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New study examines wage theft in Mass construction Posted by on

New research published by the University of Massachusetts Amherst Labor Center asserts how the illegal theft of workers’ wages, especially those of undocumented immigrant laborers, has reached epidemic levels in the residential construction industry in Massachusetts. In the working paper “The Epidemic of Wage Theft in Residential Construction in Massachusetts,” Tom Juravich, professor of sociology, with research assistants and co-authors Essie Ablavsky and Jake Williams, present three case studies examining the subcontractors for one of the nation’s largest homebuilding companies, regional drywall-hanging companies and affordable housing construction by a community development corporation.

Based on legal records, news reports and 27 in-depth interviews with construction workers, contractors, homeowners, union staff and community-based organizers, Juravich and his co-authors present evidence that contractors in residential construction responded to their financial losses from the Great Recession by the wholesale and illegal misclassification of their workers as independent contractors.

“By not paying taxes on workers’ wages and by not contributing to worker compensation funds, contractors reduced their building costs by 30 percent,” the paper states. “These contingent workers—the majority of who are undocumented immigrants—are routinely cheated out of their wages by contractors who pay late, do not compensate for overtime, and sometimes do not pay for work at all. Firms generate profits by victimizing some of the most vulnerable workers in Massachusetts, delivering poor quality homes to consumers, and leaving citizens of the commonwealth on the hook to make up for hundreds of millions in lost tax revenue.”

Juravich and his co-authors focused on residential construction in and around Worcester and Framingham, two modest-sized cities with populations of 182,000 and 68,100, respectively. “We chose this location, in part, because of the belief that innovation (and the violations that prompted them) often begin in smaller markets like this one before entering larger urban markets such as nearby Boston,” Juravich says. “In the case of construction, practices such as these emerge in these regional markets in residential construction, far away from the watchful eye of labor organizations and other regulatory bodies that tend to focus on larger cities and commercial construction projects.”

Juravich and his co-authors illustrate the tactics allegedly used by a major national homebuilder and its subcontractors, five of which were ordered to pay more than $400,000 in unpaid wages and penalties by the Commonwealth of Massachusetts’ Attorney General’s office for wage theft violations in the state. The researchers say documentation shows that while the homebuilder financially benefited from this wage theft, the company was legally insulated from being charged with any wrongdoing and few of these wages and fines were ever collected, as many of its subcontractors simply closed their doors or reopened under new names.

They also highlight regional drywall firms that they say have a long history of illegal misclassification and wage theft in New England, demonstrating how easy it is to reorganize and resume operations under new names in order to avoid prosecution and to continue these practices.

“Because no existing mechanism prevents such firms from avoiding prosecution, we have seen an explosion of firms that employ illegal misclassification and wage theft in the drywall industry,” Juravich says. “This phenomenon deeply threatens the economic viability of legitimate contractors who play by the rules. Perhaps more troubling is that the growth of these companies who make their profits from illegal employment practices has begun to move beyond residential construction into more commercial and public types of construction.”

The paper suggests a number of policy recommendations for Massachusetts to combat illegal misclassification and wage theft, including strict enforcement of penalties and fines, public identification of violators, better permanent inter-agency coordination and a dramatic increase in workplace raids.

“We have seen how woefully inadequate the regulatory structure has been and watched the emergence of a whole new production regime in residential construction built upon a foundation wage theft,” Juravich says. “Without concerted change, these new methods of production will both intensify and spread to other forms of construction victimizing largely immigrant workers in the industry. The quality of construction will continue to decline delivering a poor value to homeowners while leaving the taxpayer on the hook to cover lost revenue and the medical cost of those not covered by workers’ compensation.”

Ultimately, however, the authors state that the real solution to the crisis lies with immigration reform.

“The single, most important policy action to combat wage theft and misclassification is genuine immigration reform,” they conclude in the paper. “Without real immigration reform that will provide a path to citizenship for the more than 10 million undocumented workers in the United States, it will be difficult to control forced misclassification of work and the theft of workers’ wages. As long as immigrants remain hidden in the shadows and largely excluded from regularized employment, unscrupulous employers will continue to exploit their vulnerability to increase their own profit.”





Union proves worth to nonunion carpenters again Posted by on

Union representatives recently go together with more than 15 carpenters who were employed by J&V Construction to collect checks for back wages. Each of the men was issued a check for between $20,000-24,000.

The union had spoken to the men when they were working at UConn, building the new basketball training center earlier this year. After learning they were owed significant money from their employer, they encouraged and helped them file wage claims with the state.

For the individual carpenters, the checks represent a big win; significant money they had earned, but thought they'd never get. For the union and the rest of the industry, the checks are another reminder that knowing your rights and standing together to protect them is a worthwhile venture. Congratulations to these carpenters and the union representatives who helped them get justice.





Carpenters support event for low wage workers Posted by on

In the last year, fast food workers across the country have been building a campaign to raise wages in their industry. The campaign has given energy to efforts to raise the minimum wage nationally and in states and communities across America. But the fast food industry isn't the only one where massive profits are generated and an unreasonable gulf exists between the compensation given to employees in corporate offices and those on the front lines.

From health care to hospitality and construction to customer service, too many workers are being paid too little for working so hard. In Massachusetts, an upcoming event aims to elevate their cause.

The New England Regional Council of Carpenters is joining individuals in Boston and Springfield on June 12 to support low wage workers. Hosted by Massachusetts Jobs with Justice, the Low Wage Worker Day of Action will bring information and focus attention on people who work hard and still struggle to support themselves and their families. More than that, it will encourage workers to begin standing together and acting together in a way that will make a difference.

The event matches the efforts of the Carpenters union who monitor nonunion construction sites and build relationships with nonunion carpenters. All too often, nonunion carpenters are not provided the wages and benefits they deserve, given the level of skill required and risk present on today's construction sites.

In Boston, the event will be held at Copley Square, in Springfield it will be at the Mount Calvary Church at John Street and Plainfield Street (Rt 20A). Both events will take place from 4-6 pm. Union carpenters, friends and families are invited and encouraged to participate.





"Groundhog" Day at UConn? Posted by on

At least one contractor that was ordered in late February to stop working on the $32 million expansion of the UConn basketball complex because they didn't have a workers' compensation policy returned to the project. Union carpenters and students of the university have started to inform the public with a large banner in front of the project and stories in the Hartford Courant and the campus newspaper.

Intext Building Systems, Inc. of Glastonbury and JV Construction of East Hartford were issued "Stop Work" orders from the Connecticut Labor Department after a visit to the site. There were issues with workers being misclassified as "independent contractors" and some of the 19 workers could not identify their employers.

J&V Construction was found to have owed $368,000 in back wages to workers and is still barred form the site, but Intext has taken on their workers, raising questions about whether there are still issues.

Chris Gallo, a member of Carpenters Local 24 who went to work on the site after the "Stop Work" orders were issued told the Courant "It's absolutely horrible- The whole job was just a mess. We go there in the middle of it, and we get it all straightened out, and we find out the guys who messed it up are back again. How would you feel? I'm losing my job because of it. Hopefully they get a building they're looking for."





CT Governor Malloy's budget gets Carpenter support Posted by on

Dave Jarvis, an organizer with the New England Regional Council of Carpenters, appeared before the Connecticut General Assembly’s Appropriations Committee to testify in support of Governor Dan Malloy’s recently submitted Fiscal Year 2015 Mid-Term Budget.

Governor Malloy’s Mid-Term budget includes funding for six additional employees at the Department of Labor to investigate complaints and ensure employers comply with wage and workplace standards.

Jarvis urged members to support the Governor’s proposal to beef up wage and workplace enforcement as the Connecticut construction industry continues to be plagued by employers—many from out of state--who fail to properly pay their workers’ wages, misclassify their workers as independent contractors or pay them cash “off the books.”

Last year alone, the Wage and Workplace Division of the Connecticut Department of Labor handled more than 3,500 claims and recovered over $6.5 million in unpaid wages to 1,701 Connecticut workers. The Wage and Workplace Division also issued 181 Stop Work Orders to employers at construction sites who were found to be in violation of workers’ compensation and labor laws.

“It’s nearly impossible for Connecticut contractors who obey our state labor, tax and worker’s compensation laws to compete against unscrupulous companies that break these laws to gain a bidding advantage,” said Jarvis. He added, “Construction is becoming a magnet for predatory employers. The Wage and Workplace Division is on the front lines of protecting Connecticut workers and employers from these predatory contractors.”





Enforcement against cheating businesses jumps in Mass Posted by on

More than $21 million has been collected from employers in Massachusetts who violated labor laws in the last 18 months, according to the annual report of the Joint Enforcement Task Force on the Underground Economy and Employee Misclassification. The amount represents more than the total that was recovered in all previous years.

The joint task force was created in 2008 and was a welcome development to union carpenters and others who had been working to bring attention to the issue of misclassification. Tens of millions of dollars in state and federal revenue are lost each year due to employee misclassification while employers who play by the rules are put at a competitive disadvantage and workers are stripped of essential protections such as workers' compensation coverage and eligibility for unemployment insurance, Social Security and Medicare.

The issue is especially acute in the construction industry, where the fairness of direct competitive bidding can easily be undermined by a bidder misclassifying employees as independent contractors to save 20-30% on labor cost. Perhaps the largest recent case involved more than $1.1 million in unreported wages found at the renovation of the Boston Marriott Copley Place, where one contractor was paying $4 an hour to employees who were recruited from a substance abuse program in Connecticut. Contractors were issued more than $100,000 in fines on the project.

"The work of the Task Force is invaluable in reducing the growth of the underground economy in the state's construction industry," said Mark Erlich, Executive Secretary-Treasurer of the New England Regional Council of Carpenters. "Taking on the illegal practices of wage theft, misclassification and tax and insurance fraud creates a more level playing field, which ultimately benefits legitimate employers, tradesmen and women and taxpayers."

The joint task force brings together various state agencies, including the Executive Office of Labor and Workforce Development, the Attorney General's Fair Labor Division, the Insurance Fraud Bureau and others.

Both the Boston Globe and the Boston Herald covered the issue.
 





Enforcement against cheating businesses jumps in Mass Posted by on

More than $21 million has been collected from employers in Massachusetts who violated labor laws in the last 18 months, according to the annual report of the Joint Enforcement Task Force on the Underground Economy and Employee Misclassification. The amount represents more than the total that was recovered in all previous years.

The joint task force was created in 2008 as a result efforts by the Carpenters union and others to educate Governor Deval Patrick, state legislators and leaders of several executive branch agencies who enforce laws and policies related to employee misclassification. Tens of millions of dollars in state and federal revenue are lost each year due to employee misclassification while employers who play by the rules are put at a competitive disadvantage and workers are stripped of essential protections such as workers' compensation coverage and eligibility for unemployment insurance, Social Security and Medicare.

The issue is especially acute in the construction industry, where the fairness of direct competitive bidding can easily be undermined by a bidder misclassifying employees as independent contractors to save 20-30% on labor cost. Perhaps the largest recent case involved more than $1.1 million in unreported wages found at the renovation of the Boston Marriot Copley Place, where one contractor was paying $4 an hour to employees who were recruited from a substance abuse program in Connecticut. Contractors were issued more than $100,000 in fines on the project.

"The work of the Task Force is invaluable in reducing the growth of the underground economy in the state's construction industry,” said Mark Erlich, Executive Secretary-Treasurer of the New England Regional Council of Carpenters. “Taking on the illegal practices of wage theft, misclassification and tax and insurance fraud creates a more level playing field, which ultimately benefits legitimate employers, tradesmen and women and taxpayers."

The joint task force brings together various state agencies, including the Executive Office of Labor and Workforce Development, the Attorney General’s Fair Labor Division, the Insurance Fraud Bureau and others.

Both the Boston Globe and the Boston Herald covered the issue.





Carpenters highlight thefts at Botany Bay Posted by on

NERCC staff recently spoke to a group of five workers employed at the Botany Bay development in Worcester who were owed more than $25,000 in wages and began making noise about it. Regular bannering was done at the site and last week a rally drew members of Local 107, representatives of the MetroWest Worker's Center, religious leaders and Worcester City Councilor Sarai Rivera.

The event led to pieces in the Worcester Telegram and Gazette and Vocero Hispano, which highlighted the wage theft and the unwillingness of the project developer to do anything but turn a blind eye. The bad publicity may force his hand, though, as regular events are gaining attention and the support of the community.
 





State, Feds raid Stamford mega-sites Posted by on

The Connecticut Department of Labor was joined by the US Department of Labor, OSHA and local and state police in raids of at least four construction sites in Stamford last week in an unprecedented effort to crack down on payroll fraud. The Stamford Advocate covered the raids and published a column by Angela Carella calling for developers to clean up their businesses.

The raids targeted three sites being built by Building and Land Technology and another by Greenfield Partners. The sites have all previously been the target of numerous public complaints as well as demonstrations by union carpenters and other trades workers. The Harbor Point project being built by BL&T has also been the site of numerious enforcement actions. More than 34 "Stop Work" orders had been issued at the project prior to last week's raids.

Investigators talked to more than 200 workers, according to media reports, and will sort out possible violations in the coming weeks after reviewing those interviews.
 





Misclassification crackdown, publicity Posted by on

Misclassification has been a serious problem in the construction industry for years, and something against which the Carpenters union has led the fight locally, regionally and nationally. Union efforts resulted first in greater understanding and awareness among elected officials and now regularly lead to enforcement and publicity on the issue that is either directly a result of union action or an indirect result of efforts initiated by the union.

Two items broke this week that reinforce that point. In Worcester, Telegram and Gazette columnist Clive McFarlane wrote about efforts by NERCC Organizer Manny Gines to chase down employers who cheat by misclassifying workers as independent contractors or cheat them out of their wages.

McFarlane's column ties into an announcement earlier in the week by the Executive Office of Labor in Massachusetts that more they had found more than 2,300 workers misclassified by just three employers. Though the three companies were not involved in the construction industry, the eye-popping $11 million in unreported wages and millions of dollars the state should have received for unemployment insurance payments generated new stories that put the issue in front of the general public.





Rego uncovers potential mess at FRHA Posted by on

Local 1305 member Dan Rego, who is a NERCC Organizer and Fall River City Councilor, is shaking things up in the Southeastern Massachusetts city. A few weeks ago, he raised concerns over issues with work being done by the Fall River Housing Authority. Since then, the sparks have started flying.

Rego spoke at a Housing Authority meeting and reported on conversations he had with workers on several FRHA projects in the city, some of which were receiving federal funding. Several workers had reported being misclassified as independent contractors, not being paid the legally mandated prevailing wage or not being paid at all. Rego told the Board that he had referred all of the allegations and evidence to proper state authorities.

 The Housing Authority went into immediate executive session, during which they appointed their own independent investigator. The story quickly hit the Fall River Herald News. The paper then followed up with a vicious attack on Rego, questioning not only his motives, but actions by Rego and the union in the past to protect industry standards. This in a city where legal violations on public construction projects are not unheard of.

This week, Rego spoke out in his own defense in the paper, reminding readers that his knowledge of and experience in the construction industry are a benefit to the city and its residents.

Please take a moment to read Rego's "Letter to the Editor" and consider weighing in with a respectful comment on the Herald News site.

 





Northeast Interiors ordered to pay $30k+ for violations Posted by on

Braintree, Massachusetts-based Northeast Interiors has been ordered by the state to pay $20,000 in fines and make restitution of almost $16,000 to twelve employees. The company cheated workers on three projects in Arlington, Swampscott and Salem.

Civil citations were issued against Northeast Interiors and owner Kevin Fish for failure to pay prevailing wages for work performed ($5,000), failure to submit true and accurate certified payroll records ($7,500) and failure to keep true and accurate payroll records ($7,500). Violations occured when the company was doing work at Arlington Menotomy Manner, Swampscott Thomson Building and Salem Rainbow Terrace.

The case was handled by the Fair Labor Division of the Office of Attorney General Martha Coakley. Workers who feel their employer has paid them less than what they are owed, in violation of previaling wage laws or other wage and hour laws (ie, overtime) may contact the New England Regional Council of Carpenters for assitance or may file a complaint directly with the Attorney General's Office using this page.





Stop work orders issued at Harbor Point, media depicts industry mess Posted by on

The Connecticut Department of Labor's Wages & Workplace Standards Division, has issued "Stop Work Orders" against eight contractors working on the Harbor Point project in Stamford, continuing a string of bad practices and bad press for the city and the project's developer, Carl Kuehner's Building and Land Technology (BLT).

The Stamford Advocate has run a significant story on the orders, as well as an excellent piece detailing the Department of Labor's efforts to confront extensive problems in the construction industry. Both are well worth reading and sharing.

Avilik Inc., Flagg World, M&M Construction, Pillar Construction, T.F. Andrews, Brothers Contracting, Continental Tile and Kitchen Classics were the companies cited for various violations of wage, hour, insurance or tax laws by the Department of Labor's Stop Fraud Unit. None of the companies are based in Connecticut. Some are only as close as New York, some have come from as far away as Maryland, according to the Advocate.

Three of those companies--Brothers Contracting, Continental Tile and Kitchen Classics--are being charged with violating a previous stop work order by going back to work without clearence by the DOL.

The project has come under intense criticism in Stamford, where citizens feel the developer and oher companies based in Harbor Point has been given too much control with little or no oversight. Union carpenters have started an online petition calling for Stamford Mayor Michael Pavia to step in and give residents more of a voice. Please read and consider signing the petition here.





Durham Carpenters to be paid Posted by on

Carpenters who were cheated of tens of thousands of dollars in wages reached a settlement with Capstone Development and Cottage Builders yesterday to receive their pay. The companies are the owners and developers of the “Cottage of Durham,” an upscale housing project where the carpenters were employed. It will serve students attending the University of New Hampshire.

The carpenters solicited help in getting their pay after their employer, Builders Construction Services of Alabama, refused to pay them and then fired them and evicted them from company-provided housing when they asked for their wages.

The Carpenters union and local church, student and community groups supported the carpenters, holding a high profile march and demonstration last week. The event garnered significant local and regional media attention (link) that put Capstone under a public spotlight and raised questions about other troubles the Alabama-based company has had with college housing projects, including one in Connecticut.

“We’re happy that these carpenters are finally going to be paid,” said Joe Donahue a representative of the Carpenters Union in New Hampshire. “Wage theft is a real problem in the construction industry right now. It drives down industry standards and drives qualified people out of the industry. Capstone and other developers and general contractors need to be held accountable for the subcontractors they hire. They should implement better controls and have severe penalties for members of their building teams who break the law.”
 

 





Carpenters to support unpaid workers in Durham Posted by on

Union carpenters will join with church, student and community groups to hold a news conference today at 3pm at the Community Church of Durham (NH) at 17 Main Street to release information about serious violations of state and federal law--including non-payment of wages--at the "Cottages of Durham." The "Cottages of Durham" is a new student housing development for students of the University of New Hampshire. It is being developed by Capstone Development/The Cottages of Durham.

Please read this and consider visiting the Cottages of Durham Facebook page and politely ask them to do right by these workers.

Construction workers at the Cottages of Durham describe multiple and flagrant violations of state and federal labor law.

These workers say that they worked long hours for many weeks without pay. When they complained about nonpayment of their wages, they were terminated and evicted from their housing.

Union carpenters stand in solidarity with these exploited workers and demand that Cottages of Durham/Capstone Development promptly pay these workers what they are owed in wages and overtime.





Pulte subs ordered to pay more than $500k Posted by on

Multiple enforcement agencies in Massachusetts today announced that five subcontractors employed by Pulte on sites in Eastern Massachusetts have been ordered to pay workers more than $400,000 in owed wages and make payments totaling $141,000 to cover unpaid taxes.

The order is the result of investigations that began after workers complained to Representatives of the New England Regional Council of Carpenters that they had been unpaid for extended periods of time. Workers went on strike at several Pulte locations and filed complaints with the state.

"The investigation fined five separate subcontractors, but the real culprit is Pulte Homes, a multi-billion dollar national homebuilder," said Mark Erlich, Executive Secretary-Treasurer of the New England Regional Council of Carpenters. "Those subs are interchangeable and were just doing Pulte's bidding. Cheating is Pulte's business model and, unfortunately, that approach is far too common in the residential construction industry."

Subcontractors that were part of the order include:
--AM Construction Services and its President, Adimar Demoura, age 32 of Framingham, allegedly failed to pay four workers a total of $15,331.50 for framing work done on private residential projects in Braintree and Plymouth. They were also fined $22,500 in penalties.
--Five Stars Construction and its President, Alexandre Miranda, age 40 of Trumbull, Connecticut, allegedly failed to pay two workers a total of $30,700 for framing work done on a private condominium project in Natick. They were also fined $30,000 in penalties.
--Nunes Brothers Construction and its President, Tiago Aguiar M. Nunes, age 28 of Brooklyn, New York, allegedly failed to pay 23 workers a total of $99,086.75 for framing work done on private condominium and single-family homes projects in Braintree, Plymouth, Natick, and Northbridge. They were also fined $112,500 in penalties.
--Seven Seas Group and its President, Jackson Croscup, age 55 of Fall River, allegedly failed to pay five workers a total of $10,333 for framing work done on a private condominium project in Natick. They were also fined $20,075 in penalties.
--Two Brothers Construction and its President, Wellington DeLima Borges, age 41 of East Natick, allegedly failed to pay six workers a total of $34,751.50 for framing work done on a private home development project in Plymouth. They were also fined $34,500 in penalties.

Investigating the complaints were Attorney General Martha Coakley’s Office (AGO), the Executive Office of Labor and Workforce Development (EOLWD), and the Joint Enforcement Task Force on the Underground Economy and Employee Misclassification (JTF). The JTF was established by Governor Deval Patrick through Executive Order #499 in March 2008 to coordinate multiple state agencies’ efforts to stamp out fraudulent employment activities by enforcing the state’s labor, licensing, and tax laws.

“All workers in the Commonwealth deserve to be paid for the wages they have earned, including their overtime,” said Attorney General Coakley. “We will continue to work together and take appropriate action to stop these unlawful business practices, level the playing field for companies and protect workers.”

“The Commonwealth is committed to insuring that all businesses carry both workers’ compensation and unemployment insurance coverage,” said Secretary of Labor and Workforce Development Joanne F. Goldstein. “We will not tolerate employers or developers who proceed without this coverage, which puts employees at risk and employers who play by the rules at a competitive disadvantage. The Joint Task Force will continue to take all necessary action to protect legitimate employers, employees and the taxpayers of the Commonwealth.”





Carpenters protest at Chelsea Piers Posted by on

Union Carpenters in the Stamford, Connecticut area turned out in force yesterday to call public attention to problems at Chelsea Piers, where a worker was blown off a 50-foot unfinished roof in October. The worker, Javier Salinas, was not wearing a harness or other safety equipment when a strong wind blew him off, causing multiple blunt force trauma, causing his death. The accident was completely and easily preventable and Salinas' death was tragic and needless.

AP Construction hired American Building Group, for whom Salinas and two of his brothers were working. Following the accident, American Building Group and two other subcontractors on the site were issued "Stop Work Orders" for misclassifying workers as independent contractors or nonpayment of wages. American Buidling Group promised to make a donation for Salinas' funeral, but reneged.Sadly, two of the workers owed money were Javier Salinas' brothers, who were owed more than $6,000.They wre going to use that money to provide a decent burial for Javier.

The Stamford Advocate covered the protest, quoting union members.

Chris Bachant, a union carpenter from Waterford, stood near the McDonald's parking lot and held a large sign addressed to AP Construction that questioned whether the company "manages" profits or safety.

"It doesn't matter to me whether someone is non-union or union," he said. "I don't want to see someone get hurt."

Ted Duarte, a union organizer at the New England Regional Council of Carpenters, said the unethical and illegal methods used by some contractors to shave operating costs end up hurting licensed, unionized construction workers, who must undergo safety training and keep up their certifications. The practices undercut local contractors, he said.

"If you play by the rules, you're not playing on a level playing field," Duarte said.