Construction Execs Plead Guilty To Defrauding Workers, DA Says

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More than two dozen construction workers were defrauded out of an estimated $95,000 in wages.

By Brendan Krisel, Patch National Staff
Apr 5, 2018 11:58 am ET

MIDTOWN MANHATTAN, NY – Two construction company executives pleaded guilty to defrauding workers out of wages for a Midtown construction job, New York District Attorney Cyrus Vance, Jr., announced Thursday.

Nikitas Nikolis, of Queens, and Anthony Caggiano, of Long Island, will be forced to pay restitution to workers hired by City Metro Corp between June 2015 and April 2017, prosecutors said. Nikolis, 61, and Caggiano, 54, pleaded guilty to first-degree scheme to defraud on Thursday, prosecutors said.

Between June 2015 and April 2017 Nikolis and Caggiano stole an estimated $95,000 from more than two dozen workers hired by City Metro Corp for a Midtown Manhattan construction job, prosecutors said. The two construction executives would divert proceeds from the job, intentionally failing to keep the workers’ wages in reserve, prosecutors said. As a result, some workers were paid only a portion of their earned wages and some workers weren’t paid at all, prosecutors said.

The workers were hired by City Metro Corp to perform a concrete installation project at a Midtown hotel under construction, prosecutors said.

“Whether it’s withholding overtime, misclassifying workers, or not paying them outright, wage theft is a crime that will be prosecuted aggressively in Manhattan,” District Attorney Vance said in a statement. “While wage theft is intolerable in any industry, it is particularly egregious in cases like these, where laborers who put their physical safety on the line are not even paid for their work.”

(See Article)

Employers Steal $15B From Low Wage Workers Each Year

Posted by National Alliance for Fair Contracting on

February 23, 2018

Biography

David Cooper is a Senior Economic Analyst & Deputy Director of EARN. David conducts both national and state-level research, with a focus on the minimum wage, wage theft, employment and unemployment, poverty, and wage and income trends. He also coordinates and provides technical support to the Economic Analysis and Research Network (EARN), a national network of over 60 state-level policy research and advocacy organizations.

… wage theft can occur in a variety of different forms. It can be everything from a worker not being paid for all the hours that they’ve worked, to workers not getting overtime for working more than 40 hours per week, someone getting paid less than the minimum wage, even things like illegal deduction from folks’ paychecks or not getting meal breaks.The really egregious cases are when folks don’t get paid at all and believe or not, that happens more frequently than we certainly would like, particularly in certain industries where there’s a lot of use of, for example, immigrant labor or sub-contractors who may not be paid, not just for all the hours that that they work, but some of them don’t actually even get any of the money that they’re owed.

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GUEST COMMENTARY: WE NEED TO TALK ABOUT WAGE THEFT

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Posted on February 19, 2018
By Melissa Wells

…

Wage theft occurs when a worker performs a job for an agreed-upon wage, and after completing the job, does not receive the full wage they are entitled to. The Center for Popular Democracy estimates that 580,000 Maryland workers suffer from wage theft each year, for a total of $875 million in gross wages lost annually. These numbers may underestimate the scope of wage theft in Maryland, as our Department of Labor, Licensing and Regulation has found that “employees often do not file a claim for a wage payment and collection law violation because they fear retaliation,” leaving us with an incomplete picture of wage theft’s prevalence. Low-wage workers are the most vulnerable to wage theft, particularly in industries like construction, food service and landscaping.

Workers are right to fear retaliation from their employers because Maryland law does not protect them from “discharge, demotion, discipline, or any other action that would reasonably deter an employee from engaging in protected activity under the state’s wage payment and protection law.” This means that though Maryland workers have a right to bring wage theft claims, they do not have a right against repercussions from their employer for bringing the claims.

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Two billion dollars in stolen wages were recovered for workers in 2015 and 2016-and that’s just a drop in the bucket

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EPI Report * By Celine McNicholas, Zane Mokhiber, and Adam Chaikof
December 13, 2017

What this study finds: In 2015 and 2016, a total of $2 billion in stolen wages ($880.3 million in 2015; $1.1 billion in 2016) were recovered for workers by the U.S. Department of Labor ($246.8 million in 2015; $266.6 million in 2016); by state departments of labor and attorneys general in 39 states ($170.0 million in 2015; $147.5 million in 2016); and through class action settlements ($463.6 million in 2015; $695.5 million in 2016). These represent wages stolen by employers who, for example, refuse to pay promised wages, pay employees for only some of the hours worked, or fail to pay overtime premiums when employees work more than 40 hours in a week.

Why it matters: Given that wage theft disproportionately affects workers from low-income households-who are already struggling to make ends meet-the loss of wages can be devastating. And these recovery numbers likely dramatically underrepresent the pervasiveness of wage theft-it has been estimated that low-wage workers lose more than $50 billion annually to wage theft. Regardless of what share of actual wage theft the recovery numbers represent, these data are one more reminder that wage theft is not isolated to a few bad employers, but affects workers much more broadly.

What can be done about it: Implement legislation to improve pay transparency; increase penalties for wage theft violations; support strong government enforcement of wage and hour laws; protect workers from retaliation when they report violations; and protect worker rights to collective and class action.

Introduction

The last four decades have been marked by rising wage inequality, with the vast majority of American workers experiencing wage stagnation while those at the top rung of the economic ladder reap the benefits of growth in productivity. These dynamics mean that many workers struggle to make ends meet; in 2016 one in fivefamilies in which at least one person worked were living below 200 percent of the federal poverty line (U.S. Census Bureau 2017).1 This situation is deeply exacerbated by wage theft, which continues to rob workers of billions of dollars in earned pay each year, with low-income workers being disproportionately affected (Bernhardt et al. 2009).

Wage theft occurs when employers fail to pay workers the full wages to which they are entitled for their labor. This includes, for example, refusing to pay workers the total amount of promised wages, not paying for time spent preparing a workstation at the start of a shift or closing up at the end of a shift, and not paying overtime premiums to workers who work more than 40 hours a week. Consider a full-time minimum wage worker earning the federal minimum wage of $7.25 an hour, around $15,000 per year. If this worker’s employer asks her to work 15 minutes “off the clock” before and after her 8-hour shift each day, that extra half hour of unpaid work each day represents a loss to the worker (and a gain to the employer) of around $1,400 per year, including the overtime premiums she should have been paid. This constitutes theft of nearly 10 percent of a minimum wage employee’s annual earnings-which can mean the difference between paying the rent and utilities or risking eviction or the loss of gas, water, or electric service.

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(Press Release)

(Full PDF of Study)

New Mexico Agrees to Strengthen Wage-Theft Enforcement (NM)

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By MORGAN LEE, Associated Press
Dec. 20, 2017, at 7:23 p.m.

SANTA FE, N.M. (AP) – A legal settlement has been reached to shore up New Mexico’s enforcement of laws against wage theft by employers who fail to pay or fully pay workers, a coalition of workers’ rights groups announced on Wednesday.

The settlement, if approved by a state district court judge, resolves accusation that the Department of Workforce Solutions failed to enforce provisions of the state’s Minimum Wage Act by improperly dismissing complaints, failing to pursue claims over $10,000 and not holding employers liable for damages.

It would require the Division of Labor Relations pursue more accusations of wage theft, make it easier for non-English speakers and others to file claims, and force negligent employers to pay back unpaid wages three-fold, the advocacy groups said.

New Mexico Center for Law and Poverty attorney Elizabeth Wagoner says more than 500 claims of wage theft are filed with the state each year. She estimated that state officials previously denied one out of every four complaints for improper reasons, while more claims were never filed because of administrative and language barriers.

…

The agency said some disputed policies and procedures have been in place since before Gov. Susana Martinez took office in 2011, without specifying which ones. Plaintiffs said the state failed to effectively enforce elements of a 2009 law designed to facilitate wage-theft investigations.

Provisions of the proposed settlement include:

-Lifting the $10,000 on claims of missing wages.

-Extends the statute of limitations for filing a claim from one year to three years.

-The Division of Labor Relations must seek damages on behalf of workers against employers.

-The state must provide Spanish-language claims forms and provide interpretation services for other languages.

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DA cracking down on wage theft by construction contractors (NY)

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By Priscilla DeGregory and Emily Saul
December 4, 2017 | 4:36pm

The city’s five district attorneys have agreed to crack down on wage theft by construction contractors – after an investigation revealed that more than $1.2 million in wages had been illegally withheld from workers.

The state Department of Labor has uncovered some 400 cases since it began looking into wage theft earlier this year. Nearly $700,000 has been returned so far, authorities said, and the investigation is ongoing.

“Every week, New Yorkers lose $20 million in unpaid wages. And every day, construction workers who risk their lives doing dangerous jobs have to wonder whether they’ll actually be paid for their work,” Manhattan DA Cy Vance said Monday.

Wage theft is one of the most pervasive problems in New York City and State, and in the construction industry in particular, workers are all too often preyed upon by their employers, who are able to steal millions of dollars in unpaid wages.

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New York Officials Battle Wage Theft in Construction Industry (NY)

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By LUIS FERRÉ-SADURNÍ
DEC. 6, 2017

For months, Ariel Ortega’s paychecks would bounce when he went to deposit them at his bank each Friday. He says he never saw the promised overtime pay for his extra hours on Saturdays remodeling a 12-floor apartment building in Brooklyn.

Mr. Ortega considered quitting. But when he voiced concerns, his boss, Michael Stathakis, would grow agitated and threaten not to pay the remainder of what he was owed if he quit, Mr. Ortega said.

“It was December, and it was cold, so it would be hard to get another construction job,” Mr. Ortega, who is owed hundreds of dollars in wages and overtime pay, said in Spanish. “I had to stick through it.”

Mr. Ortega, 30, was vindicated last week when his employer, Whisk Remodeling Corp., owned by Mr. Stathakis, pleaded guilty to fraud, admitting he failed to pay Mr. Ortega and dozens of other workers, many of them immigrants, more than $90,000 in wages.

Mr. Ortega’s case is not unique – and prosecutors in New York have taken note.

District attorneys in all five boroughs of New York City and in other counties, in coordination with state agencies, have ratcheted up efforts against wage theft in the construction industry. A string of indictments this year detailed more than $2.5 million in unpaid wages for more than 400 construction workers in Manhattan and beyond, Cyrus R. Vance Jr., the Manhattan district attorney, said at a news conference on Monday.

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Senator Lewis: We Need To Do More to Stop Wage Theft

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It is estimated that nearly $700 million is not paid to about 350,000 mostly low-wage workers each year in Massachusetts.

By Bob Holmes (Patch Staff)
Updated Oct 6, 2017 2:12 pm ET

An Op-Ed Column from Senator Jason Lewis and Representative Paul Brodeur:

Earlier this year, at the start of the new legislative session, we were pleased to be appointed by the Senate President and House Speaker, respectively, to co-Chair the Joint Committee on Labor and Workforce Development. Together, we have since immersed ourselves in a wide range of labor and employment issues in the Commonwealth. We have held committee hearings on proposed legislation, met with many different stakeholders to hear their concerns and feedback, and conducted research on policies and best practices around the country.

One particular issue that may surprise many people is the serious problem of wage theft. Wage theft is a collective term for any denial of wages or benefits that are rightfully owed to an employee. The most common wage theft violations in Massachusetts are non-payment of wages, failure to keep true and accurate records, failure to pay the proper overtime rate, child labor violations, failure to pay minimum wage or tips, and failure to pay prevailing wage. Other violations include failure to submit accurate payroll records, earned sick time violations, and improper classification of employees as independent contractors.

Just how pervasive is wage theft? It is estimated that nearly $700 million is not paid to about 350,000 mostly low-wage workers each year in Massachusetts. In addition to the harm this inflicts on struggling working families, it also cheats the state out of greater economic activity, jobs, and tax revenue.

The Attorney General’s Office (AGO) is the state’s primary enforcer of laws relating to wages. Enforcement is carried out by attorneys and investigators in the AGO’s Fair Labor Division (FLD). In Fiscal Year 2017, the FLD received 16,684 calls and 5,604 complaints, and opened 607 cases related to wage theft. The FLD ordered employers to pay more than $6 million in restitution and more than $2.6 million in penalties. This is more than double the restitution ($2.6 million) and about triple the penalties ($900,000) from Fiscal Year 2016. The FLD also cited or settled 27 earned sick time cases, totaling $160,000 in restitution and penalties. And, the FLD issued 47 citations to 46 employers and assessed more than $270,000 in penalties for child labor law violations.

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Wage Theft Charged At Farnam Court (CT)

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by ALLAN APPEL | Oct 6, 2017 8:35 am

A “fat cat” in a plush three-piece suit dangled and strangled a working guy in a yellow construction helmet on Grand Avenue the other day.

The cat and worker were 15-foot-tall cartoon characters full of compressed air and bobbing in the breeze. But the display was no joke no joke. The blow-up figures were deployed Thursday afternoon by members and supporters of the New England Regional Council of Carpenters (NERCC) in support of Terail Slaughter, a non-union carpenter who had been employed helping to build the tower buildings of the Housing Authority of New Haven’s Farnam Court Townhouses rebuilding project.

About a dozen carpenters and their supporters were on the corner of Grand Avenue and Hamilton Street for two purposes, according to lead organizer Ernest Pagan: to support a wage theft complaint, and to encourage other workers to step forward and make similar complaints when necessary.

The Complaint

Slaughter has lodged an $18,000 wage theft complaint against Palmucci Rivera Construction Concepts (PRCC), a carpentry subcontractor managed by Haynes Construction. The Seymour-based company is a general contractor on the $42 million redevelopment project of the 75-year-old troubled housing complex.

The complaint, which was filed with the state Department of Labor in mid-summer, documents that Slaughter, a nine-year veteran carpenter who had also been a starting guard at Wilbur Cross, was paid $14 an hour. The “prevailing wage” – that is, the nationally mandated wage for a carpenter in Connecticut working on a publicly funded project, is $56 an hour.

Slaughter began work in January 2016. In April he met Pagan, who had come to fact-find and organize. Pagan urged Slaughter to ask for a more appropriate salary. Slaughter eventually took the advice, and PRCC, without acknowledging wrongdoing, raised his hourly wage to $46.

That, however, is the prevailing wage for a laborer, not for a carpenter. This alerted Pagan that, in addition to theft of wages directly, PRCC’s move was misclassifying Slaughter into a lower-paying category than he deserved.

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House, Senate Democrats Move to Prevent Wage Theft (MI)

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Hardworking men and women deserve full amount they’ve earned

Monday, October 30, 2017

LANSING – House and Senate Democrats announced their plan to Prevent Wage Theft today to make sure workers get what they’ve earned. A report from the Economic Policy Institute earlier this year found that Michigan workers across all demographic groups are losing $429 million every year as a result of wage theft. It’s been almost 40 years since Michigan updated many of the state’s laws to protect workers’ pay.

“When we’re talking about nearly half a billion dollars being taken from workers’ paychecks illegally, it’s clear the system is broken,” said state SenatorJim Ananich (D-Flint). “These folks are playing by the rules and trying to provide for themselves and their families. We need to do right by them and bring our laws into the 21st century.”

Data from the EPI report show that 17 percent of low-wage workers in Michigan have experienced wage theft, which includes paying less than minimum wage, failing to pay overtime, working off the clock, confiscating tips, misclassifying employees as independent contractors, or even failing to pay workers at all. Earlier this year, FOX 17 reported the story of 24 West Michigan carpenters who hadn’t been paid $35,000 that a construction company owed them. They had bank accounts frozen, couldn’t afford family medical expenses and even lost their cars.

…

In addition to holding back Michigan’s workers and its economy by keeping hundreds of millions of dollars out of pocketbooks around the state, law-abiding businesses are at a disadvantage to the bad actors who increase their profits by stealing from their employees.

“When Michigan’s workers do better, our whole state benefits. Sadly, a handful of bad actors are holding us back to the tune of nearly half a billion dollars per year and our state isn’t doing enough to help,” said House Democratic Leader Sam Singh (D-East Lansing). “Democrats are stepping up to ensure that hardworking Michigan workers get what they earn and that everyone plays by the same rules.”

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