal labor markets essentially outside the purview of labor law.

* Law-abiding contractors lose business and profits-and pay higher unemployment insurance taxes and workers compensation premiums-because their competitors underpay. Law-abiding contractors also face pressure to begin violating standards and cheating workers themselves-in a potential “if you can’t beat ’em, join ’em” downward spiral that spreads destructive competition.

(Read More)

(Read Full PDF Report)

Council passes resolution to examine construction industry fraud (PA)

Posted by National Alliance for Fair Contracting on

Ashley Murray
December 27, 2018

Allegations of widespread fraud in the construction industry led Pittsburgh City Council on Thursday to vote 8-0 to create a new task force, but there wasn’t unanimity on the nature and degree of the problem.

“Basically we know that this activity is happening and we’re losing tax revenue from it,” said the bill’s sponsor, councilman Corey O’Connor, though he did not have specific figures.

The resolution, co-sponsored by councilwoman Darlene Harris, directs the mayor to convene representatives from council, and the offices of the city controller, Allegheny County district attorney, as well as trade unions and the state’s Department of Labor and Industry. It would explore tax fraud – sometimes referred to as paying people under the table – and other “unfair” practices within the city’s construction industry.

Past approaches to construction industry fraud – and even some recent pronouncements by advocates for the task force – have referenced undocumented workers. Thursday, though, backers emphasized that the bill isn’t about immigration.

Members of the United Brotherhood of Carpenters gathered in Council Chambers Thursday to support the bill’s passing.

“We have people getting paid cash on the job sites, and that’s not fair,” said Steve Mazza, representative for the Keystone Mountain Lakes Regional Council of Carpenters, based in Collier. “I have to pay taxes. Everybody should be paying taxes. Why is that being unchecked?”

Mr. Mazza’s union claims that Pennsylvania has lost hundreds of millions of dollars in taxes because of industry fraud, though it did not detail that figure Thursday.
The scope of loss for the city is unclear.

(Read More)

Pittsburgh creates construction fraud task force (PA)

Posted by National Alliance for Fair Contracting on

By Kim Slowey
Jan. 3, 2019

Dive Brief:

  • This Pittsburgh City Council voted last week to establish the Joint Task Force on Construction Industry Fraud, which will work to identify and combat “unfair trade practices, including tax fraud” among the city’s construction businesses.
  • The resolution takes particular aim at construction companies that commit wage violations that result in underpayment or nonpayment of taxes, as well as too-low pay rates that prevent some workers from being able to support their families. The task force will not focus on the practice of hiring undocumented workers, however.
  • The group will be made up of representatives from the city council; mayor’s office; Pittsburgh Regional Building and Construction Trades Council; Allegheny County District Attorney’s Office; Pennsylvania Department of Labor and Industry; and the city’s Department of Permits, Licenses and Inspections.

Dive Insight:

According to the resolution, construction is the fastest-growing industry in Pittsburgh. It states that fraud-related violations of city ordinances not only threaten the health and safety of residents and workers but “threaten the viability” of businesses that operate legitimately. The group will review existing industry practices in Pittsburgh and then make code and policy recommendations to the council and mayor.

(Read More)