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Public works contractor arrested, accused of wage theft (NY)

Posted by National Alliance for Fair Contracting on

Stephon Johnson | 8/23/2018

Authorities arrested a public contractor for allegedly skimming from his employees’ paychecks.

This week, New York State Attorney General Barbara Underwood and Port Authority Inspector General Michael Nestor announced the arrest of Marjan Kasapinov, 63, for allegedly taking more than $40,000 in wages and benefits from 28 workers employed to work on a publicly funded construction project at LaGuardia Airport. Kasapinov faces between one and four years in prison, a five-year ban from public work and payment of back wages to his employees.

Kasapinov, doing business as Paterson, N.J.-based EMLO Corp., was contracted to perform asbestos removal work on several buildings at LaGuardia Airport between March 2014 and March 2015. Kasapinov and EMLO Corp are charged with failure to pay the prevailing rate of wage or supplements, offering a false instrument for filing in the first degree and failure to secure workers’ compensation insurance-all felonies.

“Contractors that corrupt public projects and fail to pay their workers will be held accountable,” stated Underwood. “Workers deserve fair pay of the wages and benefits they’ve earned-not to be exploited by their employer. Our office will continue to work relentlessly to combat wage theft and the abuse of public dollars.”

“Companies doing business with municipalities, state agencies and authorities are legally bound to pay their employees the fair and prevailing wage,” added Michael Nestor, inspector general for the Port Authority of NY & NJ, in statement. “In this case, the defendant chose to enrich himself at the expense of his own workers. Today’s arrest will serve notice to all contractors that the Port Authority of NY & NJ will not tolerate wage fraud or any other criminal misconduct on public projects.”

(Read More)

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Manhattan Construction Company Misclassified and Underpaid Workers, Including Site Fatality Victim (NY)

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By WorkersCompensation.com on July 27, 2018

New York, NY (WorkersCompensation.com) – Manhattan District Attorney Cyrus R. Vance, Jr., and New York City Department of Investigation (“DOI”) Commissioner Mark G. Peters announced the indictment of CRV PRECAST CONSTRUCTION, LLC (“CRV”) and six of its employees for misclassifying workers as lesser-skilled, underpaying them, and falsifying information about payroll and employees, including a worker who was killed at a company job site. The defendants are charged in a New York State Supreme Court indictment with Insurance Fraud in the Second and Third Degrees, Grand Larceny in the Third Degree, and Scheme to Defraud in the First Degree, among other charges.[1]

“Time and again, we’ve seen how wage theft is symptomatic of an overall disregard for workers’ wellbeing: On worksites where companies regularly defraud their employees, we have also seen them playing fast and loose with their workers’ lives and safety,” said District Attorney Vance. “As alleged in this case, the defendants devalued their workers’ livelihoods, underpaying them and insuring them for lower-risk work while simultaneously sending them to carry out complicated construction projects. Misclassifying workers as lesser-skilled is a common way that employers steal from their employees, and I thank our Construction Fraud Task Force partners for their continued commitment to protecting the workers who put their lives on the line every day.”

DOI Commissioner Mark G. Peters said: “These defendants stole from their workers on City construction projects, failing to pay the legally required prevailing wage and underpaying more than $400,000 in insurance premiums, according to the charges. In trying to skirt these laws for their own benefit, the defendants’ alleged conduct has instead landed them in handcuffs and facing prosecution. DOI thanks the Manhattan District Attorney’s Office for its partnership in this case and our many joint Construction Fraud Task Force investigations.”

The indictment follows a joint investigation led by the Manhattan District Attorney’s Office’s Construction Fraud Task Force and DOI, with additional assistance by the New York State Insurance Fund (“NYSIF”).

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U.S. Department of Labor Recovers $14.3 Million for Hurricane Recovery Workers (Puerto Rico)

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By Source Staff – September 25, 2018

In the year since hurricanes Irma and Maria struck Puerto Rico and the U.S. Virgin Islands, the U.S. Department of Labor’s Wage and Hour Division (WHD) has recovered $14,337,657 in unpaid wages for 7,761 employees engaged in recovery work in these territories. WHD has also undertaken significant outreach activities to educate employers and employees about compliance with federal wage laws as part of its ongoing hurricane response efforts.

Following the hurricanes, WHD began a broad-based education and enforcement initiative providing information to employers and workers via social media, and by conducting outreach. Investigations focused on compliance during short-term emergency response operations funded through the Federal Emergency Management Agency (FEMA) to ensure employers were aware of their responsibilities and employees were paid.

The investigations examined coverage under an employer’s compliance with the Service Contract Act (SCA), Contract Work Hours and Safety Standards Act (CWHSSA), Davis Bacon and Related Acts (DBRA), and the Fair Labor Standards Act (FLSA).

WHD investigators found violations that included non-payment of wages, minimum wage and overtime violations resulting from employees being misclassified as independent contractors, and failure to pay required health and welfare benefits under the SCA.

WHD has conducted more than 60 outreach events; signed memorandums of understanding (MOUs) with Puerto Rico’s Department of Labor and its Office of the Comptroller to better coordinate enforcement and outreach efforts; and hosted a prevailing wage seminar to educate contractors, government agencies, and other stakeholders about compliance with applicable laws.

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Seattle worker-rights groups uniting to create ‘one-stop shop’ for workplace wrongs (WA)

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By: Benjamin Romano
August 3, 2018

Working Washington and the Fair Work Center, two organizations that have been as effective as any in recent years at expanding and defending the rights of workers in Seattle and beyond, are joining forces under a new executive director.

Rachel Lauter, most recently the deputy chief of staff to New York Mayor Bill de Blasio, assumed the role of leading both organizations in late May, a first step in a merger designed to create what she describes as “a one-stop shop for worker organizing, advocacy, outreach and education and legal services.”

That’s necessary, she said, because aggrieved workers or those looking to improve working conditions may not always know what kind of help they need or where to begin.

Working Washington got its start in 2011 organizing low-wage workers to push for the nation’s first $15-an-hour minimum wage, passed by SeaTac voters in 2013, and then by the Seattle City Council in 2014. The labor-backed group has run successful campaigns – often marked by attention-grabbing stunts and protests, online and off – for predictable shift scheduling, expanded sick leave, equal treatment and, most recently, expanded protections for domestic workers.

The Fair Work Center (FWC), meanwhile, formed in 2016 with a mission of educating workers about their rights in Seattle and beyond, offering legal aid and connections to groups advocating for specific communities such as immigrants and youth. It has been awarded more than $2.5 million from the city of Seattle’s Office of Labor Standards under a grant program designed to “develop awareness and understanding of worker rights, and facilitate resolution of labor standards violations.” According to its 2017 annual report, the legal clinic helped low-wage workers recover more than $350,000 resulting from wage theft, discrimination and harassment, retaliation and other violations.

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Grand Theft Paycheck: The Large Corporations Shortchanging Their Workers’ Wages

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New research finds that a wide range of big corporations have been shortchanging the people who work for them

by Philip Mattera with a chapter on policy recommendations by Adam Shah
June 2018

Washington, DC-A new report finds that many large corporations operating in the United States have boosted their profits by forcing employees to work off the clock, cheating them out of required overtime pay and engaging in similar practices that together are known as wage theft.

The detailed analysis of federal and state court records shows that these corporations have paid out billions of dollars to resolve wage theft lawsuits brought by workers. Walmart, which has long been associated with such practices, has paid the most, but the list of the most-penalized employers also includes Bank of America, Wells Fargo and other large banks and insurance companies as well as major technology and healthcare corporations. Many of the large corporations are repeat offenders, and 450 firms have each paid out $1 million or more in settlements and/or judgments.

These are among the findings in Grand Theft Paycheck: The Large Corporations Shortchanging Their Workers’ Wages published today by the Corporate Research Project of Good Jobs First and Jobs With Justice Education Fund. It is available at www.goodjobsfirst.org/wagetheft

“Our findings make it clear that wage theft goes far beyond sweatshops, fast-food outlets and retailers. It is built into the business model of a substantial portion of Corporate America,” said Good Jobs First Research Director Philip Mattera, the lead author of the report.

(Read More – Press Release)

(PDF Copy of Full Report)

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US prosecutors target construction firms that “institutionalise theft” from their own workers

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A recent spate of criminal prosecutions in New York and California against builders who don’t pay their workers the agreed wage suggests a hardening mood against corporate graft in the country.

27 June 2018 | By GCR Staff

In one case, a luxury home-builder in Manhattan has been charged with stealing more than $1.7m from 500 workers through payroll tricks.

Previously, failure to pay the correct wage was treated as a civil matter, putting the onus on the worker to bring a suit against their employer. But now state prosecutors seem more willing to treat the issue as a violation of criminal law.

Diana Florence, an assistant district attorney (DA) in Manhattan, said the aim was to stop companies in industries that rely on lots of low paid workers from “institutionalising theft as a business model”.

The new approach was illustrated most recently last week when authorities in New York announced that a Brooklyn construction company had pleaded guilty to second-degree grand larceny for underpaying 21 employees.

The Urban Group then made full restitution of $303,411 to the workers, all of whom were immigrants.

Contractors on public sector projects often commit to paying wages as a certain rate, and this case revolved around Urban’s falsely certifying that it had paid employees on a public schools contract at the prevailing wage rates of $63 an hour when in reality it had paid between $10 and $17, and had offered no overtime or benefits.

The discrepancy was revealed when the company was forced to post the legal wage on signs around its worksites.

As well as making restitution, Urban was debarred from public work in New York state as a contractor or subcontractor for five years.

(Read More)

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Brooklyn contractor pays more than $300K to settle worker wage theft claims (NY)

Posted by National Alliance for Fair Contracting on

Kim Slowey
June 21, 2018

Dive Brief:

Brooklyn District Attorney Eric Gonzalez, together with New York City Department of Investigation Commissioner Mark Peters, announced Monday that a Brooklyn construction company pleaded guilty to second-degree grand larceny for underpaying and committing wage theft against 21 employees. Brooklyn-based contractor The Urban Group made full restitution of $303,411. According to the New York Daily News, Gonzalez said the affected workers were immigrants.

Between 2014 and 2015, according to Gonzalez’ office, Urban employed six non-union workers to perform construction-related work – including demolition, masonry, carpentry and painting – at five schools in Brooklyn and the Bronx. Urban reportedly falsely certified that it paid those workers at prevailing wage rates ($62 to $63 per hour), but only paid between $10 and $17 per hour and no overtime or benefits. Urban ended up owing those workers more than $230,000 in restitution. Urban also reportedly underpaid non-union day laborers hired to perform construction work at other school sites by more than $71,000.

The pay discrepancies reportedly were revealed when the company was forced to post the legal wage on signs around its worksites. The Urban Group on June 13 was sentenced to a conditional discharge and is debarred from performing public work in New York state as a contractor or subcontractor for five years.

Dive Insight:

In December, New York city officials, led by Manhattan District Attorney Cyrus Vance, launched a crackdown on wage theft in the city by announcing the prosecution of area construction companies that had allegedly stolen more than $2.5 million in wages from approximately 400 of their workers by writing them bad checks, not paying them prevailing wage rates or overtime and, in some cases, withholding payment altogether. The DA’s office accused the companies involved of making total underpayments ranging from $13,000 to $700,000.

(Read More)

Automating Wage Theft: A Crime Against Families and Community Made Easy

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CAROLE LEVINE | June 1, 2018

We probably should not be surprised that an industry has been built to support “rounding down” the wages of low paid workers, but there’s evidently a large market for it. Perhaps United Way’s new ALICE initiative should pay attention to this kind of corporate behavior.

It’s all pretty simple. You clock into your job, and the system is set to round the time up or down (sometimes in your favor, sometimes not) if you are a few minutes early or you stay late. The system is set to deduct time for your breaks and your lunch, even if you are not able to take that time because of a crisis or a demanding work project. You don’t get paid for that time worked. And now we know that companies are deducting these hours purposefully.

University of Oregon Associate Professor of Law Elizabeth C. Tippett documented this first and co-authored a 2017 study on timekeeping software and a follow-up article on wage theft. Now, she writes in The Conversation about how employers are using software for the purpose of “wage theft” and are cheating workers out of millions of dollars of wages they have worked and should have been paid for.

“Wage theft” is a shorthand term that refers to situations in which someone isn’t paid for the work. In its simplest form, it might consist of a manager instructing employees to work off the clock. Or a company refusing to pay for overtime hours.

A report from the Economic Policy Institute estimated that employees lose $15 billion to wage theft every year, more than all of the property crime in the United States put together.

That report, however, focused on workers being paid less than the federal or state minimum wage. Our 2017 study, which was based on promotional materials, employer policies and YouTube videos, suggested that companies can now use software to avoid paying all sorts of hourly workers.

Tippett focuses on two main areas of digital wage theft by employers: rounding and automatic break deduction. She did a search to see if there were legal cases brought to reclaim lost wages to these two causes, expecting to find only a few. To her surprise, she found hundreds and hundreds of legal opinions. To quote her from the article, “The study’s methodology does not support quantitative inferences about how often digital wage theft occurs or how much money US workers have lost to these practices over time. But what I can say is that this is not a theoretical problem. Real workers have lost real money to these practices.”

(Read More)

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Plymouth man sentenced for wage theft, ordered to pay $100,000 back to workers (MA)

Posted by National Alliance for Fair Contracting on

By Alana Levene GLOBE CORRESPONDENT
JUNE 07, 2018

A Plymouth man accused of swindling dozens of his construction employees out of their wagespleaded guilty Tuesday in Suffolk Superior Court and ordered to pay them nearly $100,000 in restitution, prosecutors said.

Joseph B. Kerrissey, III, 41, was also sentenced to three years of probation, and barred for bidding on public works projects for five years, state Attorney General Maura Healey announced Wednesday.

Kerrissey and his two companies, J. Kerrissey LLC and Sunrise Equipment & Excavation Inc., pleaded guilty to more than one hundred charges including willful wage and hour violations, larceny, and failure to pay the state’s prevailing wage from 2011 to 2017, prosecutors said.

Kerrissey will have to pay $91,743 to 37 former employees of the two companies,which did public construction projects in Hanover, Weston and West Tisbury, the statement said.

“For years, this employer refused to pay his workers and took intentional steps to make it impossible for them to obtain their wages,” Healey said in the statement. The transgressions included bouncing payroll checks, not issuing checks, shaving hours from paychecks, and paying employees less than their agreed-upon rate, prosecutors said.

Prosecutors launched an investigation after several employees complained about not getting paid by Kerrissey, who was indicted in 2016.

He made up an array of excuses to avoid paying, including “telling employees the money should be in the account, saying they did not earn the wages or had to work for nothing, and threatening to take out criminal complaints if they attempted to use the legal system to obtain their wages,” according to the statement.

(See Article)

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Contractor Hired by San Diego Firm to Pay $1.1M for Wage Theft (CA)

Posted by National Alliance for Fair Contracting on

POSTED BY ALEXANDER NGUYEN
ON JULY 9, 2018 IN BUSINESS

State labor regulators secured more than $1.1 million in wages and penalties from the settlement of a case involving a Long Beach construction project, it was announced Monday

Labor officials alleged that Newport Beach-based Champion Construction Inc., a drywall and framing contractor hired by San Diego general contractor TB Penick for the Browning High School construction project, maintained false payroll records over a six-month period to cover up wage theft affecting 103 workers who were not paid wage and fringe benefits.

California’s wage laws hold general contractor TB Penick jointly liable for the violations of its subcontractor Champion, state Labor Commissioner Julie Su said.

“Prevailing wages create a level playing field for all contractors bidding on public construction projects,” Su said. “This case clearly demonstrates that general contractors who select contractors that don’t play by the rules will pay a heavy price. Under the law, they are responsible for the wage theft of their subcontractors.”

The Labor Commissioner’s Office opened its investigation after receiving a report from the Carpenters Contractors Cooperation Committee in March 2016 alleging public works violations. The investigation included interviews with more than 30 workers, site visits and an audit of pay records for the dozens of workers involved in the project, Su said.

(Read More)