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Senate unanimously OKs wage theft bill (MA)

Posted by National Alliance for Fair Contracting on

UPDATED: 06/22/2018 06:35:35 AM EDT

By Katie Lannan
State House News Service

BOSTON — The Massachusetts Senate voted unanimously Thursday to approve legislation offering new protections to combat what senators characterized as a $700 million problem.

The bill (S 2327) targets the practice of wage theft, through which workers are denied the compensation owed to them by employers.

Despite the Senate’s support for the bill, Minority Leader Bruce Tarr warned it contained a “poison pill” that would make it “legally indefensible” and could keep it from becoming law.

Types of wage theft include failure to pay overtime, minimum wage violations, illegal deductions and working off-the clock, said Sen. Jason Lewis, who co-chairs the Labor and Workforce Development Committee.

“The practice of wage theft comes in many different forms, but they all have the common denominator of hurting workers, their families, and our communities,” said Sen. Sal DiDomenico, the bill’s lead sponsor.

Lewis told of one man, the father of an infant, who worked more than 50 hours a week for a construction subcontractor and was not receiving a paycheck. When the man approached his employer about the lack of pay, he was fired.

According to DiDomenico’s office, 350,000 Massachusetts workers lose an estimated $700 million annually to wage theft.

(Read More)

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Prosecutors Treating ‘Wage Theft’ as a Crime in These States

Posted by National Alliance for Fair Contracting on

June 26, 2018
By Chris Opfer

When a business doesn’t pay workers minimum wages or overtime, it usually risks a government investigation or private lawsuit. In some states, companies and their officers may also be looking at criminal charges that could land them behind bars.

“We prosecute companies that have institutionalized theft as a business model,” Manhattan Assistant District Attorney Diana Florence said.

Prosecutors in New York and California are starting to view wage violations as an actual crime more often, as opposed to a matter for civil courts. Their approach could be a model for other states looking to beef up enforcement in an era when the federal wage-and-hour watchdog is shifting its emphasis to voluntary compliance.

Also changing the landscape are a recent U.S. Supreme Court decision that’s likely to increase private arbitration and an immigration crackdown that may make some workers less likely to come forward with complaints.

“Companies take criminal cases more seriously,” Rena Steinzor, a University of Maryland professor who wrote a book about corporate criminal prosecutions, told Bloomberg Law. “If you’re an executive and the cops come to your door, you don’t soon forget it.”

Prosecutors are focusing on particular industries-such as construction, restaurants, janitorial services, garment makers, and home care providers-where they say low wages, temporary job assignments, and businesses that pop up and shut down with little notice leave workers especially vulnerable to abuse. Prosecutors are also packaging “wage theft” investigations as part of a wider look that encompasses health and safety violations, payroll tax fraud, and human trafficking.

Defense lawyers say the threat of criminal prosecution for what has largely been handled in civil courts may give prosecutors too much leverage.

“They can come in with these outrageous demands knowing that there’s no basis in reality,” Allan Bahn, a partner at FordHarrison in New York, told Bloomberg Law. “At times, they can hold” criminal charges “over a contractor and say, ‘If you don’t settle, we’re going to refer you for prosecution.'”

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Stealing From Workers Is a Crime. Why Don’t More Prosecutors See It That Way?

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It’s time for prosecutors to shift their focus to protecting the millions of workers who are victimized by their bosses each year.

By Terri Gerstein
5/24/2018

Last week, Manhattan District Attorney Cyrus R. Vance Jr. announced the indictment of a construction company, its principals, and others for theft of over $1.7 million, as well as for insurance fraud. Here’s the interesting part: The alleged theft in this case involved stealing from workers by illegally reducing their paychecks. Among other things, Parkside Construction and its managers allegedly altered time records in order to shave workers’ hours and thereby pay less money in wages than what was owed. Historically, that kind of malfeasance would get you a lawsuit, not get you arrested.

But things are changing, although not fast enough. This case exemplifies the leadership role increasingly played by a handful of prosecutors in pursuing predatory employers. Far more state and local prosecutors should take on this work; it is the right thing to do on the merits, and is especially needed now, as the federal government is abdicating its role of protecting our country’s workers.

Voters will soon have the chance to weigh in on this issue. There are scores of district-attorney seats in play in November, as well as over 30 state-attorney general elections. Criminal-justice advocates have rightly set their sights on these races, hoping to unseat some of the district attorneys whose “tough on crime” policies tend to be limited to offenses like drug violations or traffic infractions. Yet these contests also present an opportunity to elect leaders who understand the importance of judiciously using criminal law to address serious employer abuses, like wage theft, sexual assault, and utterly avoidable workplace injuries and fatalities.

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These trends don’t affect only workers. They also harm law-abiding businesses, who struggle to compete with bottom feeders. And employers who cheat their workers often cheat the government, too, under-reporting workers for tax purposes, and defrauding workers’-compensation-insurance carriers, leaving everyone else to hold the bag.

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Some prosecutors have begun to understand this perspective. In recent years, prosecutors in places as varied as El Paso and Minneapolis have brought charges in wage-theft cases, while in Philadelphia and Boston, they have taken on grossly negligent employers whose actions led to fatalities. And even before the #MeToo movement, there were arrests of sexually assaulting bosses, like the owner of the nation’s very last Howard Johnson’s, and the co-owner of a Boulder ice-cream company.

These cases demonstrate a growing movement of law enforcement at the grassroots, and one that should be recognized and treated as a priority, especially given the potential deterrent impact. While research shows limited to no deterrence resulting from certain kinds of criminal sanctions, such as capital punishment, there is evidence that some kinds of behavior, like tax compliance, can be affected by increased criminal enforcement and sanctions. And while there are no studies to date, common sense and anecdotal evidence both strongly suggest that employer workplace violations could be deterred by the specter of criminal prosecution.

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Governor Murphy Signs Executive Order Establishing Task Force on Employee Misclassification (NJ)

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May 3, 2018

Trenton – Governor Phil Murphy today signed an executive order establishing the Task Force on Employee Misclassification. Employee misclassification can allow employers to escape their legal responsibilities to their workers, such as ensuring adequate workplace protections and providing employment-related benefits like unemployment insurance and workers’ compensation. Employers often misclassify their employees intentionally in order to reduce labor costs and avoid paying state and federal taxes.

“The exploitation of workers is not only unethical – it is illegal,” said Governor Phil Murphy. “In New Jersey, we promote fairness, fight against discrimination, and work to end unfair labor practices. I am proud to take this step forward to end a practice that creates an unfair advantage over companies that play by the rules and hurts our working families.”

“We must crack down on wage theft,” said Attorney General Gurbir Grewal. “More and more employers are misclassifying their workers as ‘independent contractors’ because they think it’s cheaper than doing things the right way. But this practice isn’t just illegal. It actually makes New Jersey’s communities poorer in the long run by denying workers the wages and benefits to which they are legally entitled, and that are essential to building a fair and prosperous economy. We are proud to join with other states in fighting this growing problem.”

“Protecting workers’ rights is an important function of government and that role cannot just be limited to private businesses, but to the State and who it hires,” said Senate President Steve Sweeney. “When someone is in effect working as employee, but deliberately misclassified as an independent contractor, that worker is losing benefits, wages and other compensation. That just isn’t acceptable. This Task Force should ensure that the State is compliant with best practices. I look forward to working with them on this important issue. Anyone working for the State of New Jersey should know that their job, compensation and responsibilities match their job classification. This is about fairness.”

(Read More)

May Day Parade Stands Up Against Wage Theft (DC)

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May 07, 2018
by Negin Owliaei

As buildings rise in Navy Yard, so too do rents. The rapidly gentrifying pocket of Washington, D.C. has been lining the pockets of developers for years, but the money doesn’t always make its way to the construction workers building the luxury apartments popping up around the neighborhood.

That’s especially true for the workers contracted out by Power Design, a Florida-based electrical company that’s been sued more than a dozen times for wage theft. Activists targeted the firm’s Navy Yard construction sites on May Day to educate workers on their rights and remind the companies working with Power Design that they’re responsible for wage theft that happens on their watch.

The local DC chapter of Jobs with Justice has been leading the charge to hold Power Design accountable for its poor labor practices and to push city officials to uphold the laws meant to keep the company in check. A report released by the group earlier this year highlighted the company’s “race to the bottom” mentality.

Power Design, the report says, has faced at least 13 lawsuits around the country for wage theft. The report also details the company’s practice of classifying workers as independent contractors rather than employees, cutting corners on crucial protections and taxes and allowing Power Design to underbid other companies that uphold labor standards.

DC Jobs with Justice Executive Director Elizabeth Falcon shared this information with parade-goers as she led the crowd to various construction sites that contract to Power Design around D.C.’s Navy Yard neighborhood. “We need these developers who are taking these bids to understand we see them,” Falcon said.

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Proposed labor watchdog would give city’s worker protection laws some teeth (IL)

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April 18, 2018
By Matt Kiefer

A series of recent labor reforms promised to give Chicago workers wage theft protection, boost minimum wages and guarantee paid sick time. But those promises come up empty when it comes to enforcement, workers and labor advocates say.

Enter the Office of Labor Standards, a proposed new City Hall regulatory agency that would have the power to enforce city labor ordinances, investigate claims, process complaints, issue fines and recommend other penalties. Thirty-five alderman have signed in support of an ordinance establishing the new office.

At a Wednesday morning press conference, 47th Ward Ald. Ameya Pawar announced a proposed ordinance that would consolidate the city’s labor regulation authorities under the Office of Labor Standards.

“This is the logical conclusion to passing three major progressive policies to protect workers,” Pawar said, referring to the wage theft, minimum wage and sick time ordinances that City Council has approved over the past five years. “Because it doesn’t matter if you pass it if people aren’t receiving those benefits.”

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“We need an office dedicated to taking reports from workers like me and looking into companies who systematically steal wages,” Guerrero, a member of the labor advocacy group Arise Chicago, recounted in Spanish through a translator at today’s press conference. “When workers like me know the city has our back, we will feel safer to come forward.”

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As proposed, the Officer of Labor Standards would be responsible for collecting complaints without identifying workers to their employers. Unless the worker and employer agree to settle the case, the office would be required to complete investigations within 60 days. A business found in violation would be liable for unpaid wages and fines, and would become ineligible to bid on city contracts for one year. Those with “willful” or repeat violations could have their business licenses revoked.
Aldermen said they modeled the proposed labor standards office after similar municipal agencies in Seattle, New York and San Francisco.

They added that they will work with the mayor’s office to allocate funding for the office, which would include a director (appointed by the mayor and confirmed by City Council) and an unspecified number of investigators and lawyers. Part of the office’s funding would come from fines levied on businesses found in violation of city ordinances, though proceeds would also support community-based outreach programs to inform workers and employers of protections under city law.

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Laborers on a ‘Billionaires’ Row’ Tower Cheated of Wages, D.A. Says (NY)

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By James C. McKinley Jr.
May 16, 2018

The laborers were doing concrete work on the luxury Steinway Tower at 111 West 57th Street, a needlelike skyscraper set to open next year full of condominiums for some of the world’s wealthiest people. But the company employing the $25-an-hour workers, the authorities said, was cheating them out of hundreds of thousands of dollars in wages by purposely shorting their hours and failing to pay them overtime.

The Manhattan district attorney, Cyrus R. Vance Jr., said on Wednesday that the company, Parkside Construction, and its affiliates stole more than $1.7 million in wages over three years from about 520 workers at the tower and seven other high-rise buildings. The company also hid nearly $42 million in wages from state insurance officials to avoid paying millions in workers’ compensation premiums.

Many of the cheated workers were undocumented immigrants from Mexico and Ecuador, Mr. Vance said. When the workers complained, they were falsely told the money would be in their next check or were encouraged to find work elsewhere.

At a news conference announcing the arrests, Mr. Vance said the victims were especially vulnerable to exploitation because they were not in unions and did not have immigration papers. “Often it’s the very people who are tasked with building this great city who are the most vulnerable to fraud from their managers and employers,” Mr. Vance said.

Parkside Construction and its co-owners – Francesco Pugliese, 39, and Salvatore Pugliese, 46 – were charged with grand larceny, insurance fraud and scheme to defraud. Also charged in the scheme were Parkside’s construction foreman, James Lyons, 54; its payroll manager, Yenny Duarte, 42; an outside accountant, Michael Dimaggio, 58; and the owner of a Michigan payroll company, Jerry Hamling, 57. The Pugliese family’s companies made more than $100 million off the masonry and concrete contracts for the eight buildings.

“This was a business model for these defendants,” Mr. Vance said.

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A.G. Schneiderman Leads 11 Attorneys General Opposing Trump Dept. of Labor Program to Offer Amnesty to Labor Law Violators

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PAID Program Encourages Violators to Require Employees to Waive State Law Protections – Like Higher Minimum Wage Levels – in Exchange for the Payment of Overdue Wages

Schneiderman Also Files Freedom of Information Act Request Seeking Information on Purposes of Program and Impacts on State Labor Enforcement Efforts

Schneiderman: We Won’t Hesitate to Prosecute Wage Theft – Even if the Federal Government Won’t

Posted on April 11, 2018 in Business News

NEW YORK – New York Attorney General Eric T. Schneiderman – leading a coalition of eleven Attorneys General – sent a letter to Labor Secretary Alexander Acosta raising serious concerns about the U.S. Department of Labor’s Payroll Audit Independent Determination (PAID) Program, a pilot program that allows certain employers who violate labor laws to avoid prosecution and penalties in exchange for simply paying the back wages their employees were already owed under federal law.

The letter makes clear that the PAID Program encourages employers to require their employees to waive important state law protections, like higher minimum wage levels and longer time periods to sue, in exchange for the employer’s payment of overdue wages. Even though such waivers may not be enforceable against state law enforcement entities, employees may be misled into believing they have no legal recourse to fully vindicate their workplace rights.

“As we’ve said from the start, the PAID Program is nothing more than a Get Out of Jail Free card for predatory employers. Our coalition of Attorneys General won’t stand by as the Trump administration grants amnesty to those who commit wage theft and take advantage of their employees,” said Attorney General Schneiderman. “I want to be clear to those doing business in New York: we will continue to prosecute labor violations to the fullest extent of the law, regardless of whether employers choose to participate in the PAID Program – because all workers deserve a fair day’s pay for a fair day’s work.”

(Read More)

Do wage theft laws in Ohio harm or help workers?

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BUSINESS
Updated Apr 15, 10:24 AM; Posted Apr 15, 5:00 AM

Cleveland, Ohio — Matthew J. Grassi got to savor victory for only a few minutes.

The Ohio Department of Commerce had just awarded him $1,701 in a wage theft claim against his former employer. Then the investigator told him, “It is going to really be difficult for you to see this money.”

A decade later, Grassi has “never seen a dime.” His former employer never responded to the state’s request for payment. The state says the debt probably can’t be collected.

Grassi was a victim of wage theft, a term commonly used to describe failure to pay workers fully for their labor. In Ohio, his story may not be that uncommon.

Ohio ranked second among the 10 largest states for a common type of wage theft, minimum wage violations, according to a report last year by the Economic Policy Institute, a left-leaning think tank in Washington. It estimates that Ohioans annually lose $600 million to wage theft.

But the state generally denies claims of wage theft, according to a Plain Dealer analysis of 4,800 complaints filed from 2010 to 2017. Even when it approves claims, victims only have a 50-50 chance to collect what they are owed.

Experts say it stems from two problems: the below-average strength of Ohio’s laws against wage theft, and the state’s lax enforcement of them.

Officially, Ohio lets wage-theft victims collect three times their back wages, called treble damages. In practice, it often chooses to waive that penalty for first-time offenders.

“In Ohio, it is not a set policy that is geared toward protecting workers and advocating for their rights,” said Daniel J. Galvin, a Northwestern University professor who studied enforcement of the law across the states. “They’re in the business of employer assistance.”

(Read More)

Union workers: More coming forward against wage theft

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By Bill Shaner
April 12, 2018

Carpenters and activists again rallied in front of the 145 Front St. development earlier this week, but this time for a different reason: They were taking a victory lap of sorts, after a subcontractor on the job was forced to pay a carpenter $15,000 in a wrongful termination settlement.

P&B Partitions, a subcontractor hired by Erland Construction for sheet wall work, was forced by the National Labor Relations Board to pay contractor Eddie Vasquez $15,200 in back pay and $147 in interest, according to a copy of the settlement. Vasquez was fired, according to a release from the New England Regional Council of Carpenters, after he started working with the union on a wage theft case and encouraging others to join the effort.

Vasquez himself was at the rally, and said the money was overdue, but the larger issue of wage theft, of which the union now has 12 open cases, is still ongoing. The carpenters union rallied outside of 145 Front St. weekly for much of last year, demanding a resolution to the wage theft cases.

“We got the upper hand. More workers are coming forward. More workers are telling the truth,” said Vasquez. “What happens is, they prey on the weak. These companies prey on the weak.”

The U.S. Department of Labor complaints the union filed against the contractor are still under review. The cases, including Vasquez’s, mostly center around cash overtime pay promised but never delivered, according to the union. While only 12 complaints have been filed, Vasquez said the number of workers who weren’t paid overtime on the job is closer to 30.

Union organizer Manny Gines said a main goal of the antiwage theft effort, which would be addressed by a wage theft bill currently in the state Senate, is making sure companies with a record of cheating workers don’t get brought on jobs. As it stands now, Gines said, nothing prevents companies from hiring subcontractors with a history of wage theft.

“The bottom line is, they want to use cheap labor,” said Gines. “We’re trying to hold them accountable.”

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