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IL: Attorney General Raoul Convenes First Meeting Of Worker Protection Task Force

1/23/20

Chicago, IL (WorkersCompensation.com) – Attorney General Kwame Raoul today convened the first meeting of a task force that will facilitate collaboration between the Attorney General’s office, county prosecutors and state agencies in order to better protect workers’ rights and law-abiding businesses in Illinois.

The Worker Protection Unit Task Force was created under Senate Bill (SB) 161, which was initiated by Attorney General Raoul and signed into law by Gov. JB Pritzker. The new law became effective on Jan. 1, 2020. The task force will bring together the state’s leading regulatory agencies that impact workers, law enforcement and worker protection advocates in order to better combat wage payment violations and unfair labor practices. …

… The new law established a Worker Protection Unit Task Force to facilitate information sharing and collaboration between the Attorney General’s office, local prosecutors, the Illinois Department of Labor, the Illinois Department of Human Rights, the Illinois Department of Employment Security and the Workers’ Compensation Commission. …

In addition to establishing the Worker Protection Unit Task Force, Senate Bill 161 codified the Worker Protection Unit within the Attorney General’s office to enforce violations of worker protection laws. The law also gives the Attorney General clear legal authority to investigate and bring enforcement actions against employers that commit wage theft and other workplace rights violations.

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Wage theft: An underreported crime

Catholic News Service |Mark Pattison
February 21, 2020

A rising tide lifts all boats, according to the popular economic adage.

But what if the reverse also is true? What happens when wages are depressed, and illegally so?

The Catholic Labor Network, based in Washington, is testing that theory right now through its Mid-Atlantic Construction Wage Theft Project. It has sent a man to construction sites in Maryland and the District of Columbia to talk to workers to learn who hired them and how much they’re getting paid.

Ernesto Galeas, who has gone to the job sites, said a growing number of builders are going through labor brokers to obtain workers. The brokers get their fee – and, according to Galeas, the workers get about $10 an hour with no overtime, no Social Security, no worker’s compensation and no health insurance. …

In a February phone interview with Catholic News Service, Galeas said: “In every job that I visit, most of them have labor brokers in drywall, carpentry, siding, plumbing, electricians. I would say that of 10 jobs, eight of them are under labor brokers.”
While labor brokers were more common in new-home construction, it has spread to commercial development, he added. …

The attorney general’s office in the District of Columbia levied fines this winter totaling roughly $3.25 million against three firms found to have violated the city’s wage-theft law. Some of that money will go to workers as back pay. Two of the three companies specialize in drywall hanging and electrical work.

D.C.’s Workplace Fraud Act, which applies to the construction industry, requires companies to classify most workers as employees. Those who violate the law can face significant fines. Maryland has a similar bill, hence the Catholic Labor Network’s focus there with its wage-theft initiative. …

California passed the Private Attorneys General Act, which allows workers to stand in the shoes of their state’s labor department and seek civil penalties for wage theft; they also generate millions in new revenue for state enforcement agencies, expanding their capacity to root out wage theft. Such legislation also has been proposed in New York, Oregon, Maine, Massachusetts, Vermont and Washington. …

A 2017 study by the Economic Policy Institute found wage theft “causes many families to fall below the poverty line, and it increases workers’ reliance on public assistance, costing taxpayers money. Lost wages can hurt state and local economies, and it hurts other workers in affected industries by putting downward pressure on wages.”

In examining the 10 most populous states, which hold a bit more than half the U.S. population, wage theft comes to more than $8 billion a year. “If the findings for these states are representative for the rest of the country, they suggest that the total wages stolen from workers due to minimum wage violations exceeds $15 billion each year,” the report said.

Just how much is that? David Cooper, a senior analyst at the Economic Policy Institute and co-author of the report, told CNS that “when you look at the amount of wage theft that takes place, it’s significantly more than the value of property theft.” The report quotes FBI statistics from 2015 that show the combined value of money and property stolen in robberies, burglaries, larceny and motor vehicle theft in the United States was $12.7 billion.

“The magnitude,” Cooper said, “is a lot larger than people think.”

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Power Design to Pay $2.75 Million to Resolve Wage Theft Lawsuit (DC)

D.C. Office of the Attorney General alleges national electrical contracting company misclassified more than 500 workers as independent contractors. This settlement is OAG’s largest recovery to date in a wage enforcement action.

January 23, 2020

Attorney General Karl A. Racine recently announced that Power Design, Inc., a national electrical contractor headquartered in St. Petersburg, Fla., will be required to pay $2.75 million to workers and the District as part of a settlement in a wage theft and worker misclassification case. The settlement with the Office of the Attorney General (OAG) resolves a 2018 lawsuit against Power Design and two subcontractors that staffed its worksites for allegedly misclassifying more than 500 electrical workers as independent contractors instead of employees to cut labor costs. OAG also alleged that Power Design cheated workers out of wages and benefits and failed to pay District unemployment insurance taxes.

Under the terms of the settlement, Power Design will be required to: …

  • Pay $50,000 to support apprenticeships, job training, or workforce development opportunities to District residents.
  • Implement new policies and procedures to ensure compliance with the District’s minimum wage, overtime, paid sick leave, and worker misclassification laws.

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Press Release: AG Racine Announces Two District Employers Must Pay Nearly $500K In Unpaid Wages To Workers And Penalties (DC)

News Release – DC Office of the Attorney General
Jan. 2, 2020

WASHINGTON, D.C. – Attorney General Karl A. Racine today announced that the Office of the Attorney General (OAG) resolved two wage theft enforcement actions against two District employers that require them to pay nearly $500,000 in relief to harmed workers and penalties to the District. In a settlement with the Office of the Attorney General (OAG), Rock Spring Contracting, LLC, a construction company, is required to pay over $280,000 for allegedly misclassifying workers as independent contractors and depriving them of legally-mandated paid sick leave and overtime pay. …

Under the District’s Workplace Fraud Act, which applies to the construction industry, companies are required to classify most workers as employees and those who fail to do so can face significant penalties. …

OAG’s Increased Efforts to Fight Wage Theft

In 2017, OAG worked with the Council of the District of Columbia to grant the agency independent authority to investigate and bring wage theft cases, and to increase penalties on employers who violate the District’s wage and hour laws. Since then, OAG has launched more than 30 investigations into wage theft and payroll fraud and has taken action against a home health care provider, a national electrical contracting firm, KFC franchises, a cell phone store, a cafe chain, and other businesses that harmed District workers. AG Racine also recently testified before Congress and highlighted findings from an OAG report about how worker misclassification-a type of payroll fraud-hurts workers, undercuts law-abiding businesses, and cheats taxpayers. Read our latest factsheet on OAG’s work to protect District workers.

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UC Davis housing contractor gets 10 years in prison for fraud (CA)

Nov. 17, 2019

DAVIS, Calif. – A 56-year-old Colorado man who fraudulently became a UC Davis housing contractor has been sentenced to 10 years in prison for insurance fraud, wage theft, perjury and grand theft, officials said. …

Thompson then secretly ran the business using the fraudulent license, officials said.

His business was able to obtain a contract with UC Davis to build student housing. During construction, he stole more than $633,000 of his employees’ wages, defrauded the California State Compensation Insurance Fund and committed perjury to conceal his fraud. In all, he caused a total loss of more than $2 million, according to the district attorney’s office.

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Column: Wage theft scourge is a massive bank robbery every day (MA)

By Frank Callahan/Guest Columnist
Posted Feb 23, 2020 at 6:18 PM

The Great Brink’s Robbery, which has been upheld as the most notorious theft in the history of Boston, happened 70 years ago last month.

The brazen daytime heist, in which 11 robbers broke in and stole $2.8 million (about $30 million in 2020 money) from the Brink’s security company in the North End on Jan. 17, 1950, was at the time the largest robbery in U.S. history and dubbed “the crime of the century.” The crime prompted changes to the way companies approached security for both employees and assets. Police, politicians and the public were all focused on making sure lessons were learned and improvements were implemented.

Unfortunately, decision makers today haven’t been acting with the same degree of urgency to an equally onerous theft in our backyard. Wage theft – the practice of stealing money earned by workers – is a $700 million annual problem in Massachusetts. That’s almost $2 million a day being stolen out of the pockets of hardworking men and women, all Massachusetts taxpayers.

It is hurting the workers, who struggle from paycheck to paycheck. It hurts communities, which see its core small businesses suffer because residents have less spending power. And it hurts the entire commonwealth, whose economy suffers, leaving less revenue for crucial services like public safety, education and transportation.

Wage theft may not be as shocking as the Brink’s job, in which gang members picked locks, bound and gagged workers and dispersed into the night. Rather, today’s crooks are more likely to be wearing suits and looking their victims right in the eye while reaching around and picking the wallet from their back pocket. They’re unscrupulous contractors and subcontractors who promise to pay carpenters, pipefitters, sheet metal workers, custodians and countless other laborers agreed-upon wages and then short-change them after the work has already been done.

Frequently, there is little recourse. Maura Healey, the Massachusetts attorney general, has committed to cracking down on wage theft in the commonwealth. It’s not fair to ask Healey and her staff to take on this fight with one hand tied behind their backs.
Thankfully, there is a potential fix. There are two wage theft bills pending before the Legislature on Beacon Hill that would take this scourge head on.

Massachusetts’ Building Trades unions are urging lawmakers to pass legislation to provide Healey with greater enforcement authority. That includes enabling her office to penalize lead contractors for wage theft violations committed by their subcontractors. It would also empower the Attorney General’s office to shut down work sites until the violations are corrected.

And this legislation would pay for itself. More enforcement will lead to more recovery. In Fiscal Year 2019, the AG’s office recovered $5.8 million in restitution for these hardworking men and women – less than 1 percent of what was stolen. It stands to reason that more enforcement will return more money.

There are some champions in the Legislature who have recognized the importance of combating wage theft. Sen. Sal DiDomenico of Everett and Rep. Dan Donohue of Worcester have sponsored bills to battle wage theft and lent their support to ensuring the hardworking people of Massachusetts get paid the money they earn. Both of these bills have more than half of the Legislature signed on as co-sponsors.

Seven decades after the Brink’s robbery, people still recall not only the crime but the response to it to make sure it doesn’t happen again. That’s what we should be doing on the wage theft front, as well.

Frank Callahan is the president of the Massachusetts. Building Trades Council.

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New poll of Maine workers shows strong support for more workforce protections (ME)

Dan Neuman
December 23, 2019

A new survey of workers in Maine shows that there is significant desire for the state to take a major role in adopting policies that improve job quality and advance economic justice.

The survey, which polled private sector workers in Maine, was released last week by the Maine Center for Economic Policy (MECEP) as a part of the organization’s annual “State of Working Maine,” a comprehensive analysis of the economic and workforce trends in the state.

Workers were asked about several workforce policies introduced earlier this year that will likely see a vote sometime next year after state lawmakers return to Augusta in January.

Policies that have seen inaction on the federal level, such as paid family and medical leave, expanded overtime protections, and prohibitions against wage theft and unfair scheduling practices, have strong support among Maine workers. MECEP’s report concludes that this popular support presents an opportunity in the state legislature – where Democrats hold majorities in the Maine House and Senate, as well as control the governor’s office – to make gains after years of conservative control. …

Eighty-six percent want increased penalties for employers who steal wages
MECEP’s survey also shows a substantial amount of support for combating wage theft and mandating predictable work schedules. Eighty-six percent of the respondents want to require employers to pay wages in a timely manner and increase penalties and enforcement for employers who commit wage theft. ….

Senate President Troy Jackson (D-Allagash) has a bill being vetted by lawmakers that would make it easier for the state Attorney General’s office to swiftly clamp down on businesses that may be engaging in wage theft. Another bill that would have mandated that businesses guarantee a fair workweek to their employees was killed in committee after the sponsor, state Rep. Gina Melaragno (D-Auburn), said she needed more time for consultation. That reworked bill has not been submitted for the upcoming legislative session.

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Amherst councilors propose bylaws to enforce wage, labor laws (NH)

By SCOTT MERZBACH
Published: 2/25/2020

AMHERST – The Town Council is considering a package of bylaws that would give Amherst officials some oversight in making sure workers are getting minimum wage and that other labor laws are being followed, such as workers being paid appropriately for overtime work and receiving tips.

Collectively known as wage theft bylaws, the proposal is being brought forward by District 1 Councilor Cathy Schoen, District 2 Councilor Pat DeAngelis and At Large Councilor Mandi Jo Hanneke, and would bring Amherst in line with Northampton, Easthampton, Springfield, Cambridge, and other communities that have adopted similar bylaws and ordinances.

The first, known as the responsible employer bylaw, would mandate that the town award contracts only to companies following the laws, Hanneke said. It would require any contractor to certify, in writing, that they are in compliance with wage, hour and benefits laws, and have not had violations for the past five years.

The second, the tax incentive or tax relief bylaw, would mean such agreements, under the purview of the Town Council, can be granted only to businesses that follow the bylaw. The bylaw would also have provisions for rescinding or reducing tax incentives.

The third, the wage and tip bylaw, applies to the service industry and offers the potential for fines or possible license loss if workers are not paid appropriately. The bylaw would also create a Wage Theft Advisory Committee that includes members of the Licensing Commission, Human Rights Commission, Amherst Area Chamber of Commerce and Pioneer Valley Workers Center. In addition, the bylaw would require the posting of rights in all establishments and information on how to report a violation or file a complaint.

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New Jersey DOL cites, fines Katerra sub for wage violations (NJ)

AUTHOR: Kim Slowey
PUBLISHED: Feb. 18, 2020

Dive Brief:

  • The New Jersey Department of Labor & Workforce Development (NJDOL) has issued a stop-work order to subcontractor REB Construction and Maintenance LLC for failure to take the proper deductions from its employees’ pay and for not keeping the required payroll records related to work performed on a project in Jersey City, New Jersey. The department also fined REB $19,250. …
  • The authority that the NJDOL has to stop work on a construction project when significant pay, benefits or other workers’ rights violations are documented is part of new legislation based on the July 2019 recommendations of New Jersey Gov. Phil Murphy’s task force on employee missclassification.

Dive Insight:

Stop-work orders (A5838): The NJDOL can force an employer to stop work if it determines that the employer violated state wage, benefit or tax laws.

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Column: Wage theft is prevalent, cheats workers in Ohio (OH)

January 31, 2020

Too many bosses in the Columbus area and throughout Ohio are finding ways to cheat their hard-working employees. It’s called wage theft. These unethical employers steal money from workers and make it harder for law-abiding employers to compete.

Here are some of their methods: paying less than the minimum wage; not paying overtime; violating prevailing wage laws on public construction projects; confiscating tips from restaurant wait staff; misclassifying regular employees as self-employed independent contractors; forcing employees to work off-the-clock before and after their regular shifts; and denying workers legal meal breaks. The list of unscrupulous practices is almost endless. …

Mayor Andrew J. Ginther and the Columbus City Council have recognized the problem here. They are considering legislation aimed at curbing wage theft by any developer who receives a tax abatement or other tax incentive. If enacted, this legislation would be a good first step in combating abuses. Four years ago, Cincinnati enacted a similar ordinance. Franklin County suburbs should follow suit.

Central Ohio’s overall economy is healthy and growing. However, not everyone is benefiting. Too many folks are being left behind, forced to work two or three jobs to make ends meet. Dishonest wage-theft violators know this. They prey on the most vulnerable of our fellow citizens.

These crooked employers should be held accountable. Our elected officials and business leaders should tell repeat offenders either comply with the law or get out of central Ohio. We don’t need you and your abusive practices.

Mark Fluharty is executive director of the Central Ohio Labor Council of the AFL-CIO.

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