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City to deny permits to companies with wage theft convictions (TX)

Posted by National Alliance for Fair Contracting on

POSTED: 05:22 PM MST Mar 08, 2016
UPDATED: 07:24 PM MST Mar 08, 2016

EL PASO, Texas –
The El Paso City hall is cracking down on wage theft, adding changes to an existing ordinance that will prohibit companies in some industries from conducting business within city limits if they’ve been convicted of stealing wages from employees.

The council on Tuesday voted 5 to 1 to approve the tougher changes, with Rep. Michiel Noe as the only no vote. Representatives Cortney Niland and Larry Romero were absent. Romero resigned last month but is still a holdover until his seat is filled.

Businesses with a wage theft adjudication would not qualify for certain city permits, licenses or registration. The industries affected are food handling establishments, laundries, dealers of second hand goods, vendors, contractors and flea market operators.

The current city ordinance bars companies with wage theft adjudications from winning city contracts.

More than two dozen people went to the city council meeting expressing support for the ordinance expansion. “El Paso does not need employers who are thieves,” UTEP Professor Kathy Staudt told the council.

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Committee votes to close living wage loophole

Posted by National Alliance for Fair Contracting on

Thursday, December 17, 2015
by Vicky Garza

 

 

City Council’s Economic Opportunity Committee approved a resolution at its meeting on Monday that would effectively close a loophole that allows some city contractors to avoid paying workers a living wage.

Both Bob Batlan, of Austin Interfaith, and Emily Timm, deputy director of Workers Defense Project, spoke in favor of the resolution.

“This is simply closing a loophole that currently allows bad actors to subcontract out and not comply with that living wage standard,” said Timm. She added that the requirements will ultimately “protect responsible contractors who are doing their best to comply with the city’s living wage standards that are already in place in the purchasing department.”

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Houston contractor indicted for making false statements about paying prevailing wage on CMHA jobs

Posted by National Alliance for Fair Contracting on

FOR IMMEDIATE RELEASE
Tuesday, November 17, 2015

 

A 61-count indictment was filed charging Marcus Butler, of Houston, with making multiple false statements to the United States Department of Housing and Urban Development and the United States Department of Labor while defrauding the Cuyahoga Metropolitan Housing Authority and several of his former employees, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, announced that.

The indictment alleges that Butler ran an electrical company called LB Electric of Northeast Ohio in the Cleveland area.  Butler and his company agreed to work as subcontractors on a number of CMHA construction projects, including projects at the Riverside Park, Union Square and Delaney Village properties.

Butler, as a subcontractor on the CMHA project, agreed to pay his employees a prevailing wage while they worked on these CMHA projects and further agreed to provide certified weekly payrolls to CMHA. Although Butler submitted numerous certified payrolls claiming that he paid a prevailing wage to his employees, he did not in fact make such payments to his employees and instead submitted false certified payrolls to conceal this conduct. As a result of his conduct, Butler overstated the amount of wages paid to his employees, and thus underpaid his employees, by approximately $126,514, according to the
the indictment.

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First Reported Conviction Under Texas’ New Wage Theft Law

Posted by National Alliance for Fair Contracting on

by Scott Braddock on Wed, 09/16/2015 – 8:30am

 

The first reported conviction of a contractor guilty of wage theft was handed down by a jury in El Paso this past week. The case against the employer was pursued under a law passed in 2011 by a local lawmaker who has made stamping out wage theft one of his personal causes.

The victim, Esteban Rangel, said he was owed $2,295 by the owner of Sun City Roofing, John Najera. Najera did not have any prior convictions, which is why the 180 day jail sentence announced in court was reduced to three months of probation. In addition, Najera must pay a fine of $5,000 and Rangel will receive $2,295 in restitution.

The lawmaker who pushed for passage of the state’s new wage theft law, Sen. Jose Rodríguez, said the conviction is an important step forward and will hopefully send a message to other unethical business owners. The bill he successfully championed in 2011 allows for criminal prosecution for wage theft if – with the intent to avoid payment – an employer fails to make full payment after receiving notice.

“This conviction is a landmark in the fight against wage theft,” Rodríguez said. “Unscrupulous employers who intentionally steal from employees now know there are real consequences for robbing workers of the pay that they’re owed,” said the El Paso Democrat.

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DFW Television Report Puts Spotlight on Worker Misclassification

Posted by National Alliance for Fair Contracting on

by Scott Braddock on Wed, 04/29/2015 – 7:36am

In an explosive investigation that drew the attention of many average Texans over the weekend, WFAA Television in Dallas/Fort Worth put a bright spotlight on the problem of worker misclassification. It’s a problem the Construction Citizen team has exposed for years and we greatly appreciate any time other media outlets take up the cause as well.

This most recent outrage came to light after three men working as independent subcontractors underneath Thanksgiving Tower in Dallas died in a horrific accident. But, the companies involved have denied damages to their families. How can that be?

(Read More)

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Cheating by Unethical Employers Reaches Crisis Levels While Texas Lawmakers Sit on Their Hands

Posted by National Alliance for Fair Contracting on

by Scott Braddock on Wed, 04/08/2015 – 5:46am

 

Over the years, the Construction Citizen team has put a bright spotlight on the myriad problems caused by worker misclassification. Those difficulties continue to mount while Texas lawmakers do very little about it, much to the frustration of ethical companies that cannot compete with cheaters, many single mothers who are denied child support payments, conservative activists upset about illegal immigration, and workers’ rights advocates who believe in a better standard of living for those who toil in the hot Texas sun.

Worker misclassification is one of the major underlying problems when it comes to fixing all those challenges.

If you’re unfamiliar, worker misclassification is a fancy term for cheating on payroll. That’s why labor activists call it “payroll fraud.” It happens when a boss pretends their worker is an “independent subcontractor” instead of an employee even when, by law, the person should be on the books as an employee. Many employers do this with the goal of avoiding payroll taxes, workers’ compensation coverage, and other benefits and protections in place when there is a true employer-employee relationship. Keep in mind that there are many legitimate uses of contract labor, but the IRS has legal definitions for who is an employee and who is a contractor.

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Texas Urged to Crack Down on Employers That Misclassify Workers

Posted by National Alliance for Fair Contracting on

By Julian Aguilar

March 15, 2015

 

Workers’ rights groups in Texas are revamping their efforts to increase protections for low-income laborers by urging lawmakers to crack down on employers that intentionally misclassify their employees.

Misclassifying workers as independent contractors – rather than employees – allows employers to avoid paying payroll taxes, overtime and workers’ compensation. The practice also allows employers to skirt federal law that requires new hires to provide proof that they can work in the country legally.

About 35,000 Texas workers were misclassified between 2010 and 2012, according to the Texas Workforce Commission. That includes 4,300 in the construction industry and 4,100 in the health care and social assistance industries. Those workers’ employers should have paid about $2.4 million to the state’s unemployment insurance fund, according to a report by the Legislative Budget Board.

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Owners of construction companies pay more than $108K in overtime back wages following US Labor Department investigation

Posted by National Alliance for Fair Contracting on

Some employees misclassified as independent contractors

Date:  January 29, 2015

U.S. Department of Labor

Wage and Hour Division

Release Number: 14-2338-DAL

NEDERLAND, Texas — Specialty Painting & Wall Covering Inc. and M & S Enterprise have paid 22 painters and sheetrock installers $108,783 in overtime back wages after an investigation by the U.S. Department of Labor’s Wage and Hour Division. The investigation revealed violations of the Fair Labor Standards Act’s overtime and record-keeping provisions and found that workers at M & S Enterprise were misclassified as independent contractors.

The division’s Houston District Office investigated both construction companies that are jointly owned and operated and employ workers who perform painting, sheetrock installation and finishing projects. Workers of Specialty Painting & Wall Covering were paid for up to 40 hours per week with a check from that company. When workers at Specialty worked more than 40 hours in a week, they were paid for the overtime hours with a separate check from M & S Enterprise at their straight-time rate with no taxes withheld. Workers of M & S Enterprise were misclassified as independent contractors and were paid straight time for all hours worked, including overtime hours.

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Texas House Panel finds that worker misclassification “compromises free markets” and promotes “lawlessness”

Posted by National Alliance for Fair Contracting on

By Scott Braddock
January 23, 2015

 

A report from a bipartisan panel of Texas lawmakers says companies that pretend their employees are independent subcontractors are undermining free markets and encouraging illegal immigration, among other serious problems. The practice of worker misclassification happens when an employer intentionally skirts the law by paying workers as independent subcontractors when they meet the legal definition of employees and should be paid as such.

Preventing workers from being paid as employees denies them basic protections and costs taxpayers millions each year because employers are avoiding payroll taxes on that labor. Employers who follow the law are investing in a sustainable workforce, which is undermined by worker misclassification. Many of those ethical employers have urged lawmakers to do more to contain what they’ve called “a cancer” in the heart of the construction industry.

So, the Texas House Business and Industry Committee this past year took an in-depth look at the issue, including testimony from construction industry leaders, labor advocates and others who are united in combating misclassification.

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El Paso City Council: Contractor’s payment on hold due to violations

Posted by National Alliance for Fair Contracting on

By Aileen B. Flores / El Paso Times
POSTED:   12/09/2014 10:29:06 PM MST

El Paso City Council on Tuesday took action against companies that allegedly underpaid employees in the construction of Sun Metro’s bus operations and maintenance facility on the East Side.

Council voted unanimously to withhold $35,400 in payment to the contractor, Urban Associates, until an investigation is complete into one of the subcontractors, Beltran Electrical Contractors, Inc. The investigation regards possible violations of prevailing wage rates.

The contractor has 15 days to resolve the issue. If the problem is not resolved between the subcontractor and the workers, then the dispute must be submitted to arbitration, city documents show. Council also approved to report the case to the U.S. Department of Labor.

Urban Associates was awarded a $27.4 million contract in 2012. The company then subcontracted Beltran.

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