Attorney General Schwalb Secures $1.5 Million from Construction Company for Wage Theft Scheme

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December 9, 2025

Brothers Mechanical Inc. Illegally Misclassified Hundreds of Construction Workers, Depriving Them of Overtime Wages, Paid Sick Leave, and Other Benefits

Attorney General Brian L. Schwalb today announced that Brothers Mechanical Inc., a construction company that has worked on large development projects in NoMa, Navy Yard, and other DC neighborhoods, will pay $1.5 million to resolve allegations that the company and its subcontractors misclassified hundreds of workers as independent contractors, depriving them of wages and benefits they were legally entitled to.

Under the terms of a settlement agreement resolving an investigation by the Office of the Attorney General (OAG), Brothers Mechanical will pay $500,000 to impacted workers and $1 million to the District in penalties. The company will also be required to change its subcontracting practices and submit to compliance monitoring for three years.

“DC workers are the backbone of our economy, and especially at a time when the cost of living in DC continues to rise, I will continue to prioritize ensuring that workers receive the wages and benefits they have earned,” said Attorney General Schwalb. “This settlement puts money back in the pockets of hundreds of construction workers and sends a clear message that businesses will face consequences when they break the law, cheat workers, and undercut law-abiding competitors.”

“When companies illegally label employees as independent contractors, or misclassify them to a lower standard, they avoid paying proper wages, benefits, workers’ compensation, and payroll taxes. This is all-too common in the construction industry, and creates an uneven playing field where law-abiding contractors, who invest in trained workers and follow all regulations, are undercut by those cutting corners,” said Chuck Sewell, Marketing Director for the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART) Local 100. “We thank Attorney General Schwalb and his team at the OAG’s office for working to ensure the industry is safe and fair for all contractors and workers in the District.”

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Report: Wage theft, sexual harassment rampant for Minneapolis’ non-union construction workers

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By Stephen Swanson
 / CBS Minnesota

A new report says the city of Minneapolis needs to act to end wage theft and sexual harassment in the non-union construction industry.

The report from North Star Policy Action claims many of Minneapolis’ construction workers face routine labor abuses, wage theft, unsafe working conditions, gender-based violence and labor trafficking.

Members of North Star Policy Action, Centro de Trabajadores Unidos en la Lucha (CTUL) and dozens of workers gathered Wednesday at Minneapolis City Hall to push for action amid the report’s findings.

María Contreras, a construction worker and CTUL member, spoke about her personal experience with wage theft.

“I have a memory of sitting in my bed, looking at my empty bank account and not understanding how it can be,” Contreras said in Spanish, read in English by CTUL co-director Merle Payne. “It was impossible to pay my bills even though I was working so much.

“According to a 2021 report from the Midwest Economic Policy Institute, one in every four construction workers have experienced some form of wage theft.

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Illinois joins lengthening list of states outlawing wage theft

Posted by National Alliance for Fair Contracting on

October 30, 2023

By an overwhelming legislative majority Illinois has joined the lengthening list of states to outlaw wage theft.

The measure, signed by Democratic Gov. J.B. Pritzker in September, shows again the importance of state-level lawmakers and governors to workers.

That can be both positive and negative. The nation is increasingly politically polarized. In “Blue States,” such as Illinois, New York, California, and, this year, Michigan and Minnesota, elected officials respond to workers’ support with worker protection legislation unlikely to make it through Capitol Hill.

But in often gerrymandered and/or racially polarized “Red States” – such as Texas and Florida and other Southern and lightly populated Great Plains states – right-wing radicals, funded by corporate special interests, enact and enforce worker suppression and voter suppression legislation, often at the same time.

Illinois’ wage theft bill, HB1122, was one of the top priorities of the state AFL-CIO. The Illinois House passed it 68 to 38 and the state Senate agreed 35 to 20. It takes effect next July 1.

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Healey, Campbell push legislation to fight wage theft

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State House News Service
September 20, 2023

Vulnerable workers, including immigrants who do not know their rights or are fearful of employer retaliation, could gain stronger protections against pervasive wage theft under legislation that is supported by Attorney General Andrea J. Campbell and Gov. Maura T. Healey but has failed to win over Democrats on Beacon Hill for years.

Campbell on Sept. 19 publicly voiced her support for proposals that would strengthen her office’s authority to crack down on wage theft and protect Massachusetts from lost economic growth, jobs, and taxes. The latest version of the bill is being billed as a compromise between labor and business.

Legislation sponsored by Rep. Daniel Donahue and Sen. Sal DiDomenico (H. 1868 / S. 1158) would allow Campbell to file a civil action seeking injunctive relief for damages, lost wages, and other benefits for workers. Campbell also would have the authority to investigate wage theft complaints and seek civil remedies for violations, as well as to issue stop-work orders against contractors or businesses who are violating wage theft provisions.

“Access to a decent paying job and benefits is absolutely essential to ensuring economic security for individuals and their families,” Campbell told the Joint Committee on Labor and Workforce Development during a hearing on Sept. 19. “We know passing a strong, and smart, and effective wage bill is crucial.”

Some $1 billion in wages are stolen each year in the commonwealth by employers and contractors, and workers recoup less than 2 percent of their stolen pay, according to data from the Wage Theft Coalition led by the Massachusetts AFL-CIO. When DiDomenico first filed his bill in 2015, stolen wages totaled roughly $300 million, he told the committee.

 

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Denver wage theft unit sees rise in cases, especially in migrant community

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Karen Morfitt
July 8, 2023

Having worked in the construction industry for several years, Edgar Jauregui has met a lot of people and heard a lot of stories.

“They are willing to walk from their country all the way over here. You can tell they are going to do whatever it takes to change their lives,” he said.

As a representative for the Southwest Mountain States Regional Council of Carpenters, which represents about 55,000 workers, he’s also become an advocate for the immigrant community.

Recently, their concerns have centered largely around wage theft.

“They don’t get paid overtime after 40 hours and some other ones, they just don’t get paid at all. And they keep working because they have a promise that they are going to be paid for the next week,” Jauregui said.

Wage theft is the illegal practice of underpaying or not paying workers or providing benefits laid out in a contract or required by law.

In Denver complaints can be made both to the City Auditor’s Office and the Denver City Attorney’s office, where Brian Snow is an investigator.

“It’s definitely on the increase,” he told CBS News Colorado. “Our migrant population is disproportionately impacted by this,” he said.

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New RI law will make wage theft a felony

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Sarah Guernelli
June 27, 2023

Rhode Island is cracking down on wage theft.

Gov. Dan McKee recently signed a new law that will change wage theft from a misdemeanor crime to a felony starting next year.

Rep. David Morales helped champion the change.

“No longer will an unethical employer who withholds wages from their workers be met with a slap of a wrist of just a misdemeanor,” Morales said.

Under the new law, employers that knowingly and willfully fail to pay an employee more than $1,500 in wages could face up to three years in prison and pay fines.

“If you commit wage theft you are going to be held accountable,” he said.

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R.I. lawmakers pass bills to increase penalties for wage theft and employment fraud

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The bills will make it a felony to “knowingly and willfully” commit wage theft of more than $1,500, instead of a misdemeanor. House Speaker K. Joseph Shekarchi called the bills “historic.”

By Amanda Milkovits Globe Staff, June 14, 2023

PROVIDENCE — The House overwhelmingly voted for legislation Wednesday that will increase the penalties for wage theft and employment fraud — a tool that supporters say will punish employers who take advantage of workers.

House Speaker K. Joseph Shekarchi called the bills “historic.”

The companion bills, sponsored by Democratic Representative Robert E. Craven Sr., of North Kingstown, and Senator Meghan Kallman, representing Pawtucket and Providence, give more power to the state Department of Labor and Training and the attorney general’s office the ability to bring felony charges to serious offenders.

The bills will make it a felony to “knowingly and willfully” commit wage theft of more than $1,500. (Currently, it’s a misdemeanor.)

The legislation also lays out how the Department of Labor and Training will audit companies and investigate complaints of employee misclassification, following the federal regulations in the Fair Labor Standards Act. A specialized investigatory team at the DLT will have the authority to determine whether the issues are good faith errors, or violations that require civil penalties or referral to the attorney general’s office for criminal charges.

Some company owners and chambers of commerce had voiced concerns about being prosecuted by the attorney general’s office for mistakes, said Representative Jason Knight, Democrat of Barrington and Warren. So, the legislation was amended to allow investigators to filter out the innocent mistakes from incidents where employers are willfully stealing from workers, he said.

The legislation will require the attorney general’s office and the DLT to produce annual reports about wage theft and misclassified employees in Rhode Island. It also calls for more public education for workers and an assessment about the industries and areas in Rhode Island where workers are more likely to be victims of wage theft and employment fraud.

The bills also hone in on the construction industry, with enhanced criminal penalties, including felony charges, for misclassification of employees. The worst offenders, as the Rhode Island underground economy and employee misclassification task force found, were often construction companies and subcontractors, according to the task force’s annual report.

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Maryland construction company owes the District money for trying to cheat its employees

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Author: Samantha Gilstrap
Updated: 8:07 PM EDT April 18, 2023

As part of the settlement, the company also agreed not to bid on or provide work under any D.C. government contracts for one year.

WASHINGTON — A construction company operating out of Washington, D.C. owes the District money after trying to cheat its employees out of sick leave and other employment benefits to which they were legally owed, according to the Attorney General’s Office.

Authorities say Maryland Applicators intentionally misclassified employees as independent contractors to avoid having to provide them with the proper sick leave and other employment benefits. Now, the company must pay $835,000 to the District.

As part of the settlement, the company also agreed not to bid on or provide work under any D.C. government contracts for one year, D.C. Attorney General Brian Schwalb said.

“Maryland Applicators denied District workers the sick leave and other employment benefits they had earned by misclassifying them as independent contractors rather than employees. This not only cheated the workers but gave Maryland Applicators an unfair advantage over their competitors who follow the law,” Schwalb said. “My office is committed to protecting District workers, ensuring they receive the wages and benefits they are legally owed, and leveling the playing field for all law-abiding District businesses.”

Maryland Applicators is a Maryland corporation that provides construction services on projects in Washington, D.C.

Authorities claim it employed dozens of misclassified workers and also secured the services of hundreds of additional misclassified workers through subcontracts with other companies.

The misclassification is as a form of wage theft that reduces costs for companies at the expense of employees, Schwalb said.

Authorities say misclassifying employees as independent contractors deprives them of rights that employees are entitled to, such as the minimum wage, overtime compensation, and paid sick leave.

Illegal misclassification also deprives the District of tax revenue, unemployment insurance premiums, and workers compensation contributions.

D.C. construction companies that misclassify workers unlawfully avoid at least 16.7% in labor costs compared to companies following the law, providing an unfair advantage over their competition.

As a result of the settlement, Maryland Applicators must:

  • Pay $835,000 divided as follows:
    • $489,000 will be paid to the District.
    • $346,000 will be paid to affected workers.
  • Change its practices to ensure that all workers hired for projects in the District are properly classified in compliance with District law and receive the wages and benefits they are legally owed.
  • Refrain from bidding on or providing work on contracts paid by the District government in the District for one year.

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Biden’s Nominee for Secretary of Labor Wants ‘Wage Theft’ Cops

Posted by National Alliance for Fair Contracting on

SEAN HIGGINS | 4.20.2023 8:00 AM

California’s experience combatting wage theft has been a headache for employers without much in the way of restitution for workers.

Julie Su wants to be the nation’s top cop on wage theft, and she means that quite literally.

Su, President Joe Biden’s nominee to be the Secretary of Labor, believes that allegations of not paying workers what they are due are so serious that the accused—business owners—should be put in handcuffs.

As the head of the California Labor Department under Gov. Gavin Newsom, Su created the state agency’s first-ever criminal investigations unit. Su vowed that the unit would go after those “who underpay, underbid and under-report in violation of the law.” And the wage theft police were born.

“When we first implemented the unit, newspaper headlines warned of armed Labor Commissioner deputies coming to get employers in California and arrest them for crimes. And, well, we are!” Su boasted in a 2015 lecture. “We have filed over a dozen felony wage-theft cases with district attorneys across the state and we have had employers arrested and thrown in jail for the wage theft they committed.”