News

Albany Contractor Defrauds Minority-Owned Businesses in $800K Scheme

Contractor in Albany has pleaded guilty to defrauding minority-owned businesses in an $800,000 scheme.  He is expected to receive a sentence of 3 1/2 to 12 years in state prison and has agreed to pay back the $800,000.  Contractor and his partner were first arrested in July for fraudulently obtaining millions of dollars in public works projects, failing to pay more than 50 laborers $6 per hour in pension funds as part of their prevailing wages, issuing false pay stubs, and submitting false certified payrolls.

See here for more information: https://www.timesunion.com/news/article/Albany-general-contractor-pleads-guilty-to-800K-13303451.php.

Hurricane Michael’s Impact on Transportation and Public Works

In the wake of Hurricane Michael, the Florida Department of Transportation (FDOT) is currently preparing roadways for impacts from the hurricane and has suspended all construction operations from the roadways.

See here for more information:  https://www.mypanhandle.com/news/florida-hurricane-michael-update/1507518600

 

U.S. Recovers $14.3 Million for Hurricane Recovery Workers

The U.S. Department of Labor’s Wage and Hour Division (WHD) has recovered $14,337,657 in unpaid wages for 7,761 employees engaged in hurricane recovery work in Puerto Rico and the U.S. Virgin Islands.  This came as a result of the WHD's investigations in the last year that focused on employers' compliance with the Service Contract Act (SCA), Contract Work Hours and Safety Standards Act (CWHSSA), Davis Bacon and Related Acts (DBRA), and the Fair Labor Standards Act (FLSA).  The WHD has also spearheaded outreach activities to educate employers and employees about their rights under federal laws.

See here for more information: https://stjohnsource.com/2018/09/25/u-s-department-of-labor-recovers-14-3-million-for-hurricane-recovery-workers/

 

 

New Jersey Revising Penalties Under Prevailing Wage Act

Bill A-1852 was passed by the New Jersey Assembly Labor Committee on September 17, 2018.  Under the bill, upon conviction of a first or second violation under the Prevailing Wage Act, an employer would be guilty of a disorderly persons offense.  Upon conviction of a third or subsequent offense, an employer would be guilty of a crime of the fourth degree.

See here for more information: https://www.monroenow.com/business/bill-protecting-minimum-wage-workers-clears-nj-labor-committee/article_d7a151bc-bb4b-11e8-96a0-b754bfc4591d.html

Portland Looking to Add Prevailing Wage Requirement

Portland Mayor Ethan Strimling is proposing a requirement that will require contractors who are awarded jobs of $50,000 or more for public roads or buildings to pay prevailing wages and provide apprenticeship programs.  The proposal will be presented on September 12 at the City Council Finance Committee workshop.

See here for more information: http://www.theforecaster.net/portland-mayor-hopes-to-add-prevailing-wage-requirement/

Contractor Charged for Falsifying CPRs on La Guardia Airport Project

In New York, a contractor has been arrested for allegedly submitting false certified payrolls on a project at La Guardia Aiport, which resulted in 28 construction workers being underpaid by $40,000. If convicted, the contractor can face up to 4 years in prison, prohibition from performing public works for 5 years, and payment of the back wages to his employees.

See here for more information: http://theforumnewsgroup.com/2018/08/23/laguardia-airport-contractor-charged-with-prevailing-wage-theft/

Ninth Circuit Upholds California’s SB 954 Requiring Public Works Employers to Obtain Employee Collective Consent before Contributing to Anti-Union IAFs

Interpipe Contracting, Inc. and the Associated Builders and Contractors of California Cooperation Committee, Inc. challenged SB 954, which amended the Labor Code to clarify that employers may take a wage credit to support their prevailing wage contributions to third-party industry advancement funds ("IAFs") only if their employees consented to doing so through a collective bargaining agreement, on the alleged basis that the statute was unconstitutional.
On July 30, the Ninth Circuit Court of Appeal disagreed and upheld SB 954.

See here for more information: https://www.jdsupra.com/legalnews/9th-circuit-closes-the-door-on-open-98477/

ABC Test Makes Misclassification a Bigger Risk

California recently adopted the "ABC Test" for business owners to use in order to prove that a worker is an independent contractor and not an employee. It is also being used in some capacity in other states. The ABC Test makes it harder to classify workers as independent contractors, and therefore, misclassification claims will likely be on the rise.

See here for more information: https://www.forbes.com/sites/mikekappel/2018/08/08/the-end-of-an-era-how-the-abc-test-could-affect-your-use-of-independent-contractors/#7d3b41ad1f66

Construction Company in New York Indicted for Wage Theft and Insurance Fraud

A construction company in New York has been charged in the State Supreme Court with an indictment. Among the charges is for misclassifying workers as lesser-skilled in order to pay them less than the prevailing wage rate. The indictment follows a joint investigation led by the Manhattan District Attorney’s Office’s Construction Fraud Task Force and the New York City Department of Investigation.

See here for more information: https://www.insurancejournal.com/news/east/2018/07/26/496139.htm

Missouri Amends Prevailing Wage Law

A bill repealing part of Missouri's prevailing wage law will go into effect on August 28, 2018. As part of the change, prevailing wage rates won't be paid on projects costing $75,000 or less.

See here for more information: https://www.constructiondive.com/news/missouri-amends-prevailing-wage-law/528217/

General Contractor Pays $1.1 Million in Prevailing Wage Settlement on Long Beach High School Project

California Labor Commissioner found that a total of 103 workers weren’t paid prevailing wage and fringe benefits by their employer, Newport Beach-based Champion Construction, Inc., a subcontractor on the construction project of Browning High School in Long Beach. Under California’s prevailing wage laws, general contractor TB Penick is held jointly liable for the violations of its subcontractors. Accordingly, it was the general contractor that entered into a settlement agreement to pay $1.18 million of the penalties and wages owed.

See here for more information: https://www.presstelegram.com/2018/07/09/construction-workers-receive-1-1m-payout-in-wage-theft-case/

General Contractors in California and Maryland Liable for Subcontractors’ Wage and Hour Violations

California and Maryland state laws hold general contractors directly liable for subcontractors’ failure to observe wage and hour requirements for their employees on construction projects. While there have been similar provisions in the federal Davis-Bacon Act and other state prevailing wage laws, those laws have been limited to publicly funded construction projects. The new laws in California and Maryland also applies to private construction projects performed in the state--thus significantly expanding the scope of potential liability. California's law is already in effect, and Maryland's law will take effect this October.

See here for more information: https://www.lexology.com/library/detail.aspx?g=7f470e4b-58d7-4964-b8b8-6f1695bc23e6

US Supreme Court Issues Big Decision Impacting Unions

On June 27, 2018, the U.S. Supreme Court struck down an Illinois law that required non-union workers to pay fees that go to collective bargaining and overturned a 1977 law that required employees to pay so-called "fair share" fees. It is believed that the ruling that could cripple public-sector unions.

See here for more information: https://www.cnn.com/2018/06/27/politics/supreme-court-union-fees-decision/index.html

New York Contractor Barred from City Contracts for Next Five Years Due to Prevailing Wage Violation

A construction company in New York was found to have underpaid their workers; and in some cases, it more than $50 an hour below the prevailing wage rate. As part of the plea deal, the contractor is barred from taking on city contracts for the next five years, and forked over the $303,410.97 in restitution.

See here for more information: https://nypost.com/2018/06/18/crooked-company-pays-out-lost-wages-to-workers-some-undocumented/

Prevailing Wage Law Repealed in Michigan

On June 6, 2018, the Michigan Legislature repealed the state’s decades-old prevailing wage law. The repeal will go into effect immediately without the need for a signature from Governor Rick Snyder (who opposed the measure) because it was initiated through a ballot drive.

See here for more information: https://www.freep.com/story/news/2018/06/06/prevailing-wage-repealed-gop-michigan-legislature/678292002/

Prevailing Wages Based on Survey Wage Data from the 1980s in Some Jurisdictions

According to publicly available data from the Department of Labor's Wage and Hour Division, the agency is relying on outdated wage survey data in some jurisdictions. Using data from the 1980s means that wages are lower than what would truly be "prevailing" during today's economic times.

Former Wage and Hour Division head David Weil said that the Labor Department is in a difficult position given the length and complexity of the surveying process and the limited resources available to execute it.

See here for more information: https://www.bloomberg.com/news/articles/2018-05-25/these-u-s-workers-are-being-paid-like-it-s-the-1980s

Task Force on Apprenticeship Expansion Outlines Strategies

The Task Force on Apprenticeship Expansion presented a report to President Trump outlining recommendations on growing the apprenticeship program across different industries. One of the recommendations was a pilot project focusing on mastery and competency. However, please note that participants for the pilot project from the construction industry would not be considered as apprentices for the purposes of meeting Davis-Bacon requirements, and therefore would not be subject to the wage requirements under that.

See here for more information: http://www.concreteproducts.com/news/11083-federal-agencies-industry-officials-sketch-apprenticeship-expansion-roadmap.html#.WwSwJH8h3IU

Michigan Supreme Court Puts Prevailing Wage Repeal Vote on Hold

The Michigan Supreme Court issued a stay that suspended a lower court order which would have certified a petition to repeal the State's prevailing wage law. The unions say the petition campaign broke the rules by including residential addresses in places where people don’t live.

See here for more information: https://www.detroitnews.com/story/news/politics/2018/05/15/michigan-supreme-court-prevailing-wage-hold/34946201/

New Jersey Task Force to Examine Misclassification in Construction Industry

New Jersey Governor Phil Murphy signed an Executive Order which authorizes a task force to examine the issue of worker misclassification. The review is specifically focusing on the construction industry. When employees are misclassified as independent contractors, those workers lose legal rights and employment benefits. The State may also be cheated out of payroll taxes.

See here for more information: https://www.jdsupra.com/legalnews/n-j-governor-orders-fresh-focus-on-58366/

Contractor to Pay $1.5 Million Settlement Over Claims of Prevailing Wage Violations

Construction company in Burlington County, New Jersey will be paying $1.5 million as part of a settlement over allegations that they routinely entered into construction contracts with state and federal agencies and lied about how much they were paying their employees. Former employee alleged that they falsified their payrolls to show that they were in compliance with prevailing wage law.

See here for more information: https://patch.com/new-jersey/moorestown/south-jersey-company-settles-false-wage-lawsuit-1-5-million

Measure to Repeal Michigan’s Prevailing Wage Law Advances to State Legislature

After an initial controversy involving the legitimacy of some signatures on a petition to repeal Michigan's prevailing wage law, the Bureau of Elections has now confirmed that there are in fact enough signatures and is therefore recommending approval of the petition. This will advance the measure to the state legislature.

See here for more information: https://www.detroitnews.com/story/news/politics/2018/04/23/michigan-prevailing-wage-pot-petitions/34177855/

Governor of Rhode Island Supports Prevailing Wage

Rhode Island Governor Gina Raimondo, who is running for another term, told the Building Trades unions that she supports prevailing wage law. She has a $1 billion plan to replace and rebuild the public schools and said, "When we rebuild our schools, when we rebuild our roads and when we add to our skyline in Rhode Island, we're going to protect the prevailing wage."

See here for more information: https://patch.com/rhode-island/johnston/raimondo-speaks-construction-unions-supports-prevailing-wage

Prime Contractor Pays Back Wages on Behalf of Subcontractor for Project in San Diego

The prime contractor on a couple of federally funded projects for the Marine Corps has reached a settlement with the U.S. Department of Labor to repay over $50,000 in back wages to its subcontractor's workers. The subcontractor failed to pay prevailing wages on the job and has since declared bankruptcy. The prime contractor is responsible for the compliance of subcontractors.

See here for more information: http://www.sandiegouniontribune.com/military/sd-me-back-wages-20180328-story.html

Illinois Company Seeking Exemption from New Prevailing Wage Requirements for 5 Townships in Cook County

Private company in Illinois is working with local city councils and village boards to ask that the Cook County Board exempt five of the county's 30 townships (Bloom, Bremen, Calumet, Rich and Thornton) from new prevailing wage requirements that are set to take effect in September. Company alleges that the new requirements would cripple private investment.

See here for more information: http://www.chicagotribune.com/suburbs/daily-southtown/opinion/ct-sta-slowik-prevailing-wage-st-0328-20180327-story.html

Union Leaders Seeking Broader Definition of “Public Works” in New York

Union leaders are pushing for a clear and broad definition of "public works" in New York so that projects funded with both private and public funds are still required to comply with prevailing wage law.

See here for more information: https://www.usnews.com/news/best-states/new-york/articles/2018-03-14/construction-unions-seek-ny-prevailing-wage-loophole-fix

Labor Leader Accuses Contractor of Prevailing Wage Violation in Illinois

Local labor union leader in Illinois has accused City Water, Light and Power of using a general contractor, ICD Ironhorse, that was violating prevailing wage laws on a project to demolish a former Days Inn. Contractor only claimed three people on its certified payroll, but had actually hired more than twenty people and paid them in cash.

See here for more information: http://www.sj-r.com/news/20180319/labor-leader-accuses-city-contractor-of-not-paying-prevailing-wage

Missouri House Passes Bill to Repeal Prevailing Wage

On Tuesday, March 13, the Missouri House voted 89-62 (largely along party lines) to repeal the State's prevailing wage law. The bill will now be sent to the Senate.

See here for more information: https://www.usnews.com/news/best-states/missouri/articles/2018-03-13/missouri-house-votes-to-repeal-missouris-prevailing-wage

Missouri House Considers Repealing Prevailing Wage Law

The Missouri House approved a proposal earlier this week to repeal the State's prevailing wage law. The proposal was led by GOP leaders on the grounds that they will lower project costs. However, as seen in a recent Indiana study, it may lead to lower wages and growth. The bill still needs to be voted on again before being sent to the Senate.

See here for more information: http://www.stltoday.com/news/local/govt-and-politics/missouri-house-endorses-repeal-of-prevailing-wage-law/article_1a0c57ea-431c-5b46-beb5-3646ffec70c6.html

Oregon’s House of Representatives Passes Construction Wage Protection Bill

Oregon's House of Representatives just passed a bill that would require general contractors to pay past due wages and benefits owed to their subcontractors' employees if a valid claim is filed with the Bureau and the general contractor has not already paid the subcontractor in full. This bill is similar to one recently passed in California. The bill will now be reviewed by the Senate.

See here for more information:https://www.constructiondive.com/news/oregon-house-passes-construction-wage-protection-measures/518113/

Lawsuit Filed to Recover $200,000 in Wages and Taxes on California Construction Project

The Orange County district attorney's office filed a lawsuit against a group of building companies, alleging that they failed to pay $200,000 in prevailing wages, failed to accurately report overtime hours, created false entries on weekly payroll reports, and submitted three forged apprenticeship certificates, on a construction project at the Pacific Amphitheatre in Costa Mesa.

See here for more information: http://www.latimes.com/socal/daily-pilot/news/tn-dpt-me-awi-builders-lawsuit-20180221-story.html

Research Shows Indiana’s Repeal of Prevailing Wage Law Did Not Result in Taxpayer Savings

Some representatives in Ohio are seeking the repeal of the State's prevailing wage law. But research from the Midwest Economic Policy Institute found that Indiana's repeal of the law a few years ago actually had a negative effect on wages, growth, and other factors.

See here for more information: https://www.prnewswire.com/news-releases/new-data-on-prevailing-wage-repeal-shows-shrinking-wages-no-savings-on-construction-projects-300591876.html

Ninth Circuit Court Heard Arguments on California’s Prevailing Wage Law

Non-unionized construction groups appealed the dismissal of their case against the Attorney General, Labor Commissioner, and DIR Director, which challenged the constitutionality of an amendment to the State's wage law. SB 954 allows employers who make payments to an "industry advancement fund" required by a CBA to receive prevailing wage credit, but employers who pay into industry advancement funds that are not required by a CBA do not receive the credit. The basis of the challenge is that industry groups in the second group who are raising funds to get their message out are not having their First Amendment rights protected. The Court of Appeal just heard oral argument earlier this week, but no decision has been made yet.

See here for more information: https://www.courthousenews.com/ninth-circuit-considers-challenge-to-prevailing-wage-law/.

Complaint Filed Against Federal Contractor for Misclassification

A complaint has been filed with the Department of Labor against federal contractor General Dynamics Information Technology for misclassifying their call center workers.  This has allegedly resulted in $100 million in back wages.  The complaint was brought by the union, Communications Workers of America.

See here for more information: https://www.nytimes.com/2018/01/30/us/politics/medicare-call-centers-wages.html

Bill Proposed to Make Ohio a “Right to Work” State

Two Republican representatives are proposing a bill for the November 2020 ballot that would allow voters to decide whether Ohio should be a Right to Work state and eliminate the prevailing wage.  It would put limitations on unions for collecting certain dues.  A Democratic representative says a very similar bill was already rejected five years ago.

See here for more information:  http://wcbe.org/post/lawmakers-propose-making-ohio-right-work-state-eliminating-prevaling-wage-law

 

 

 

Prevailing Wage Dispute Delays Construction in Las Vegas

Two formal complaints with the Labor Commission were filed alleging that workers have been misclassified and underpaid on a project to install steel posts along Las Vegas Boulevard.  Funding for the project was scheduled to be approved on January 16, but voting has been delayed until February 6 so that the wage dispute could be resolved.

See here for more information: https://lasvegassun.com/news/2018/jan/16/questions-over-wages-delay-strip-bollard-project/

 

 

NY Contractor To Be Sentenced to 5-Year Probation and Forfeiture of $2.5 Million for Prevailing Wage Violation

An electrical construction company was found guilty of grand larceny for failing to pay prevailing wages on public works projects financed by the New York City School Construction Authority and other agencies in New York. Company will be debarred from public works for five years and will forfeit $2.5 million ($700,000 of which will be distributed to five employees). Official sentencing is scheduled for March 28, 2018.

See here for more information: http://www.ecmweb.com/construction/electrical-contractor-found-guilty-underpaying-workers

(*New York City School Construction Authority uses the eComply labor compliance software to track and manage certified payrolls.)

Delaware Looking to Revise Prevailing Wage Law

The GOP has introduced legislation to amend Delaware's prevailing wage law so that required rates of pay would be based on payroll information (instead of employer surveys) provided to the Department of Labor.

See here for more information: http://www.ledger-enquirer.com/news/business/article193788564.html

New York Passes Reciprocal Debarment Law on Davis-Bacon Violations

Beginning in March 2018, contractors who are debarred by the U.S. Department of Labor for violations of the Davis-Bacon Act will not be able to work on New York State public works projects. The legislation was signed into law by Governor Andrew Cuomo on December 18.

See here for more information: https://globenewswire.com/news-release/2017/12/22/1270185/0/en/New-York-State-Reciprocal-Debarment-Legislation-Signed-into-Law-by-Governor-Cuomo.html

Petition Launched to Protect Current Prevailing Wage Laws in Michigan

To counteract a prevailing wage repeal proposal that was submitted to the state last month, supporters of Michigan's current prevailing wage law are collecting signatures for their own petition to submit for the 2018 ballot.  Because prevailing wage repeal appears to be popular among the Republican leadership in the legislature, construction and trade unions believe this effort is important to protect their workers.

See here for more information:
http://www.mlive.com/news/index.ssf/2017/12/pro-prevailing_wage_ballot_pet.html

New York’s Business Council Seeks Reform on Prevailing Wage Law

New York business groups are calling on the state to reform its prevailing wage law in order to reduce increasing project costs.  However, they will likely meet with resistance from the Governor and Democratic Assembly.

See here for more information: http://www.nydailynews.com/news/politics/business-groups-pushing-costly-wage-law-article-1.3706108

New York Cracks Down on Construction Wage Theft

New York collected more than $2.5 million in unpaid wages from construction companies who either issued bad checks or failed to pay the prevailing wage.  Over 400 construction workers were impacted.

See here for more information: https://www.nytimes.com/2017/12/06/nyregion/new-york-construction-wage-theft.html

 

 

New Prevailing Wage Law in Portland

The City of Portland will require contractors working on new developments that receive tax breaks to pay their employees a prevailing wage.  However, they will not be required to participate in the state or federal apprenticeship programs.

 

Click here for more information: http://www.pressherald.com/2017/11/20/portland-council-votes-to-require-prevailing-wage-for-workers-building-developments-that-get-tax-breaks

ABOUT ME
Photo: Lynn Hang
Lynn Hang

Lynn Hang has more than ten years of legal and business experience, including expertise in labor and compliance issues. As the General Counsel and Vice President of Business Affairs for eComply Solutions, Lynn’s current practice includes a critical understanding of Davis-Bacon regulations, state prevailing wage laws, and general contract compliance principles.

Prior to joining eComply Solutions, Lynn spent five years at Hill International, Inc. as the Director of Business Affairs, where she helped grow Hill’s labor compliance business and learned about the complexities of the construction industry from one of the premier construction management firms in the country. Before Hill, Lynn spent six years as an employment litigation associate at Gibson, Dunn & Crutcher. At Gibson, Lynn handled a broad range of employment matters in state and federal court, argued cases before the California Superior Court and Ninth Circuit Court of Appeal, litigated and participated in mediations and negotiated favorable settlements before the Labor Commissioner.

Lynn has a law degree from the University of California, Los Angeles (UCLA) and a business degree from the University of California, Berkeley.

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