AG: Leominster construction firm ordered to pay nearly $840,000 for violating labor laws (MA)

Posted by National Alliance for Fair Contracting on

By Peter Jasinski
UPDATED: 10/31/2018 02:40:51 PM EDT

BOSTON — A Leominster construction company has been ordered to pay $837,341 in restitution and penalties for making illegal deductions from worker paychecks following the second investigation in less than three years of allegations the company was violating labor laws.

Massachusetts Attorney General Maura Healey announced Wednesday that Force Corporation and its managers, Juliano Fernandes, Anderson Dos Santos, and Claudio Cicero Da Silva have been issued two civil citations for failing to make timely payment of wages and failure to furnish payroll records to the AG’s office.

“Force Corporation and its managers cheated their construction workers out of hundreds of thousands of dollars,” said Healey in a written statement. “To build this case, our team documented the use of dozens of illegal tricks used by employers to steal from workers.”

This most recent investigation began after state officials received several complaints from the New England Regional Council of Carpenters.

The AG’s investigation revealed that Force Corporation has been regularly taking illegal deductions from employees weekly wages to pay for tools, safety equipment, and advances in what Healey referred to as a “textbook example of wage theft.”

The investigation also showed that Force unlawfully required employees to purchase their own tools through a company owned by Fernandes, one of Force’s managers.

…

The company was found in willful violation of federal labor laws and ordered to pay nearly $2.4 million back wages and damages to 478 employees in 2016 and $262,000 in fines for violating the federal Fair Labor Standards Act.
According to an investigation by the Wage and Hour Division of the U.S. Department of Labor, Force Corporation created a separate company, AB Construction Group of Framingham, as a way to provide Force with employers but classify them as independent contractors. This misclassification led to the company failing to pay employees overtime and keep accurate time and payroll records.

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Sacramento latest city to mandate local hiring (CA)

Posted by National Alliance for Fair Contracting on

By Kim Slowey
Aug. 23, 2018

Dive Brief:

  • The Sacramento City Council voted Tuesday to amend its city code and adopt the contentious, according to the Sacramento Bee, Local Hire and Community Workforce Training Program, which requires contractors to use a 50% local workforce on most city-funded projects of $1 million or more.
  • The program also requires that 20% of apprentices on covered projects be “priority apprentices,” who live in economically disadvantaged areas or are veterans, prior offenders, recipients of public assistance, foster youths, homeless or women. The new ordinance also requires that 50% of the budgets for two major city projects, including the renovation of the Sacramento Convention Center, be spent with local businesses in certain counties and that 15% of those businesses be small, regional enterprises.
  • In the sample agreement included on the city council’s agenda is “Contractor(s) performing construction work on the project described in the agreement shall, in filling craft job requirements, utilize and be bound by the registration facilities and referral systems established or authorized by the local unions,” a provision which some nonunion contractors argue will hinder their participation in city work. Proponents of the agreement, however, said that nonunion contractors perform around 60% of city work and that nonunion workers can simply register with the unions so that they can be included in the local hire program.

Dive Insight:

Unlike some other local hire mandates, Sacramento’s gives contractors an out of sorts by allowing them to hire from any source if unions cannot provide them with the necessary workers within 48 hours of a request. On the other end of the spectrum was the Detroit workforce requirement for contractors performing services during construction of the Little Caesars arena. The city fined construction companies that didn’t meet the 51% local hire requirements a total of $5.2 million. The Sacramento ordinance does not include such punitive measures for failing to meet the goals.

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San Jose High-Rise Contractor Pays $250,000 Over Alleged Wage Theft, Labor Trafficking (CA)

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by Dominoe Ibarra
July 23rd, 2018

The builder of a downtown San Jose apartment tower shelled out $250,000 to workers to settle labor violations alleged by federal investigators. Full Power Properties LLC-the builder that succeeded KT Urban on the the 650-unit Silvery Towers project-owed the money to 22 workers, the U.S. Department of Labor (DOL) announced last week.

Investigators found that Full Power Properties profited off underpaid workers employed by Job Torres, a subcontractor doing business as Nobilis Construction. During off hours, those workers lived in captivity, in a squalid warehouse run by Torres.

Acting on a tip that Hayward-based Nobilis Construction used undocumented workers as slaves, agents from the U.S. Department of Homeland Security served search warrants at multiple sites in August of 2017, took Torres into federal custody and referred the case to the DOL’s Wage and Hour Division.

Investigators say they found that Torres kept workers in a cramped second-story loft hidden behind a wall, with wood bunks and no running water. Torres allegedly locked the door from the outside, which led investigators to conclude that the workers were being held against their will.

According to the feds, Torres smuggled workers in from Mexico and would threaten them into submission by mentioning to anyone who complained that he knew people from drug cartels. The construction boss allegedly collected contact information for each worker’s family “in case of emergency,” so he knew where their loved ones lived.

There were signs of trouble long before federal investigators began looking into claims of forced labor in February of 2017. Silvery Towers developer KT Urban, which enjoyed tax breaks from the city to incentivize the project, came under fire in 2016 for hiring non-union workers, prompting a series of protests by local labor unions.

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DRYWALL CONTRACTOR FINED $2 MILLION; IS CALIFORNIA WAGE THEFT RAMPANT? (CA)

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By Jane Mundy
August 10, 2018

THE CALIFORNIA LABOR COMMISSIONER’S OFFICE FINED A DRYWALL COMPANY $2 MILLION FOR WAGE THEFT-SPECIFICALLY FAILING TO PROPERLY COMPENSATE WORKERS FOR REST PERIODS, OVERTIME AND SOME WORKERS FOR NOT PAYING MINIMUM WAGE.

Los Angeles – After workers at Fullerton Pacific Interiors Inc., complained about California labor law violations to the non-profit Carpenters Contractors Cooperation Committee, the California Labor Commissioner’s Office stepped in. Investigators found that the drywall company paid a daily rate that didn’t include overtime hours or rest breaks and 28 workers were not even paid minimum wage. Fullerton was fined nearly $2 million for wage theft violations.

The work included taping and drywall installation at hotels, recreation centers and casino projects in Los Angeles, Orange and San Bernardino counties between August 2014 and June 2016. According to the citation, Fullerton failed to properly compensate 472 workers for rest periods and 289 workers were not paid for overtime, along with other wage violations. California state Labor Commissioner Julie Su said in a statement that, “In construction, unscrupulous contractors attempt to obscure their wage theft by paying workers a flat rate rather than for all hours worked. But a daily or other flat rate system does not take the place of minimum wage and overtime obligations.”

THE $2 MILLION FINE

This is how the wage theft fine was calculated. $1,892,279 payable to the workers was broken down as follows:

* $798,664 for rest period violations. Most workers in California are entitled to a paid 10-minute break for every four hours worked, or paid for an extra hour at their regular rate. Fullerton’s workers were allowed a 30-minute lunch “hour” but did not receive rest breaks.

* $386,685 for unpaid overtime.

* $692,500 for wage statement violations.

* $14,431 for the unpaid wages, liquidated damages and waiting time penalties. Workers paid less than minimum wage are entitled to liquidated damages that equal the unpaid wage plus interest. There are also penalties for waiting times that are calculated based on taking the employees wages and multiplying it by the days they waited for compensation, at a maximum of 30 days.

* $72,400 civil penalty: The company would also be on the hook for civil penalties of $50 per work day for the initial violation, which increases to $100 for subsequent pay periods.

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Remove Power Design From D.C. Apprenticeship Program (DC)

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By: Editorial Board
09/14/2018

The D.C. attorney general’s office recently filed a lawsuit against Power Design, a Florida-based electrical contractor. The lawsuit alleges that Power Design, known for its work on D.C. buildings, is at the nexus of one of the largest wage-theft scandals in the city’s history.

Construction companies are required to employ a certain number of apprentices in order to bid on major contracts within the District. Construction companies need approval by the Apprenticeship Council to hire apprentices and comply with this requirement to bid on contracts in the District. This editorial board calls on the D.C. Apprenticeship Council to renounce apprenticeship eligibility status from Power Design due to the company’s egregious violations of workers’ rights.

The D.C. attorney general’s lawsuit alleges that Power Design misclassified electrical workers as independent contractors instead of employees, allowing Power Design to avoid payroll taxes and keeping the workers from receiving benefits such as sick leave. In addition, the lawsuit claims that some workers weren’t paid the appropriate overtime rate and others weren’t even paid the D.C. minimum wage. Over 500 Power Design workers were mischaracterized as independent contractors, 180 were not paid the required overtime rate, and 63 were not paid minimum wage, which demonstrates a codified company culture of mistreatment and abuse.

This isn’t the first time Power Design has been accused of shortchanging its workers. When the company first applied for the D.C. apprenticeship program last year, Attorney General Karl Racine and D.C. Councilmember Elissa Silverman urged the Apprenticeship Council to deny Power Design’s bid. Racine and Silverman referenced lawsuits filed against Power Design claiming that the company did not pay for overtime work and purposefully misclassified workers.

…

Power Design is just one of many companies that have profited from the massive development and construction wave that the city has undergone in the last few years. By consistently failing to pay their workers their proper wages and benefits, the company has ensured that regular city residents don’t benefit from this development. Rather than allowing Power Design to continue their abuse of the city’s workers, the Apprenticeship Council should follow the lead of their colleagues in the attorney general’s office and demand real changes from Power Design. Doing so would ensure that all of the city’s residents get to benefit from its growth.

While Racine’s thorough investigation into Power Design is vitally important, other branches of the District government must form a united front in combating wage theft in the city. A so-called progressive city government should not be aligning itself with a company that mistreats its workers so egregiously. The government can begin by taking a stand against companies that have abused the rights of D.C. workers.

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Nearly $10 million in fines, penalties issued against Massachusetts employers accused of wage theft in 2018 (MA)

Posted by National Alliance for Fair Contracting on

Updated Sep 4; Posted Sep 4
By Kristin LaFratta

In Massachusetts, state officials found $9.6 million in restitution and penalties against businesses and employers who stole wages and exploited workers.

Attorney General Maura Healey released a 2018 Labor Day report this week that explores the findings of wage theft and other means of exploiting workers. Investigations were performed by the AG’s Fair Labor Division, or those who enforce wage laws and the fair bidding of construction projects.

The report revealed wage theft and labor violations occurred across industries, and many by contractors based outside of Massachusetts. In fiscal year 2018, Fair Labor conducted 247 “field visits” across Massachusetts to investigate unfair pay practices, which found both civil and criminal violations in various businesses.

Healey said her office chose to prioritize wage theft in the construction industry last fiscal year, which resulted in nearly $1.5 million in penalties and restitution, according to the report. In that time Fair Labor issued citations or other assessments against 61 different employers in the construction industry.

Methuen’s E.J. Paving Company, Florida-based contractor Southern Road and Bridge, LLC and J. Donlon & Sons Inc., which worked on a public works project in Medford, were among the “notable cases” listed in the report, all of which failed to pay workers properly in overtime pay or minimum wage.

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Winchester construction company failed to pay workers minimum wage (MA)

Posted by National Alliance for Fair Contracting on

Posted Aug 1, 2018 at 5:46 PM

A Winchester construction company J. Donlon and Sons Inc. has paid more than $121,000 in wages and penalties for violating the Massachusetts prevailing and minimum wage laws by failing to properly pay workers on a Medford public works project, Massachusetts Attorney General Maura Healey announced today. The company is located at 86 Cross St. in Winchester.

“This company and its owners gained an unfair advantage by cheating their workers out of the wages they earned,” said Attorney General Healey in a press release announcing the settlement. “With this settlement, we are sending a message that there are serious consequences to breaking our laws.”

J. Donlon and Sons Inc.’s owner Joseph M. Donlon Sr., and his two sons Joseph M. Donlon Jr. and Sean Donlon, were cited for intentionally failing to pay prevailing wage, failing to submit true and accurate certified payroll records, failing to pay the state minimum wage and failing to maintain true and accurate general payroll records from January 2012 through December 2016, according to the release. As part of the settlement, the company and all three corporate officers are prohibited from bidding or working on any public works construction project in Massachusetts for 10 years.

The attorney general’s Fair Labor Division began investigating J. Donlon and Sons after a former employee submitted a complaint alleging he was not paid the proper prevailing wage rate for work performed on a city of Medford utility trench patching public works project. According to the release, the attorney general’s office determined that employees on the project were paid far less than the established prevailing wage rate. During one three-year period, for example, employees were paid an hourly rate of between $8 and $20 when they should have been paid between $51.35 and $54.10 per hour.

The company also submitted certified payroll records to the city of Medford during certain years that listed only members of the Donlon family as having worked on the project and omitted other employees, the attorney general’s office stated. The investigation found that general payroll records were also inaccurate, and two employees were paid less than the applicable minimum wage.

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AG orders Methuen paving company pay restitution for wage theft (MA)

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By Zoe Mathews (zmathews@eagletribune.com)
Jul 20 2018

BOSTON – A Methuen paving contractor and its president have been cited $172,554 in restitution and penalties for violating the Massachusetts overtime law for work performed on various public works projects across the state, Attorney General Maura Healey announced Friday.

“State prevailing wage laws ensure that companies working on public works projects do not cut corners to gain an unfair competitive edge,” said Healey in a press release on Friday. “This company cheated its workers out of overtime pay and with this action by my office, will now pay them what they are owed.”

The AG’s Fair Labor Division began an investigation into EJ Paving and its president, Thomas Evangelista, after receiving a complaint from an employee alleging he was not paid overtime for all hours worked in excess of 40.

The investigation revealed the company paid overtime to its employees after they had worked in excess of 45 hours during a week, though the law requires employees be paid time and a half after working more than 40 hours a week.

The investigation also revealed that when employees worked on both private and public works projects during the same week, EJ Paving failed to account for the different hourly rates of pay when overtime was calculated.

The AG’s office issued one citation for failure to pay overtime, which EJ Paving has paid in full, according to the release.

(See Article)

Proposed Detroit ordinance could mandate 51% local hires for all city construction work (MI)

Posted by National Alliance for Fair Contracting on

By Kim Slowey
Sept. 20, 2018

Dive Brief:

  • At a Sept. 17 press conference, Detroit City Council President Pro Tem Mary Sheffield proposed a measure that would require all city-funded demolition and construction work to be performed by at least 51% city residents, the Detroit Free Press reported. The ordinance will be presented to the city council during the next few months as part of a package of “People’s Bills” aimed at helping Detroiters.
  • Sheffield told the Free Press that the push behind the construction-related measure was the revelation that local residents were not well represented in the city’s Land Bank demolition program, which funds the razing of blighted homes in Detroit. Of the $70 million spent on the initiative so far, more than 50% of the contracts have gone to suburban Detroit companies, 26% to minority firms and only 16% to African American-owned companies.
  • Detroit Mayor Mike Duggan instituted a similar program in 2014, but Sheffield’s proposal differs in that it would lower the current threshold of $3 million – at which hiring requirements kick in – to a lower, undetermined amount; include demolition projects; and impose expensive fines on companies that do not comply. The fines would go into a workforce training fund, though Sheffield maintains there are plenty of qualified Detroiters that simply have not been given work opportunities. Sheffield said her ordinance would pursue more rigorous enforcement and collection of fines, but Duggan’s office said they have been conscientious about going after violators.

Dive Insight:

Sheffield’s plan is similar to those instituted in other areas of the country, but at 51%, it’s higher than what is outlined in most other regulations, and many agencies forego fines and rely on contractors making their best efforts to comply.

The City of Sacramento is one of the latest municipalities to enact a local hiring law, the Local Hire and Community Workforce Training Program. The regulation, passed last month, requires that contractors use local workers when performing city-funded work valued at $1 million or more. The ordinance also requires that 20% of apprentices either live in an economically disadvantaged area or be a member of a special class – homeless, a woman, former offender, foster youth or recipient of public assistance.

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Wage theft “epidemic” in construction. Taxpayers paying the tab. (NV)

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AUTHOR – Dana Gentry
PUBLISHED – July 27, 2018

A new ad from Attorney General Adam Laxalt’s gubernatorial campaign alleges his opponent, Steve Sisolak, awarded a public works job to Las Vegas Paving, a union company, for $100 million, over a non-union contractor who bid $4.6 million less.

But construction industry experts contend lower bids generate projects that are too often built on the backs of Nevada workers who are enduring a wave of wage theft on public works jobs. And your tax dollars are fueling it.

“From what I’ve seen, if you point out a project, someone is cheating on it,” says Evangelina Diaz of the Painters’ Union. “It’s crazy out there. It’s a dirty business.”

“It’s the only way the contractor can submit a lower bid. A gallon of paint is going to be the same. Brushes, rollers – materials are going to cost the same. It’s the wages where they can cheat,” Diaz says.

“There is a company, Vision Drywall, that paid over a million dollars years ago in back wages and they are still in business. Then we caught them again and they paid several hundred thousand dollars. That’s just the cost of doing business for them,” Diaz says.

Federal court records indicate Vision Dry Wall entered into a confidential settlement in 2014 with workers who claimed they were intentionally and systematically denied overtime. The Nevada Labor Commission reports eight complaints filed against the company, the last in 2015.

Nevada law requires prevailing wages be paid on public works jobs of $250,000 or more, while all federal jobs of $2,000 or more require prevailing wage.

Las Vegan Guy Bennallack owns a number of construction companies in a variety of trades including painting and roofing, and has contracted on numerous public works jobs.

Bennallack was convicted of 13 counts of tax evasion in 1994. Court records from his failed appeal reveal how far Bennallack was wiling to go to save money by defrauding the government.

“Here, appellant created false documentation to hide his illegal conduct; provided false W-2 forms to his employees for them to prepare false returns; used Southern Distributors as a secret supplier of cash by directing them to issue rebate checks to appellant; evaded detection by instructing Southern Distributors to issue the checks in amounts less than $10,000; maintained two sets of books in order to conceal sales; withheld information from his tax-advisors in order to falsify his returns; withheld invoices from the IRS.”

Today, Bennallack says he has 500 jobs going on at one time. He says cheating employees, who he says are well-versed in the law, would be impossible.

“I’m telling you there’s no way to do that. The penalties are far worse than anything you would ever gain,” he says. Asked what the penalty would be, Bennallack admits workers would be paid the amount they would have legally been due, but likely no more.

A spokeswoman for the state says the Bennallack-owned Painting Company has had two wage and hour complaints and two prevailing wage cases prior to 2012.

The Original Roofing Company, owned by Bennallack, had one wage and hour complaint in 2016.

Nevada’s Labor Commissioner is tasked with ensuring workers are paid fairly, and has an online list of contractors who are prohibited from bidding on prevailing wage projects because of prior violations.

The law allows the Labor Commissioner to assess a $5,000 administrative penalty against wage violators and the discretion to increase it in certain cases.

Contractors who are assessed an administrative penalty by the state may be prohibited from being awarded a public works contract for three years for a first offense and five years for subsequent offenses.

The Attorney General, who is notified of all violations, has the ability to prosecute. Adam Laxalt’s office did not respond to the Current’s request for information on wage theft prosecutions.

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