City Council bans Cleveland from doing business with companies that practice wage theft

Posted by National Alliance for Fair Contracting on

Published: Dec. 05, 2022 | Cleveland.com

By Courtney Astolfi

CLEVELAND, Ohio – Cleveland City Council approved on Monday an ordinance banning the city of Cleveland from doing business with companies found to practice wage theft and those that commit payroll fraud.

The new law bars Cleveland from granting financial assistance to such companies or entering into contracts with them for city services or construction.

The measure is a victory for advocacy group Guardians for Fair Work, which has been lobbying city officials this year to deliver wage-theft protections for Cleveland workers.

“This is an important step forward for working people in Cleveland. We believe the only way we succeed as a city and region is to put workers at the center of our economic development strategies. Without this worker centered approach we will not have shared prosperity,” organizer Nora Kelley said in a news release. She added that workers with the lowest wages are often the ones victimized by wage theft.

Businesses seeking city contracts or financial assistance will have to report to the city’s Fair Employment Wage Board any instances of a government agency finding that they or a subcontractor committed wage theft or payroll fraud within the last three years. Businesses that self-report those instances would not be eligible to receive city money or contracts.

Gov. Carney signs wage theft and other labor protection bills into law

Posted by National Alliance for Fair Contracting on

Delaware Public Media | By Paul Kiefer
Published October 10, 2022

Gov. John Carney signed a bill into law on Friday defining wage theft as a crime and setting financial penalties for violators.

The new wage theft law is one of the most detailed in the country, targeting an array of strategies used by employers to avoid paying taxes or underpay workers. Its sponsor, State Sen. Jack Walsh (D-Christiana/Newark), says wage theft, including misclassifying workers as part-time or contractors, is widespread and often leaves workers without access to key benefits.

“Having them work off-the-clock, paying them under the table – which presents problems down the road because they can’t access worker’s compensation or unemployment,” he said. “Basically, they’re misclassifying people, 1099-ing them, when they’re actual employees and should be treated as such.”

Delaware’s Department of Labor is responsible for investigating wage theft allegations and can refer cases to the Department of Justice for prosecution.

The law also sets financial penalties, including fines between $20,000 and $50,000 for retaliating against employees who report wage theft.

Carney also signed a bill into law on Friday that holds employers liable for damages if they do not provide a paycheck within one pay period after an employee is laid off or discharged, or after the employee resigns or quits.

(View Source)

Rep. Galloway Introduces Bill To Fight Wage Theft

Posted by National Alliance for Fair Contracting on

Levittownnow.com – by Staff – Sept. 17, 2022

A new bill in the wake of recommendations from the Joint Task Force on Misclassification of Employees has been introduced by local State Rep. John Galloway.

Galloway, a Democrat from Falls Township introduced H.B. 2810 in Harrisburg this week with fellow Democratic state representatives Joanna McClinton, of Philadelphia and Delaware counties, and Pat Harkins, of Erie County.

Galloway’s office said the bill proposes the following measures:

  • Cover all workers to protect them from wage theft.
  • Take away the licenses of businesses who steal wages and cheat the system.
  • Give the Department of Labor and Industry more resources to chase down the cheaters.
  • Make cheaters face heavy fines – the companies who made an honest mistake will get a chance to make things right, but the ones who knowingly steal from workers will get hit the hardest.
  • Align with the effort to end corporate price gouging and give the attorney general more power to investigate and charge companies taking advantage of the system.

The Joint Task Force on Misclassification of Employees, which was established under a bill drafted by Galloway and passed in 2020, issued recommendations in a report in 2022 that served as the foundation for the legislation.

“Misclassification of employees occurs when a business wrongfully classifies a worker as an independent contractor even though the nature, type and oversight of their work determines they should be considered an employee under the law. Misclassification can impact industries from home health care to construction to online businesses, like Uber and Lyft drivers,” Galloway’s office explained.

“For years, I’ve been fighting to end corporate price gouging on workers in the commonwealth,” Galloway said. “Too many companies are cooking the books and using dirty tricks to take money out of the hands of workers and put it into stock buybacks, shareholder dividends, and corporate executive perks instead of putting the money back into the communities. When HB 2810 is passed, Pennsylvania’s workers will have the wages and the workplace protections they rightfully deserve, and our working families and communities will be safer and stronger for it.”

(Read More)

dispatcher-12

City council passes ordinances to protect workers’ rights

Posted by National Alliance for Fair Contracting on

by Malea Martin / Mountain View Voice
Uploaded: Wed, Sep 14, 2022

Employees in Mountain View will soon have increased labor protections thanks to a pair of ordinances passed by the city council Tuesday night – though some members of the public raised concerns that the ordinances don’t go far enough to protect workers on the city’s own projects.

The Wage Theft and Responsible Construction ordinances first came to the council in October 2021 as a study session item. Nearly a year later, the council had its first reading of the ordinances at its Aug. 30 meeting before passing the ordinances with a few adjustments at its Sept. 13 meeting.

The purpose of the ordinances is “to help ensure accountability and compliance with existing state wage and hour laws, enhance the protection of workers’ rights, and support the city’s existing minimum wage ordinance,” said Christina Gilmore, assistant to the city manager, at the Aug. 30 meeting.

In the case of the Wage Theft Ordinance, staff proposed that the business license process be used to connect with Mountain View employers and seek compliance with state wage and hour laws, according to the council report from the Aug. 30 meeting.

“As part of this process, all businesses would be required to submit an affidavit attesting that the business does not have any unsatisfied labor law judgments or orders,” the report said, and the city would investigate potentially false attestations on a complaint basis.

Similarly, for the Responsible Construction Ordinance, staff in 2021 proposed using the city’s building permit process to achieve wage protections for workers employed in construction projects. Owners, contractors and subcontractors on projects at and above 15,000 square feet would be required to submit a Pay Transparency Acknowledgement form at the beginning of the permit application process, and then a second Pay Attestation form before reaching the end of the project.

After the 2021 study session, staff made a few adjustments before bringing the ordinances back to council for the first reading on Aug. 30. For instance, businesses with no employees would be exempt from the wage theft ordinance requirements. Staff also incorporated stronger consequences for non-compliance with the Responsible Construction ordinance, such as the certificate of occupancy being withheld for failure to submit the form or in the case of a sustained complaint of wage theft.

(Read More)

unnamed

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.

( Read More)

Attorney General’s annual Labor Day Report: More than $11.8 million in restitution and penalties against employers on behalf of workers in Mass.

Posted by National Alliance for Fair Contracting on

MassLive.com – Published: Sep. 05, 2022
By Tristan Smith

Attorney General Maura Healey released her seventh annual Labor Day Report, a summary of the office’s efforts to combat wage theft and other forms of worker exploitation in Massachusetts. The report showed that during fiscal 2022 the office assessed more than $11.8 million in restitution and penalties against employers on behalf of commonwealth workers.

“This Labor Day, we honor the resiliency of Massachusetts workers whose perseverance throughout the COVID-19 pandemic has kept our communities and our economy going,” said AG Healey. “One of my top priorities is ensuring that workers from every industry are paid the wages they are entitled to and that they have access to the hard-fought workplace rights that our laws provide. We will continue to advocate for the rights of workers at the state and national level.”

The Labor Day Report details the actions of the AG’s Fair Labor Division in fiscal 2022, which runs from July 1, 2021 to June 30, 2022. During this fiscal year, the Fair Labor Division ordered employers to pay $7.5 million in restitution to employees and $4.2 million in penalties to the General Fund, according to the report.

More than 19,300 workers reportedly benefited from the AG’s enforcement actions.

In fiscal 2022, the Fair Labor Division continued its focus on combatting wage theft in the construction industry – where workers are often vulnerable to exploitation on the job, according to the report. In the construction industry alone, the division assessed more than $2.9 million in penalties and restitution and issued 217 citations against employers. In one case, the AG’s office cited a Wareham company and its owners for more than $1.2 million, including restitution for 41 employees, for prevailing wage violations and failing to submit certified payroll records, according to the report.

(Read More)

US Department of Labor Spotlights Employer Readiness, New Resources, Rights of Workers During Disaster Preparedness Month

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: September 6, 2022
Release Number: 22-1745-BOS

Wage and Hour Division hosts preparedness webinar Sept. 8, 2022

BOSTON – With menacing weather and severe storms a danger in late summer and fall, the U.S. Department of Labor urges workers and employers who clear debris, repair homes or perform other types of disaster recovery to use its Wage and Hour Division’s online resources, including a new Natural Disaster Compliance Assistance Toolkit, to ensure they are familiar with federal laws governing wages, hours of work and pay practices.

Even when disaster strikes, worker protections apply. Employers must ensure they can maintain accurate records and pay wages as due. Workers are particularly vulnerable during times of crisis and the failure to comply with federal labor laws harms them and their families.

“The U.S. Department of Labor works tirelessly to ensure that workers who respond in times of crisis, to help communities recover from devastating storms, are paid all of their legally earned wages and benefits,” explained Wage and Hour Regional Administrator Mark Watson in Philadelphia. “Additionally, we stand ready to equip employers with the information and guidance they need to prevent violations, which are often costly.”

From October 2017 to June 2022, the department’s Wage and Hour Division conducted more than 900 investigations related to recovery from natural disasters. Those cases yielded more than $62 million in wages recovered for more than 45,000 workers. During that same time, the division hosted more than 1,200 outreach events for disaster recovery employers, employees and stakeholders, totaling more than 75,000 participants.

(Read More)

unnamed

Attorney General Raoul Sues Construction Company over Complex Scheme to Avoid Paying Fair Wages and Taxes

Posted by National Alliance for Fair Contracting on

Office of the Attorney General – State of Illinois
Sept. 2, 2022

Raoul Also Issues 2022 Labor Day Report Highlighting Actions to Protect Illinois Workers

Chicago — Heading into the Labor Day holiday, Attorney General Kwame Raoul yesterday filed a lawsuit against a Bridgeview, Illinois-based construction company over an elaborate scheme to keep its employees off payroll and avoid paying tax withholdings required by law. The Attorney General’s office filed the lawsuit against Drive Construction Inc., its principal officers, and a complex web of entities and individuals for a years-long conspiracy to pay millions of dollars of wages in cash, and skirt laws intended to protect Illinois workers and ensure fair wages.

Drive Construction (Drive), which specializes in carpentry, plumbing and masonry, obtains public works projects worth several millions of dollars each year. Raoul’s lawsuit alleges Drive misclassified workers to avoid paying employees fair rates of pay for the hours they worked and to skirt its obligations to pay unemployment insurance contributions to the Illinois Department of Employment Security. Raoul alleges Drive violated Illinois’ Minimum Wage Law, the Illinois Prevailing Wage Act and the Illinois Employee Classification Act.

“Misclassifying employees as independent contractors deprives workers of their right to be paid fairly and to be covered by workers compensation insurance in the event of workplace injuries,” Raoul said. “Employers that gain a competitive advantage by paying workers off the books and in violation of Illinois law create an uneven and unfair playing field for law-abiding businesses. I am committed to holding businesses – large and small – accountable for violating laws that safeguard workers and support law-abiding businesses in Illinois.”

Raoul’s lawsuit follows an investigation based on information provided by the Mid-America Carpenters Regional Council, which has a collective bargaining agreement with Drive.

“The Mid-America Carpenters Regional Council worked closely with Attorney General Raoul’s office to shed light on this prime example of wage theft perpetrated against exploited workers,” said Gary Perinar, Executive Secretary-Treasurer of the Mid-America Carpenters Regional Council. “The Carpenters Union aggressively pursues wage theft cases because they hurt working families, they hurt Illinois taxpayers, and they hurt our signatory contractors who play by the rules and are at a major disadvantage against unscrupulous contractors who lowball bids by cheating the system. Earlier this year we were proud to introduce wage theft legislation that was signed into law which now holds cheating contractors accountable. We will continue our fight for working families across Illinois.”

(Read More)

unnamed

Wage thieves will soon face criminal prosecution in Multnomah County

Posted by National Alliance for Fair Contracting on

Northwest Labor Press – By Colin Staub
Aug 17, 2022

Employers who intentionally withhold wages totaling more than $10,000 could be taken to criminal court under an agreement in development between state labor regulators and the Multnomah County District Attorney’s office.

Oregon’s Bureau of Labor & Industries (BOLI) signed a memorandum of understanding with District Attorney Mike Schmidt on March 7. It’s not binding and isn’t legally enforceable, but it indicates both parties intend to enhance enforcement of wage and hour laws.

No cases have been referred for prosecution yet. But BOLI Wage & Hour Administrator Laura van Enckevort said she hopes to have at least a few cases identified for referral to the DA’s office in September, and definitely before the end of the year.

Employers could face felony charges

Schmidt says he was interested in tackling wage theft even before voters elected him in May 2020. He draws a connection between wage theft and public safety.

“When workers aren’t paid and they can’t bring home a paycheck, then that hits food on the table, the electric bill, the school supplies, that hits everything, and that can destabilize entire communities,” Schmidt said. “When I think about public safety, the thing that I think makes us the most safe is when communities are healthy and thriving. If you look out across Multnomah County, the places with the greatest economic disparity are the places we see the most criminal challenges.”

Schmidt says he’s heard several first-hand accounts from victims of wage theft since entering office. In one case, a man came to Schmidt to advocate on behalf of a group of Portland laborers who weren’t being paid by a contractor.

“They got to the first round of checks, and they bounced,” Schmidt said. “The second round of checks, and they bounced. They got to the third round, and he promised a bag full of cash. And then he showed up with an empty bag. He kept stringing them along until they finally walked off the job.”

(Read More)

unnamed

Minneapolis Construction Workers Fight Chronic Wage Theft

Posted by National Alliance for Fair Contracting on

BY CALEB BRENNAN | AUGUST 15, 2022

The Midwest building industry is notorious for cheating paychecks.

… Bravo, the executive director of the West Side Community Organization, alongside a coalition of workers’ rights advocates, union organizers, and general laborers, was there to protest poor working conditions within the construction industry. Their caravan would soon make its way into the heart of downtown Minneapolis to protest other build sites where blocky, five-on-one condominiums were under construction.

Bravo accused the firm, alongside a slew of other Minnesota real estate companies, of ignoring chronic concerns over safety, sexual harassment—and, most urgently, rampant wage theft.

“That was five decades ago,” Bravo continued. “And we have families today still facing wage theft while the construction industry is booming with millionaires and multimillionaires—all at the expense of exploiting the families that are working for them.”

Bravo was not exaggerating. The construction industry in the U.S. runs on wage theft. One study found that in Illinois, Wisconsin, and Minnesota, almost 1 out of every 5 workers suffer from payroll fraud. Another study focused specifically on Minnesota construction found a rate of 23 percent.

“One study found that in Illinois, Wisconsin, and Minnesota, almost 1 out of every 5 workers suffer from payroll fraud.

Minimum and overtime wage violations, specious deductions from paychecks, and misclassifying workers are all common tactics that Rust Belt construction firms and their subcontractors use to cut back on labor costs. Despite the brief impact of the COVID-19 lockdown, residential construction revenue in the U.S. is continuing on an upward trend—the size of the North American construction sector is set to reach $2.4 trillion by 2030.

In June of this year alone, domestic construction spending totaled $1.76 trillion.

This thievery, according to the Midwest Economic Policy Institute, costs taxpayers in these states $362 million each year. Similar levels are found on a national level, where everywhere from San Diego to Washington, D.C., sees a persistent flow of complaints and dollars extracted from workers.

The industry’s labor force is chronically unorganized, undocumented, and obstructed from legal recourse. As such, subcontractors can exploit atomized workers while their hiring firms can claim they had no knowledge of the conduct, leaving their precarious workforce economically and legally stranded.

Without political power or judicial leverage, atomized construction workers often have no means for resisting this subtle form of robbery.

That’s how Daniel Sanchez felt when he realized he had had over $100,000 worth of wages stolen from him over the course of two years. An immigrant laborer from Minnesota who has worked for both large national property development firms like R.J Ryan Construction and smaller, local ventures like Doran Companies, Sanchez has spent the past ten years cleaning and maintaining construction sites.

(Read More)