Exposing Wage Theft Without Fear: States Must Protect Workers from Retaliation

Posted by National Alliance for Fair Contracting on

NELP
June 24, 2019

Around the country, workers who speak up about workplace violations often face a significant risk of retaliation by their employer. Yet our laws generally place the burden on workers to come forward and report violations, either through complaints filed with enforcement agencies or through lawsuits filed in state or federal court. Government investigations or audits of employers are relatively rare. Retaliation is therefore one of the most pressing and persistent challenges to effective enforcement of our workplace laws-workers should not fear that their employer will punish them for asserting their rights. Ultimately, any law intending to protect workers’ rights must protect workers from retaliation in order to make that law a reality.

Why Do Workers Experience Retaliation?

  • Workers in the U.S. generally bear the burden of enforcing their own labor protections-it is up to them to come forward to report violations.
  • When a worker comes forward to report a workplace violation, we know that employers often retaliate or threaten to retaliate against the worker.
  • ·Under our current system, workers bear the entire risk of retaliation from their employer when they report violations.

What Does Retaliation Look Like?

  • Retaliation takes many shapes and can be difficult to pinpoint or prove. Employers, for example, may fire a worker, demote a worker, reduce a worker’s hours, change worker’s schedule to a less favorable one, subject a worker to new forms of harassment, unfairly discipline a worker, threaten to report a worker or a worker’s family member to immigration authorities, and much more.

What Does Retaliation Cost Workers?

  • When workers experience retaliation for trying to protect their rights, the costs can quickly escalate from both a financial and emotional standpoint, especially for the countless workers nationwide who live paycheck to paycheck. A worker may experience lost pay, for example, which can quickly lead to missed payments, lower credit scores, eviction, repossession of a car or other property, suspension of a license, inability to pay child support or taxes, attorney’s fees and costs, stress, trauma, and more.
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US prosecutors target construction firms that “institutionalise theft” from their own workers

Posted by National Alliance for Fair Contracting on

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)

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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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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.'”

(Read More)

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So-called ‘right to work’ is an attack on workers (AK)

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Posted June 26, 2018 06:10 am
By Dave Reaves

Have you ever had a bad day at work? It happens to all of us once in a while. Back in the days before organized labor and higher work standards people suffered at their jobs because of unsafe conditions, long hours, no training and poor benefits. Workers got hurt and were literally thrown out into the gutters, lost jobs with no notice, and had no pensions after years of toiling away.

As a nation, we’ve come a long way since the 1800s, but the effort to preserve workers’ rights is constant. Decent jobs with fair wages and benefits provide stability to our communities over the long haul. I am talking about our spouses, children, relatives and friends, people who contribute to the local economy every day.

Occasionally I hear people say, “unions were important years ago, but we just don’t need them anymore.” I couldn’t disagree more. Decades ago, when unions were at their peak, many more Americans had good pensions, good employer health care, job security and living wages. Unions have been at the forefront of every economic justice issue in America for the last 100 years: Medicare, Social Security, workers’ compensation laws, minimum wage and overtime laws, worker safety laws, and much more.

Unions have been the strongest – and often the only – counterbalance to the extraordinary attacks we’ve seen on the middle class. But after decades of unrelenting attacks on unions by the rich and powerful, those things we used to consider fundamental to the American dream are increasingly rare. These attacks on unions have unfortunately been quite successful, and the results have been all too predictable: a massive transfer of money from the middle class and poor to the top 1 percent. Think about this staggering fact: the Walton family, which owns Wal-Mart, controls a fortune equal to the wealth of the bottom 42 percent of Americans combined.

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Dave Reaves is the business manager for Local 1547. IBEW Local 1547 represents more than 4,000 workers in the state of Alaska.

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

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

New research finds that a wide range of big corporations have been shortchanging the people who work for them 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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High-Road Development: Building Prosperity for Workers and the District

Posted by National Alliance for Fair Contracting on

By Brittany Alston * July 2, 2018
Economic Development / Jobs & Training

Executive Summary
Over the past twenty years, the District has seen dramatic economic and population growth, including a development boom that has transformed the city’s skyline, remade neighborhoods, and changed the city’s employment landscape. These changes have led to prosperity for some, but that prosperity has not been shared with DC’s low-wage workers. District leaders should seize on DC’s growth as an opportunity to encourage “high-road development,” pairing development with high-quality jobs in ways that will support workers, residents, and high-quality development projects.

By taking a high-road economic development approach-in which developers partner with unions, invest in workers, and provide quality employment opportunities to residents-the District can ensure that the city’s ongoing growth provides benefits to DC residents and workers. Unfortunately, District leaders have missed many opportunities to practice high-road development. In projects such as the Wharf and Union Market, the city has sweetened development deals with large subsidy packages, without setting job quality standards for District workers – subsidizing low-wage, low-quality employment that makes it hard for workers to make ends meet in a city where the cost of living keeps going up.

High-road development is associated with higher wages and benefits, reduced incidents of wage theft, and boosts to the local economy when workers spend their additional earnings. High-road development also helps ensure that projects are completed in a timely way and with high quality.

Looking to other jurisdictions that have taken a high-road approach can equip the District with tools to adopt high-road development. By enforcing existing labor laws, attaching job creation and quality standards to all economic development policies, and penalizing subsidy recipients if they fail to meet job quality requirements, policymakers can ensure that the District is taking the high road when it comes to economic development.

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A “High-Road” Approach Could Make DC Development Work for Workers and Residents

High-road economic development seeks to create an environment where both public and private entities value a diverse and skilled workforce, seeing the workforce as a profitable asset that must be sustained and invested in over time. High-road economic development ensures that public dollars result in public benefits and economic growth-this includes a high quality of life for residents and effective and transparent governance.

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During the decision-making process, developers can factor these benefits into a robust impact analysis to see the benefits of hiring union workers and paying living wages. For example, The AFL-CIO Building Investment Trust, a bank collective trust and trustee of PNC bank, invests in commercial real estate using union pension funds and relies solely on organized labor when building. Their investments created a portfolio with approximately $5 billion in net assets and 78 million hours in union construction work and created thousands of unionized operation jobs, with properties in the District and nationwide. For the AFL- CIO Building Investment Trust, high-road development remains a profitable financial proposition, as they continue to invest in union projects.

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UNIONIZATION IS A CRUCIAL COMPONENT TO HIGH-ROAD DEVELOPMENT

An essential component of high-road development is collaboration with labor unions. Many high-road developments start with project labor agreements-agreements between the building trades and project developers that govern the conditions of employment for the project and create project management efficiencies-during the project’s construction phase. Once the construction is complete, employees of the businesses located at the development site may want union representation as well.

(Read More)

Many DC projects don’t comply with local hiring mandate (DC)

Posted by National Alliance for Fair Contracting on

Kim Slowey
PUBLISHED July 2, 2018

Dive Brief:

An April audit of Washington, D.C.’s First Source mandate, which requires local workers be given employment preference for construction projects receiving taxpayer assistance, revealed that contractors and developers are not meeting the program guidelines and that the Department of Employment Services (DOES) is doing relatively little to make sure companies are in compliance, according to The Washington Times. Companies building qualifying projects of $300,000 to $5 million must hire 51% local residents, and those in charge of projects valued at more than $5 million must meet a higher percentage in several categories.

Lawrence Perry, deputy auditor for the Office of the D.C. Auditor, testified before the District council’s Committee on Labor and Workforce Development on June 21 and told the committee members that the agency in charge of enforcing the First Source program was insufficiently monitoring qualifying companies to make sure they entered into a First Source agreement; lacked written policies and procedures necessary to monitor and judge the success of First Source and did not have written guidelines for enforcement and imposition of fines, with only one financial penalty being issued in the history of the program. The auditor’s report also called attention to the fact that companies are allowed to self-report project data with little or no verification by the DOES.

Construction industry groups have said the program paperwork is too burdensome. They also said there is a shortage of skilled workers and that the lack of affordable housing is forcing the First Source-qualified employees that once lived in the District to the suburbs, shrinking the pool of craft workers even more. One council member said developers and contractors consider the possibility of a low fine just another cost of doing business.

Dive Insight:

Other local governments have no problem enforcing local hiring mandates and levying large fines against contractors that miss the mark.

Detroit fined contractors working on the $868 million Little Caesars Arena, now home to the NHL’s Red Wings hockey team and the NBA’s Detroit Pistons, a total of $5.2 million for not meeting the city’s 51% local-hire goals. The Michigan city said that, of the project’s three million man-hours, Detroit residents worked only 25%.

(Read More)

As Colorado construction industry makes plans to hire 30,000, Denver is using its leverage to add local-hiring rules on projects (CO)

Posted by National Alliance for Fair Contracting on

National Western Center’s $275 million site-prep contract is first to require outreach to lower-income areas

By JON MURRAY
PUBLISHED: June 25, 2018 at 7:00 am

The Denver metro area’s construction boom is about to intensify as upward of $4 billion in big projects get underway in the city, requiring a lot of hiring to fill jobs on building sites.

And for the first time, local leaders have used the city’s leverage on a large public contract to make sure residents of disadvantaged neighborhoods share in the thousands of new jobs. The City Council on June 11 approved a $275 million site-preparation contract – the first nine-figure deal for the National Western Center project – that requires Hensel Phelps Construction and its subcontractors to recruit heavily from the city’s six most economically disadvantaged ZIP codes, largely southwest and northeast of downtown.

For now, the requirements in the pilot program stop short of setting local-hiring quotas or even targets, and it’s considered a bit of a dry run.

But if the initiative is successful at training residents and placing them in project jobs, it could portend more aggressive steps by the City Council and Mayor Michael Hancock’s administration to extract local job benefits on some upcoming projects.

Construction is an industry flush with opportunity in coming years, both for entry-level jobs and those that require light training or apprenticeship programs, from masons to electricians to pipefitters. Starting wages for many jobs begin at $13 or higher.

The state’s industry employs about 175,000 workers, according to the Associated General Contractors of Colorado, and that’s slightly more than the pre-Great Recession peak in 2007. But a Colorado State University study has projected the industry will need to fill 14,000 more positions in the next five years, a figure that equates to hiring 30,000 new workers, once baby boomers’ retirements and other attrition are factored in.

(Read More)