On Tuesday, August 8 the Biden Administration's US Department of Labor (USDOL) announced finalized rules updating the Davis-Bacon and Related Act (DBRA) regulations. These adopted reforms to federally funded construction projects are as significant as they were overdue; this is the first significant DBRA reform in over 40 years.
These reforms will make it that much harder for low-road contractors to use wage theft as a business model to gain a competitive advantage in the public construction marketplace. These regulatory Davis-Bacon updates will meaningfully challenge the status quo which all too frequently fails to safeguard construction workers against financial exploitation.
This policy movement occurs as federal infrastructure dollars are beginning to provide investments in major construction projects across the country, and will be crucial in protecting the rights of workers on those jobsites.
Some highlights of these new regulations include:
Better reflects local wages by reestablishing the original, intended definition of prevailing wage.
• Providing broader authority to adopt state or local wage determinations when appropriate.
• Periodic wage rate updates of out-of-date wage determinations.
• Wage rates increase across life of projects, not locked in at original year's rates.
• Closed loophole where prevailing wages were unenforceable if rates were accidentally leftout of contract documents.
• Standardized debarment procedures across all Davis-Bacon and Related Acts.
• New anti-retaliation protections for whistleblowing workers.
• Enhanced cross-withholding empowers USDOL to recover back wages owed to workers as longas contractor has ongoing federal work.
• Formalizes requirement that Davis Bacon back wages owed to workers compounds interest.
The NYFFC applauds the USDOL on the creation of these new rules and regulations and looks forward to their implementation in the ongoing effort to “level the playing field” on federally funded construction.
A full summary of the updated rules is available on the USDOL Wage and Hour Division website.
The New York Foundation for Fair Contracting
STRONGLY SUPPORTS S5868A(HARCKHAM) | A7491(Bronson)
“An act to amend the environmental conservation law, in relation to imposing certain brownfield remediation site work requirements to be eligible for the tangible property tax credit associated with brownfield redevelopment.”
Legislation to require prevailing wage standards for brownfield remediation site work is a commonsense solution to promote family-sustaining wages, a skilled workforce,and safe jobsites.
Safe jobsites are of particular concern on brownfield remediation projects where the Occupational Safety and Health Administration (OSHA) recognizes the additional chemical exposure hazards faced by clean-up workers. OSHA identifies that excavation of “environmentally contaminated material for treatment or disposal … will usually result in the highest chemical exposure to employees, and require the most physical activity, equipment, and planning.”
New York State’s existing Labor Law Section 220 public work prevailing wage standards promote safe construction job sites. Prevailing wages have been shown to translate to fewer workplace accidents and injuries, while construction work lacking wage standards features higher rates of occupational injury.
Academic literature indicates that prevailing wage standards correspond with overall safer job sites. By attracting companies that invest in their workforce (through honest wages, proper training, and jobsite safety practices) and disincentivizing firms which cut corners as a business model (be it wages or worker safety), prevailing wages can help ensure quality brownfield remediation work.
For all these reasons, the New York Foundation for Fair Contracting STRONGLY SUPPORTSS5868A/A7491, legislation to make lucrative property tax credits for brownfield remediation conditional on the payment of prevailing wages.
The NYFFC is a not-for-profit organization established to “level the playing field” in the construction industry for the benefit of workers, taxpayers, and responsible contractors.
If you have any questions, please contact Brandon Montanye at email@example.com.
The Institute for Construction Economics Research (ICERES) released a new report on January 17, 2023, at the North America's Building Trades Union (NABTU) Opportunity Pipeline Forum in Washington, D.C.. The report, "Diversity, Equity, and Inclusion Initiatives in the Construction Trades," sought to examine the efficacy and impact of ongoing efforts in the construction industry to promote workforce diversity - both in the union and non-union world.
The authors of the report highlight the strengths of building trades unions’ initiatives on this front. Amy Tracy Wells of Rutgers University comments within, “Many union programs to improve diversity in the trades feature substantial partnerships with community-based organizations, industry leaders, and government agencies. Community organizations are particularly important in helping…support interested workers from historically underrepresented groups.”
The report shows a willingness to interface and partner with a range of outside organizations, which enables union programs to not only recruit, but to retain and graduate apprentices from minority groups at a higher rate than non-union programs. The authors succinctly address this point: “the authors highlight that current DEI practices in the non-union sector are best characterized as ‘efforts, not programs.’” This lack of formalized development on “DEI” initiatives within non-union programs places it at a stark disadvantage to union-sponsored programs, the authors conclude.
The NYFFC recognizes that union apprenticeship programs promote not only a thorough education, but also fair treatment to all – allowing New York State to be built better, safer, and smarter.
The New York Foundation for Fair Contracting is a watchdog non-profit established to “level the playing field” in public works construction for the benefit of taxpayers, upstanding contractors, and workers.
Mission Statement / Background: The New York Foundation for Fair Contracting (“NYFFC”) is a labor-management non-profit with a mission to “level the playing field” in public works construction for the benefit of workers, responsible contractors, and taxpayers.
Job Summary:The Construction Analyst is an integral member of the NYFFC team. The Analyst supports the work of the NYFFC by monitoring the local public construction marketplace for compliance with prevailing wage and responsible contracting standards. The Analyst reports to the Director and the NYFFC Board. This position will provide critical operations and administrative support to NYFFC staff and partners.
• Assist disaffected workers in recovering unpaid wages and benefits.
• Analyze payroll documents and contractor records to evaluate compliance with prevailing wage laws and• other rules governing construction contracts.
• Liaise with government officials to advance responsible contracting standards and pursue enforcement action• for violations of such.
• Track public works construction project data.
• Conduct industry and market research: Research and monitor important changes and developments in the• New York construction industry.
• Translate project requirements into milestones, budgets and assignments.
• Passion for issues of importance to working people.
• Excellent people skills and interest in relationship building with a variety of people and institutions.
• Strong written and verbal communication skills.
• Digital literacy with ability to adopt new systems and platforms as needed.
• Self-driven and curious with strong organizational skills.
• Knowledge of New York State and federal labor laws pertaining to the construction industry a plus.
• Familiarity with the construction industry, the legislative process, and database systems a plus.
• Position involves local travel. Must have reliable transportation.
• Minimum Experience: A bachelor’s degree + 3-5 years of experience, a master’s degree + 2-3 years of experience, or a minimum of six or more years of continued professional growth in a demanding non-profit or government setting.
Hours: Full time, Monday through Friday. Flexible scheduling available. Position involves hybrid work and some periodic in-state and out-of-state travel.
Salary: $60,000 a year. Benefits include health insurance, pension, and paid time off.
Interested persons may submit a resume or CV, cover letter, and list of references to firstname.lastname@example.org by March 1, 2023.
The NYFFC is an Equal Opportunity Employer. Hiring decisions are made based upon a candidate’s qualifications for the position. We are committed to an inclusive workplace free of discrimination.
Buffalo, NY – On Thursday, the Erie County Legislature voted to update the 2009 Lowest Responsible Bidder Law, reaffirming the County’s standing as a leader in responsible contracting. The law provides tools to ensure contractors bidding on County-owned construction projects have the capability, performance record, and business integrity to justify the award of taxpayer dollars and can successfully perform the work. The New York Foundation for Fair Contracting (NYFFC) applauds County leaders for strengthening the tools so law abiding contractors who deliver high-quality construction have a fair shot at public works contracts.
“All too often in the construction industry, bad actors gain a competitive advantage by cheating their workers or taxpayers,” said NYFFC Director Matt Kent. “Erie County’s common sense rules of the road ensure that cheaters do not prosper off our tax dollars.”
This reform was made possible thanks to the leadership of bill sponsors Legislature Chair April Baskin, Majority Leader Tim Meyers, and Legislator Howard Johnson. The Legislature’s reform package was enhanced through constructive engagement with the Administration of County Executive Mark Poloncarz, as spearheaded by Deputy County Executive Maria Whyte, an author of the 2009 law. Policymakers were aided by Cathy Creighton, also an original author of the 2009 law and now Director of Cornell University’s Buffalo Co-Lab, who provided expert advice and guidance throughout the process.
Erie County has enforced the law to reject a contractor that withheld evidence of its troubling safety record and worker deaths, and a firm that lied about its felony conviction for defrauding the state by having workers collect unemployment while performing contracts. The reform aligns Erie County and state responsible bidder standards, makes technical fixes to ensure due process throughout contract awards, and expands coverage to all County departments that put construction contracts out to bid.
The NYFFC recognizes Erie County as a leader statewide in government contracting accountability and looks forward to approval and implementation. Municipalities across the state should look to Erie County’s example in awarding hard-earned taxpayer dollars only to the lowest responsible bidders. The New York Foundation for Fair Contracting is a watchdog non-profit established to level the playing field in public works construction for the benefit of taxpayers, upstanding contractors, and workers
For Immediate Release
November 24, 2020
Contact: Matt Kent
Buffalo, NY – This week, the New York Foundation for Fair Contracting (NYFFC) celebrated the first-ever enforcement of the City of Buffalo’s Apprenticeship Law. Bidding on a Citywide Roadway Spot Repair project, contractor Amherst Paving was not awarded a contract due to its failure to comply with the Apprenticeship Law – the first firm to face consequences under this law in the fourteen years it has been on the books.
“Over a decade ago, Buffalo made a promise to young workers. This decision puts us on the right path towards keeping it,” said Matt Kent of the NYFFC. “Our community deserves better than to rubberstamp lawbreaking contractors and reward them with our public dollars.” The NYFFC is a watchdog non-profit working to level the playing field in public works construction for the benefit of taxpayers, responsible contractors, and workers.
Strong apprenticeship programs are vital to train the next generation of Buffalo’s construction workforce. The 2006 Apprenticeship Law requires city projects over $100,000 to be performed by contractors with registered apprenticeship programs. To ensure opportunities are actually provided, the law requires apprentices perform at least 10 percent of all hours worked. The Apprenticeship Law also promotes greater workforce development opportunities specifically for city residents and historically excluded minorities and women.
The Common Council ordered a review of Amherst Paving’s compliance after the NYFFC alerted city officials in August of the contractor’s likely apprentice hours violations on its ongoing Buffalo Citywide Mill & Overlay project. Questioned further by Majority Leader David Rivera this week, Public Works Commissioner Mike Finn confirmed the company has been found to provide only half the apprentice hours mandated by law. An open question is the degree to which Amherst Paving will employ apprentices on this project where it is currently in violation, and what conditions need to be met for the City to enforce the law and terminate the contract.
The NYFFC applauds the Common Council for bringing much needed oversight to this situation. With oversight and enforcement, genuine apprenticeship programs can strengthen Buffalo’s construction industry, promote skilled work, and offer local workers a ladder into the middle class. Building on this success, we can provide young workers of WNY real opportunities to earn decent livings while learning valuable trades.
From Michael Gartland for the New York Daily News: A NYC contractor, SAC Restoration, admitted to committing fraud and failing to pay its workers the prevailing wage.
They carried out their bad behavior — “failure to pay prevailing wages, nonpayment or underpayment of wages [and] nonpayment or underpayment or workers’ compensation insurance premium” — from 2014 to 2018, according to court records.
Those workers are owed $122,780. The owners are also required to pay out $32,188 in unpaid workers comp premiums to the New York State Insurance Fund. If they fail to pay in full, they could face up to a year behind bars.
A Maspeth, Queens, steel-fabrication company copped to cheating hundreds workers out of overtime pay and wages, and agreed to pay out more than $6 million owed to welders and ironworkers, according to its plea deal with the state Department of Labor following a joint investigation with the Manhattan District Attorney’s office.
AGL Industries pleaded guilty to third-degree grand larceny and began paying 499 workers the money owed them with a $1.5-million allocation Aug. 13, Manhattan DA Cyrus Vance Jr.’s office said.
The balance will be paid over five years in what is the largest single wage recovery in the DOL’s history.
The company also admitted to reporting fraudulent financial information and will settle through a $260,855 payment to the state’s Unemployment Insurance fund, the DA’s office said. A company official, Dominick Lofaso, also pleaded guilty to a class D felony for grand larceny.
Welders and ironworkers had complained to company officials about underpayment but were essentially told “tough,” according to the DA’s office. They then took their grievances to Ironworkers Local 361, in Ozone Park, and the DA’s office in February 2018. A subsequent joint investigation by the DA’s Construction Fraud Task Force and the DOL revealed that the company withheld overtime and other wages from workers during a roughly four-year period starting in November 2013.
Read the full story at The Chief.
Photo: Elvert Barnes (Flickr)
Hamburg, NY – The New York Foundation for Fair Contracting (NYFFC) submitted the following comment on the U.S. Department of Labor’s proposed rule which threatens to erode quality construction apprenticeship programs:
“The New York Foundation for Fair Contracting (NYFFC) recognizes that robust and well-regulated apprenticeship programs promote a strong construction industry, bolster the middle class, and emphasize skilled work. Strong apprenticeship programs are vital to train the next generation of America’s construction workforce. The NYFFC encourages local, state, and national efforts to build upon these long-established successes.
Unfortunately, this proposal opens the door to imposing ‘Industry Recognized Apprenticeship Programs’ (IRAPs) in the construction industry and would take us in exactly the wrong direction.
As a not-for-profit organization monitoring the public works construction industry, the NYFFC has time and again encountered unscrupulous contractors who skirt the law, infringe on worker rights, and deliver subpar work to taxpayers as a business model. Allowing such irresponsible actors to unilaterally establish unregulated training programs designed to cut corners, lower safety standards, and boost their profits is wholly unacceptable and must be rejected.
The NYFFC is a not-for-profit organization established to level the playing field in public construction for the benefit of taxpayers, workers, and responsible contractors.”
BRONX – Attorney General Letitia James and New York City Comptroller Scott Stringer today announced the sentencings of Vickram Mangru, his wife Gayatri Mangru, and AVM Construction Corp., of Valley Stream, NY, for failing to pay proper prevailing wages to workers related to a publicly-funded New York City construction project.
The defendants were sentenced in Bronx County Supreme Court in front of Justice James A. McCarty. Vickram Mangru will serve 30 days in jail, followed by 3 years of probation, after his felony conviction of Failure to Pay Prevailing Wages and Benefits. Gaytari Mangru was sentenced to a Conditional Discharge as result of her misdemeanor conviction on the same charge. The defendants both pled guilty to the charges on February 11, 2019, and have paid $80,000 in restitution to three workers. The remaining $201,630.09 was subject to an Order of restitution issued by the court.
In addition, all defendants will be prohibited from bidding on or being awarded any public works contract in the State of New York for a period of five (5) years.
“New Yorkers who work on publicly-funded projects deserve to be paid a prevailing wage,” said Attorney General Letitia James. “Employers who underpay their employees, and attempt to evade wage laws have no business in the state of New York. My office will continue to ensure that all New Yorkers – no matter their trade – are paid a fair wage.”
“My office has zero tolerance for unscrupulous, predatory actors who flout the law and cheat workers out of their wages – that’s why we debarred this contractor,” said Comptroller Scott M. Stringer. “The defendant in this case was forbidden from obtaining contracts for public works projects in New York City and State after he was found to be violating our labor laws. We referred this case to the Attorney General’s Office after Mangru created a new company in an attempt to continue operating in New York City, but was allegedly still committing labor violations. There’s no place in New York for these kind of acts, and my office will always fight to break the grip of those who cheat our workers – finger by finger.”
Between December 22, 2012 and February 14, 2015, Vickram Mangru – as owner of Vick Construction and operator of AVM Construction Corp. – failed to pay several of his employees’ proper prevailing wages for construction and repair work on several public schools in the Bronx. State law requires that on certain construction projects designated as “public works,” workers must be paid a pre-determined industry minimum wage per hour, plus a benefit rate, collectively known as a “prevailing wage rate.” Instead of paying this prevailing wage rate, the investigation revealed that Vickram Mangru allegedly paid his workers between $120 and $160/day for 40-50 hours worked per week – an amount far less than what his employees were owed under the prevailing wage rate. To cover up the crime, Vickram Mangru falsified Certified Payroll Records and Reports submitted to the New York City Department of Education by claiming that he did pay workers the proper prevailing wage rate. The New York City Comptroller’s Office previously barred the defendant, Vickram Mangru, from obtaining contracts for public works projects in New York City after he was found to be in violation of labor laws. The Comptroller’s Office referred the case to the Attorney General’s Office after Mangru created a new company in an attempt to continue operating in New York City, but was allegedly still committing labor violations.
The Attorney General thanks New York City Comptroller Scott M. Stringer and members of his Office, specifically Constantine Kokkoris, Chief of the Bureau of Labor and the Comptroller’s Office’s Bureau of Labor Law Supervising Attorney Michael Turilli, Agency Attorney Caroline Friedman, Management Auditor Ilona Stadnicka, as well as the Comptroller’s Office Director of Investigations Francisco Gonzalez and Investigator Dwayne Gibson.
The investigation was handled for the Attorney General’s Office by Investigators Frank Tirri and Ray Almodovar and Supervising Investigator Sylvia Rivera, under the supervision of Deputy Chief Investigator John McManus. The Investigations Bureau is led by Chief Investigator John Reidy.
The prosecution is being handled by Assistant Attorney General Amy Schneider and being supervised by the Labor Bureau’s Criminal Section Chief Richard Balletta and Chief Stephanie Swenton of the Criminal Enforcement and Financial Crimes Bureau. The Labor Bureau is overseen by Chief Deputy Attorney General for Social Justice Meaghan Faux. The Criminal Enforcement and Financial Crimes Bureau is overseen by Chief Deputy Attorney General for Criminal Justice José Maldonado.
Office of NYS Attorney General Letitia James: https://ag.ny.gov/press-release/attorney-general-james-and-nyc-comptroller-stringer-announce-sentencing-construction
For Immediate Release
May 30, 2019
Contact Matt Kent
Buffalo, NY – Without enforcement, laws are nothing more than words on paper. The New York Foundation for Fair Contracting (NYFFC) applauds Erie County for enforcing its Lowest Responsible Bidder Law by deciding not to award the reconstruction of Lake Avenue project to Zoladz Construction.
The NYFFC appreciates the swift action by Erie County leaders to address serious allegations that Zoladz falsely presented itself as a Service-Disabled Veteran-Owned Small Business to improperly obtain millions in federal contracts. Zoladz paid a $3 million fine in a related settlement agreement.
Zoladz also has a troubling safety record. In just the past three years, two Zoladz workers lost their lives on the job. OSHA fined Zoladz over $50,000 for serious violations identified after these workplace deaths in 2016 and 2018. OSHA only considers a violation to be serious “when the workplace hazard could cause an accident or illness that would most likely result in death or serious physical harm.”
To the NYFFC’s understanding, this is the first instance of Erie County using its lawful responsible bidder authority. This enforcement ensures responsible contractors who abide by the law and deliver a high-quality product have a fair shot at public works contracts.
Today, Erie County has reaffirmed its statewide leadership in government contracting accountability. The NYFFC encourages other municipalities across the state to look to Erie County’s example and only give hard-earned taxpayer dollars to the lowest responsible bidders.
The NYFFC is a watchdog non-profit established to level the playing field in public works construction for the benefit of taxpayers, responsible contractors, and workers.
The New York Foundation for Fair Contracting (“NYFFC”) appreciates the Erie County Legislature’s decision to table yesterday’s Economic Development Committee vote on awarding the Lake Avenue Reconstruction Project contract to Zoladz Construction.
The NYFFC filed a bid protest with Erie County questioning the responsibility of Zoladz Construction. In 2017, Zoladz settled a case with the US Department of Justice concerning allegations that Zoladz falsely presented itself as a Service Disabled Veteran Owned Company in order to obtain an advantage on federal contracts. Zoladz agreed to a pay $3 million fine as part of that settlement agreement.
Zoladz also has a troubling safety record. In the past three years, two workers lost their lives in Zoladz workplace accidents. In a case that just closed in April 2019, OSHA fined Zoladz over $40,000 for serious violations in relation to the 2018 fatality. OSHA considers a violation to be serious “when the workplace hazard could cause an accident or illness that would most likely result in death or serious physical harm.”
The NYFFC recognizes Erie County’s ongoing efforts to promote responsible contracting and is encouraged by the decision to further investigate the serious issues concerning Zoladz Construction.
In light of Zoladz Construction’s recent history, the NYFFC considers the contractor an irresponsible contractor. Both State and County law permits the County to award public contracts to the lowest responsible bidder. The NYFFC urges the County to find Zoladz an irresponsible contractor and to award the Lake Ave. Reconstruction Project to the next lowest, responsible bidder.
The NYFFC is a non-profit fair contracting organization committed to leveling the playing field in public works construction.
For Immediate Release
Contact Matt Kent
Last night, state leaders reached a budget agreement for fiscal year 2019 which unfortunately fails to include the proper definition of public works. Properly defining public works is a commonsense reform to apply anti-corruption protections and family-supporting prevailing wages to all construction projects which receive public assistance.
To protect taxpayers from wasteful spending and corruption, New York requires competitive and transparent public bidding by contractors on all public works construction projects. Unfortunately, a loophole in state law allows millions of taxpayer dollars to be spent without the anti-corruption and transparency demanded of traditional public work projects. Increasingly, economic development projects across the state fall through this loophole, allowing public money to bypass these safeguards as it goes to private interests. Closing the loophole by properly defining public work to include all projects supported with public money will provide much needed accountability and transparency in government spending.
The measure’s opponents successfully muddied the water by spreading misinformation to suggest it would result in “huge” increases in construction project costs. The truth is that defining public works would reward workers and taxpayers, not the wealthy and irresponsible contractors exploiting our flawed system. As per economists Frank Manzo, Alex Lantsberg, and Kevin Duncan, “the overwhelming majority of peer-reviewed research conducted over the last 15 years forms the consensus view that construction costs are not affected by prevailing wages.” Sixteen other states across the country apply a more comprehensive definition of public work, which apply middle-class prevailing wages. Unsurprisingly, the doomsday scenario of huge cost increases and less development, which opponents claim would befall New York, has not materialized in these other states.
While today’s state budget was a missed opportunity, the New York Foundation for Fair Contracting looks forward to when all taxpayer-funded construction goes to the lowest responsible bidders, not the most politically well-connected contractors. The NYFFC is a non-profit established to level the playing field in public works construction for the benefit of taxpayers, responsible contractors, and workers.
For Immediate Release
Contact Matt Kent
March 13, 2019 – ALBANY, NY – Yesterday, the New York State Senate and Assembly released their 2019 budget plans, which include the proper definition of “public works” – thus seeking to end a long-standing and troublesome loophole. The New York Foundation for Fair Contracting applauds leaders of both chambers for taking action to protect workers and taxpayers.
To prevent wasteful spending and corruption, New York requires competitive and transparent public bidding on all public works construction projects. Unfortunately, a loophole in state law currently allows millions of taxpayer dollars to be spent without the anti-corruption and transparency demanded of traditional public work projects. This legislative change will resolve this discrepancy, on behalf of all New Yorkers.
Increasingly, economic development projects across the state fall outside the existing taxpayer and worker protections built into state law. It’s unacceptable that the current loophole allows public money to bypass these safeguards as it goes to private interests. Closing the loophole by properly defining public work to include all projects supported with public money will provide much needed accountability and transparency in government spending.
This move by legislative leaders will, if signed into law by Governor Cuomo, close the loophole and ensure taxpayer-funded construction projects are awarded to the lowest responsible bidders, not the most politically well-connected contractors.
In his State of the State address, Governor Cuomo threw his support behind bringing needed reforms to project construction with public subsidies. The NYFFC is encouraged by the stated support of the Governor and the Legislature, and looks forward to its inclusion in the state’s adopted budget.
About NYFFC: The New York Foundation for Fair Contracting is a non-profit organization established to level the playing field in public works construction to benefit taxpayers, responsible contractors, and workers.
ALBANY — Governor Andrew M. Cuomo announced Wednesday that more than $35 million was returned to over 35,000 victims of wage theft in 2018. Since the Governor took office, the State has recovered and returned over $285 million to more than 250,000 workers — the highest total in the nation.
“New York State will not tolerate theft of wages in any form, and any employer that attempts to unlawfully withhold wages from their hardworking employees will be held responsible,” Governor Cuomo said. “We are proud to have recovered and returned the highest amount of denied wages in the country, and we will continue to protect the hard earned wages of men and women throughout the state.”
In the Finger Lakes region, $1,833,320.96 was returned to 3,364 victims; in the Southern Tier region, $346,165.36 was returned to 385 victims; in Western New York, $2,322,075.01 was returned to 3,410 victims; and statewide, $35,370,000.30 was recovered for 35,840 victims.
Some of the most common ways employers steal wages include:
Paying tips only; Paying a day rate for work performed that is sub-minimum wage when hours worked are counted; Not paying an overtime rate for hours worked over 40 in a payroll week; Not paying for travel time between work assignments in the same day; Withholding final paychecks; Not paying for “training” time; and Charging employees for required uniforms or equipment.
State Labor Commissioner Roberta Reardon said, “We will continue aggressively pursuing justice for workers who have been denied their proper wages or have been cheated by employers in the form of improper uniform deductions and other labor violations. Workers deserve an honest wage for an honest day’s work and we’re here to ensure they get that.”
Prevailing wage is the minimum pay rate set by law for employment on public work projects. This applies to all laborers, workers or mechanics employed under a public work contract. The New York State Department of Labor’s Bureau of Public Work is responsible for enforcing the law and determining the wage schedule for each individual region. Employers must pay the prevailing wage rate set for the locality where the work is performed. Should a violation of the prevailing wage law occur, the Department of Labor has the authority to ban individuals or businesses from bidding on public work projects for a period of up to five years.
You can complete the form at the bottom of the page to report a workplace violation to NYFFC or to request more information about the services offered by NYFFC. All communications are kept strictly confidential.
A few weeks ago, Indiana passed the third anniversary mark since state legislators repealed the common construction wage law. Back in July of 2015, when the repeal went into effect, the intent was to provide financial relief for taxpayer-funded projects by reducing costs associated with construction wages.
At the time, former Governor Mike Pence, a major supporter of the repeal, said that “wages on public projects should be set by the marketplace and not by government bureaucracy.” During the campaign to get the repeal passed, supporters said the bill would help “cash-strapped” schools and other institutions keep project costs down.
So, now that a few years have gone by and data has had the chance to be developed, the big question is: Did it work? Did the repeal save public institutions the money it was supposed to?
Earlier this year, a report from the Midwest Economic Policy Institute (MEPI) straightforwardly titled “Effects of Repealing Common Construction Wage in Indiana” detailed the types of changes the repeal brought about across ten different construction market attributes. MEPI specializes in infrastructure investment and construction industry research.
To put it plainly, their report was a brutal look at the decision’s shortcomings and the damage its done to the construction industry.
“Repeal of common construction wage has led to a host of negative impacts on workers and the construction industry – including lower wages and more income inequality – while failing to deliver any meaningful cost savings or increased bid competition promised by those in favor of repeal,” researchers wrote.
Let’s take a look at the ten construction outcomes that researchers studied and how they have been impacted.
Right off the bat, it’s fairly plain to see the people most impacted by the repeal are Indiana construction workers themselves, and vicariously their families. Just how much? A straight-up loss of 8.5 percent, even accounting for all the various factors that affect a person’s hourly wage (such as age, race, union membership, and other factors).
This wasn’t just a fact reflected in this report alone, it was actually predicted in additional research reports published at various times before and after the repeal went into effect (MEPI, Manzo, Bruno, Littlehale, et. al)
The Los Angeles County District Attorney’s Office on Tuesday announced fraud and other charges against two siblings who run a Los Angeles construction company, claiming the two are responsible for at least $6 million in losses to the State Compensation Insurance Fund. One charge alone allegedly resulted in a $500,000 loss to the state fund.
Authorities allege that from Jan. 1, 2012, through March 31, 2017, Enrique Vera, owner of Ultimate, Inc., and his sister, office manager Gloria Vera, falsified the payroll records they submitted to the state fund in order to avoid paying the proper amount of workers’ compensation insurance premium; discouraged injured workers from making workers’ compensation claims and pursuing the associated benefits; and paid less than the prevailing wage on a student housing project at the University of California, Los Angeles. Gloria Vera was also charged with trying to hide employees’ workplace injuries.
The two Veras face a total of nine counts of felony workers’ compensation fraud, three counts of felony insurance fraud and six counts of felony grand theft of labor. Enrique Vera is subject to a maximum state prison sentence of 15 years if convicted, while Gloria Vera could receive a sentence of up to 19 years.
Workers’ compensation premiums, depending on how risky the trade, can be very expensive. Typically premiums are a certain dollar amount per $100 of payroll. For example, according to the latest California workers’ compensation rate comparison, the base premium for a roofer, one of the most dangerous construction jobs, making less than $23 per hour, range from $24.34 to $80.81. That’s in addition to state and federal payroll obligations. The highest rates usually take effect after a contractor has had a few workers’ compensation claims or if the company has not been in business very long and not yet established an experience record.
Read further: https://www.constructiondive.com/news/california-contractors-pegged-in-alleged-6m-fraud/541141/
Bradley Kyler, 30, owner of Bucket Pro LLC, submitted a bid to the Village of Ellicottville engineer stating that his business had that state certification, Ellicottville police said in a news release.
Bradley Kyler, 30, owner of Bucket Pro LLC, submitted a bid to the Village of Ellicottville engineer stating that his business had that state certification, Ellicottville police said in a news release.
If the village would have awarded his company the bid, it could have lost “a substantial amount of grant funding for the project,” police said. Officials did not specify on what project Kyler’s company placed a bid.
Kyler, of Salamanca, was charged with first-degree tampering with public records and first-degree offering a false instrument for filing.
The case was investigated by Ellicottville police and an investigator for the New York State Foundation for Fair Contracting.
For 11 years, Karla Quezada assembled sandwiches at the Subway in the food court of the Ronald Reagan Building and International Trade Center, a sprawling complex in downtown Washington, D.C., owned by the U.S. General Services Administration.
She routinely worked more than 40 hours a week, with no overtime pay. She worked holidays, also without extra compensation. Her paychecks took a hit whenever she stayed home sick.
“I knew it was a federal building, but since everyone else was paying low wages, too, I just figured that’s how it was supposed to be,” Quezada, 40, said in a recent interview at her home in Arlington, Virginia.
Actually, that’s not how it’s supposed to be. But each year, thousands of contractors enriched by tax dollars skirt federal labor laws and shortchange workers. In fact, U.S. Department of Labor data show that upwards of 70 percent of all cases lodged against federal contractors and investigated by the department since 2012 yielded substantive violations.
But many of these violators go on to receive more federal contracts. An Obama administration effort to change that practice was derailed in late March by President Donald Trump.
The Center for Public Integrity examined a subset of 1,154 egregious violators — those with the biggest fines, highest number of violations or most employees impacted — included in the Labor Department’s Wage and Hour Division enforcement database and cross-referenced them with more than 300,000 contract records from the Treasury Department. The Center found that between January 2015 and July 2016:
Federal contractors account for almost a quarter of the American workforce and took in more than $470 billion in taxpayer funds in 2016, according to USASpending.gov. But the government’s methods for tracking labor-law scofflaws are unreliable, making it easy for violations to go unnoticed. Even when violations are documented, they rarely play a role in contracting decisions.
The Labor Department tried to address the problem in 2016 with a rule that would have required federal contractors to disclose wage and safety violations and come into compliance with the law if they wanted to keep doing business with the government. Invoking a statute rarely used prior to the Trump administration, however, Congress voted to undo the regulation — already on hold because of a legal challenge — and Trump sealed its fate with his signature.
In a statement in February, the White House said the rule “would bog down Federal procurement with unnecessary and burdensome processes…” Now that it has been repealed, labor advocates say more cases like Karla Quezada’s can be expected.
In 2013, having worked at Subway more than a decade, the native of El Salvador filed a complaint with the Labor Department, seeking thousands of dollars in back pay. She recalls regularly working up to 15 hours of overtime each week, but says she was never paid the time-and-a-half owed to her under the Fair Labor Standards Act. Some weeks, her pay stub wouldn’t explicitly say how many hours she had worked; other weeks, she would get two stubs — as if she had worked less than 40 hours at separate Subway locations.
“Sometimes, out of necessity, you just work,” Quezada said in Spanish. “I’m a single mom, and I would work from 6 to 6 sometimes, more than 40 hours. To me, the check seemed okay, but I’ve come to realize they were cheating.”
Quezada and other food-court workers at the Reagan building, organized by the labor group Good Jobs Nation, went on strike 15 times from 2013 to 2016. Management, she said, cut her hours sharply in response and threatened to call immigration officials on workers who were undocumented. Quezada, a permanent U.S. resident, said she encouraged them to continue striking.
In 2014, the White House recognized Quezada as a “Champion of Change” for her efforts. But the reduction in her hours forced her to quit, she said. She took on two part-time jobs that together pay less than her old one, and she and her 12-year-old son had to move into a single room in a relative’s apartment. Her two older children remain in El Salvador.
After two years, the Labor Department found in Quezada’s favor, but the statute of limitations and missing documentation led to an unsatisfying payout: $226.
“I’ve had to deprive my kids of many things,” she said. “We ended up completely screwed.”
Investigators determined that the Subway in the Reagan building owed eight workers, including Quezada, about $3,000 in back wages. They opened investigations into the eight other Subways owned by Quezada’s employer, Amer Ghalayini, and found wage violations affecting 28 workers.
The Labor Department reached a settlement with Ghalayini, who agreed to pay more than $33,000 in back wages and damages while admitting no wrongdoing. The department also found overtime and minimum-wage violations at four other restaurants in the Reagan building’s food court.
The Subway that employed Quezada is licensed by Trade Center Management Associates, which holds a contract with the General Services Administration to operate restaurants in the Reagan building. Officials at Subway’s corporate offices and at Trade Center Management Associates declined to comment.
Reached by phone, Ghalayini disputed Quezada’s claims but declined to elaborate.
“What happened, happened,” he said.
‘I feel like I’m being robbed’
In theory, ensuring federal contractor compliance with labor laws should be easy. In practice, it’s complicated.
The task of policing the nation’s businesses lies with the Labor Department’s Wage and Hour Division. Established under Franklin D. Roosevelt and long housed in the department’s Employment Standards Administration, the division enforces laws governing pay, family and medical leave and visas, among other things. When the administration was abolished in 2009, its four components — Wage and Hour and the offices of Federal Contract Compliance Programs, Labor Management Standards and Workers’ Compensation Programs — became stand-alone divisions. Since then, the Wage and Hour Division’s budget has remained relatively flat; it was $227.5 million in fiscal year 2016.
The division relies heavily on complaints from workers to identify delinquent employers, placing the workers in a precarious position while they try to retrieve the wages they believe they’re owed. Once a case enters the system, it can stagnate because of employer appeals or disputes over legal technicalities.
In fiscal year 2011, the division took, on average, six months to resolve a complaint and closed 33,000 cases. In fiscal year 2016, the average complaint was resolved in four months but only 29,000 cases were closed.
It’s often hard for workers to know what exactly constitutes wage theft — a $50 billion-a-year problem in the U.S., one 2014 study found — since it can take so many forms. Employers can skirt overtime regulations or artificially depress wages. Or, workers can be asked to perform increased responsibilities without a corresponding bump in pay, a potential violation.
Obama’sFair Pay and Safe Workplaces order, which led to last year’s rule, was supposed to ensure that wage and other labor violations were taken into consideration during the contracting process. The order came on the heels of a 2013report by Senate Democrats, which found that 49 companies collectively cited for 1,776 violations between 2007 and 2012 were awarded $81 billion in federal contracts in 2012.
When contractors don’t follow the law, workers like Latoya Williams feel the squeeze.
As a senior customer service representative for a subcontractor to the Federal Emergency Management Agency, Williams spends her days helping agents, homeowners and mortgage companies untangle the details of the National Flood Insurance Program. Most calls are routine, but sometimes distraught homeowners need help filing a claim.
“You have to let people know that you care — like, you really care,” said Williams, who lives in Kensington, Maryland, and has worked at Lionel Henderson & Co. for six years. “Someone just lost their whole house underwater, [and] you want me to be on the phone just straight talking about policies? No. I want to know how you’re doing.”
Williams can empathize with the callers: She was homeless for her first two years on the job, paying friends who let her stay with them.
“I understand the struggle,” Williams said. “I understand what it is to lose everything, to not have somewhere to lay your head at night. I put myself [in their place] when they call.”
Williams is paid $14.28 an hour by Lionel Henderson, a subcontractor until recently to Aon National Flood Services Inc., which has a contract with FEMA, worth up to $163.4 million, to administer the flood insurance program. Under prevailing-wage classifications in the Service Contract Act, she should be getting between $16.24 and $18.74 an hour, according to the Communications Workers of America, which filed a complaint with the Labor Department in December seeking back wages for Williams and her colleagues. The department opened an investigation of Williams’ case in March.
Reached by phone at Lionel Henderson’s corporate office in Atlanta, the company’s human resources director, Alanna Smith, declined to comment.Torrent Technologies Inc. won the FEMA contract in September, but won’t begin administering it until later this year. Torrent’s chief executive officer, Ian Macartney, said the company had no role in deciding Williams’s pay.
Today, Lionel Henderson’s starting pay for a customer-service representative with two years’ experience is 22 cents an hour higher than what Williams makes after six. Williams said she has trained company representatives who perform the same duties as she does but earn more. “And I’m just sitting there like — I feel like I’m being robbed.”
An asthmatic, Williams said she can’t afford inhalers on her current salary. Nor can she afford doctor copays. Some months, she gets donations from churches, takes out small loans or calls her parents to see if they can help with expenses. To supplement her income, she styles hair out of her home on weekends. She takes just a few clients because a bulging disc in her back makes it hard to stand for long periods.
“I’m a hard worker,” Williams said. “And, you know, when you tell people where you work, they’re like, ‘Aw, man, you’re working there? I know you making good money.’ But you’re just sitting there like, ‘Only if you knew.’”
Uncertain future for wage enforcement
It’s unclear how the Trump administration will approach enforcement of the nation’s panoply of labor laws, from the Family and Medical Leave Act, which provides employees with unpaid maternity and health leave, to the Davis-Bacon Act, which sets a prevailing wage for workers on government construction jobs.
Trump has tapped R. Alexander Acosta — dean of the Florida International University law school — to lead the Labor Department. Acosta is a former member of the National Labor Relations Board and a former U.S. attorney for the Southern District of Florida. The previous nominee, fast-food executive Andrew Puzder, withdrew amid outcry over his support of workplace automation, an undocumented housekeeper he employed tax-free, and domestic violence allegations stemming from his 1987 divorce.
Days after his inauguration, Trump issued an order to freeze hiring throughout the federal government, raising concerns that the much-criticized Wage and Hour Division may end up losing ground. Trump’s fiscal year 2018 budget calls for an overall Labor Department cut of 21 percent. The department did not respond to interview requests.
The Wage and Hour Division had been in the midst of an overhaul following missteps during the George W. Bush administration. In 2009, the Government Accountability Office reported that the division had mishandled nine of every 10 complaints lodged by auditors posing as victims of wage theft.
“Far too often many of America’s most vulnerable workers find themselves dealing with an agency concerned about resource limitations, with ineffective processes, and without certain tools necessary to perform timely and effective investigations of wage theft complaints,” the GAO concluded.
On one occasion, an auditor posing as a janitor claimed to have been paid less than the minimum wage. The Labor Department investigator didn’t try to call the fictitious employer until months later, didn’t respond to the complainant when he tried to follow up and ultimately suggested he look for another job instead of pursuing his case. The complaint was never recorded in the Wage and Hour Division’s database.
The sting operation was a black eye for the department and led to the hiring of about 300 investigators early in Barack Obama’s first term.
In May 2014, the division got its first permanent administrator in a decade: David Weil, a Boston University professor who had been fiercely critical of the Labor Department’s ability to oversee work-on-demand employment and the proliferation of subcontractors hired to do what were once core company functions. The number of investigators had dropped steadily during the Bush administration, from a high of 949 to a 40-year low of 731 investigators in 2008, shortly before Obama took office.
Under Obama, the number of investigators jumped to about 1,000 — the highest level since the 1980s. Even so, the division is stretched thin: those investigators must monitor 7.3 million businesses.
The division investigated 2,025 cases involving federal contractors in 2016. It found violations in 77 percent of these cases.
“If you get the benefit of doing work for the public through a federal contract, you should be treating your workforce in the way we as a society have said is the appropriate way,” Weil said in an interview in December. “You should be models of what we do.”
Last fiscal year, the division found 32,487 violations of the Service Contract Act, which sets prevailing wages and benefits for workers on most service contracts, and 12,567 violations of the Davis-Bacon Act. The Contract Work Hours and Safety Standards Act, which applies to construction contracts, accounted for 4,044 violations in 389 cases.
In all, the division found, nearly 32,000 federal contract workers were owed slightly more than $50 million in back pay due to wage-law violations.
Violators during the 18-month period covered by the Center’s analysis include names familiar and arcane. Sterling Medical Associates, a healthcare provider that holds at least $53 million in contracts with the Department of Veterans Affairs and other agencies, was flagged for 730 violations and ordered to pay nearly $1.6 million in back wages. Cornell University, which received around $21 million worth of contracts with various agencies, recorded 1,460 violations and was told to repay nearly $200,000. Corrections Corporation of America, the nation’s second-largest private prison firm, received more than $500 million in contracts with the departments of Justice and Homeland Security. It had 750 violations and had to pay more than $600,000 in back wages.
Officials with Sterling Medical Associates and Cornell University did not respond to requests for comment. A spokesman for Corrections Corporation of America, recently rebranded as CoreCivic, said that both of the facilities where the Labor Department found wage violations are in compliance with the Service Contract Act today.
‘Burdensome new regulatory regime’
During the most recent fiscal year, the government entered into or modified contracts with nearly 70,000 companies or their subsidiaries to deliver hundreds of thousands of distinct goods and services.
To figure out which companies to hire, agencies begin by posting solicitations, usually on FedBizOpps.gov, where registered contractors can sift through opportunities. When an agency puts out a solicitation, dozens of companies might submit proposals. Each one, in theory, should be vetted to ensure it is a cost-conscious, responsible seller.
Federal guidelines offer some clues along these lines: How solid are the company’s finances? How did it perform on previous contracts, if any? Businesses that fall into certain categories — including small, veteran and minority-owned enterprises — may be given preference.
When contracting officers need to research a company’s history, they can access the Past Performance Information Retrieval System, or PPIRS. But the information kept in the database doesn’t include contractor compliance with labor laws. And some of the data PPIRS pulls in from other databases like the Federal Awardee Performance and Integrity Information System or FAPIIS, is not reliable.
The 2013 Senate report, for example, found that energy company BP had no misconduct entries in FAPIIS related to the 2010 Deepwater Horizon offshore oil rig explosion, which killed 11 workers and sullied the Gulf of Mexico with 4 million barrels of crude oil. The accident prompted the U.S. Environmental Protection Agency to ban BP from all federal contracts for 16 months, but the ban wasn’t reflected in the database.
The Office of Federal Procurement Policy, which oversees contracting standards, issued a memo in 2013 calling for staff to submit company performance reviews more often. It found that such reviews were entered less than 30 percent of the time at some agencies, leaving the government “vulnerable to poor acquisition outcomes in the future.”
Obama’s executive order expanded procurement guidelines to include a review of would-be contractors’ labor records. The subsequent Labor Department rule required contracting staff to consider a company’s history of compliance with 14 labor laws. Among them were the Fair Labor Standards Act, which covers wages; the Occupational Safety and Health Act; and laws forbidding discrimination on the basis of race, sex, religion and disability, to name a few. The rule required any company seeking a contract to check a box to indicate whether it had blemishes on its record, going back three years.
The vehicle for the rule’s undoing by Congress was the rarely used Congressional Review Act, through which recently finalized regulations can be dismantled by simple majorities in the House and Senate. The act prohibits federal agencies from crafting similar rules in the future unless authorized to do so by Congress.
Even without the short-lived regulation, companies that break the law on a federal job can be debarred or suspended from receiving further contracts. Last year, the Labor Department debarred 49 firms.
“The [Obama] executive order was not intended to deny a contractor an award, or to send them to suspending and debarring; it was about getting them into compliance,” said Lafe Solomon, who joined the Labor Department in 2014 to develop what became the Fair Pay and Safe Workplaces rule. Specialists would help agencies decide how to address violations by contractors. Companies with more serious violations would be allowed to develop corrective plans.
Among the 939 written comments on the rule sent to the Labor Department were letters of support from groups such as the International Association of Machinists and Aerospace Workers and individuals such as William Clegg, who used to work for a halfway house under contract with the federal government in Greensboro, North Carolina.
“If I hadn’t been living with my mother, I would have been sleeping on the street with what I was getting paid and would have been forced to go on public assistance,” Clegg wrote. “How safe do you think our communities [will be] when we can’t pay a living wage to those that assist with our safety?”
But the rule was wildly unpopular with many contractors and their trade associations. Associated General Contractors of America, for example, denounced an early version as “unfounded, unnecessary, unworkable and unlawful.”
The AGC’s regulatory counsel, Jimmy Christianson, elaborated in an interview. The government, he said, should improve its own contractor vetting instead of laying the burden on companies.
“You’re the federal government,” Christianson said. “You’re the ones that are citing the contractors, don’t you have the information? Why does the contractor have to report it? Isn’t that kind of a joke?”
Two other trade groups went further than AGC. In October, Associated Builders and Contractors and the National Association of Security Companies sued the Labor Department and other agencies responsible for the rule’s implementation weeks before its first phase was to kick in. The groups called the rule unlawful, saying contractors could be penalized for cases that had been settled with no admissions of guilt or were still being contested.
“A cumbersome and burdensome new regulatory regime is being created to implement this misguided executive policy, which … violates the rights of government contractors, at considerable cost and with no benefits to taxpayers,” the complaint said.
A federal district court in Texas agreed that the groups had a strong case. The night before the rule was to have gone into effect, Judge Marcia Crone, who was appointed by President George W. Bush in 2003, enjoined most of its requirements, though one aspect was preserved: paycheck transparency. Employers that received contracts after January 1 had to give employees breakdowns of their pay rates and benefits so they could monitor their own paychecks for accuracy.
On the Senate floor March 6, Sen. Elizabeth Warren, D-Mass., urged her colleagues not to side with vested interests and vote for a resolution that would spell near-certain doom for the rule. “Instead of creating jobs or raising wages, they’re trying to make it easier for the companies that get big-time, taxpayer-funded government contracts to steal wages from their employees and injure their workers without admitting responsibility,” she said.
But the political muscle of government contractors is hard to overestimate.
In fiscal year 2016, the defense industry, which did $297.5 billion in business with the government, collectively spent $126 million on lobbying and gave almost $13 million to candidates for federal office — 59 percent to Republicans and 41 percent to Democrats, according to data compiled by the Center for Responsive Politics.
The construction industry, whose contracting totaled $28.6 billion, spent $52.2 million on lobbying and gave $32.6 million to candidates for federal office – 67 percent to Republicans and 33 percent to Democrats.
‘We just get by check to check’
When the U.S. Army was deciding whether to keep doing business with a cleaning company it employed at Fort Belvoir in Virginia, it checked the company’s record in the Federal Awardee Performance and Integrity Information System. FAPIIS is supposed to record contractors’ most serious missteps; the company, Brown & Pipkins, had a clean record. It hadn’t been debarred or suspended, nor had it been found guilty of defective pricing, human trafficking, or anything else FAPIIS tracks.
What the record didn’t show was that in 2013, a Labor Department investigation found that Brown & Pipkins owed its cleaning staff about $330,000 in back wages. It owed several thousand dollars to one worker: Carlos Umaña, a union leader. He was abruptly fired in December 2012 after he and his colleagues came to work wearing hats bearing the Service Employees International Union’s logo.
“It was our way of showing that we do have a voice in this,” Umaña, 72, said in Spanish during a recent interview in his Silver Spring, Maryland, home.
Umaña began working at Fort Belvoir in 1997. Within two years, the janitorial staff decided to join SEIU to protect its wages. The Army gives Fort Belvoir’s cleaning contracts to different companies every few years; once Brown & Pipkins took over in 2012, it stopped paying Umaña and 67 workers the wages outlined in their collective bargaining agreement. The Labor Department found that workers were underpaid between $4.08 and $5.73 an hour and didn’t receive paid holidays and sick leave.
After Umaña’s union filed a complaint with the National Labor Relations Board, Brown & Pipkins reinstated him. But during the half-year he was idled, he could find only part-time work. His pay — and wages earned by his wife, Cecilia, who does janitorial work at Walter Reed Army Medical Center — weren’t enough to cover expenses.
“With these jobs, we can’t save,” Cecilia said. “We just get by check to check.”
The Umañas are still working their way through the debt they accumulated. Their financial troubles weigh heavily on their 22-year-old son, who shares his father’s name. Carlos is trying to earn an associate’s degree by taking online classes after work. When his father was fired in 2012, he put off going to college full-time to help with the family’s expenses.
“Who doesn’t like seeing they’re going to get a job [done] cheaper?” Carlos said. “But there are people attached to it. There’s an income attached to it.”
Brown & Pipkins did not respond to requests for comment.
The company reached a settlement with the NLRB over the Fort Belvoir allegations in February 2017. In 2016, it received contracts totaling about $4.5 million from the Army, primarily for janitorial work in Virginia.
A spokesperson for the U.S. Army Contracting Command said the agency considered Brown & Pipkins’ labor record before awarding the contracts, but didn’t find the as-yet unproven allegations to be disqualifying. Data reviewed by the Center show that the Army contracted with 34 companies with wage violations from the beginning of 2015 until mid-2016, for a total of $20 billion.
Trump and federal contractors
In the weeks before Election Day, Donald Trump released a 30-second television message to voters that crystallized his philosophy on how to help the American worker.
The ad — “Deals” —focused on Trump’s plan to renegotiate trade agreements and cut taxes on manufacturers. The voiceover ended with this promise: “Donald Trump knows business and he’ll fight for the American worker.”
Some of Trump’s biggest fights, even before he took office, involved federal contractors.
He threatened General Motors with higher taxes for moving its operations outside of the U.S. He decried “out of control” costs for Lockheed Martin’s F-35 military fighter jet and Boeing’s contract for a new Air Force One, which he suggestedbe canceled.
Since his inauguration, Trump has claimed he spurred job creation by federal contractors Ford, Fiat Chrysler, Amazon, Walmart, GM, Intel, and Lockheed Martin. (All the companies said their investments were in place before Trump took office.)
In December, as president-elect, Trump negotiated with the Carrier Corporation to keep jobs from moving to Mexico in exchange for $7 million in tax credits over 10 years. Trump said the deal saved 1,100 jobs, but union officials said only 730 people would be retained in the U.S. while 553 positions would still move across the border.
Greg Hayes–CEO of Carrier’s parent company, United Technologies Corp. – said “there was no quid pro quo” and that federal contracts were not mentioned during the discussions. But in a CNBC interview, he implied that the company agreed to negotiate, in part, to ensure a good relationship with the administration.
“There was a cost as we thought about keeping the Indiana plant open,” Hayes said. “At the same time … I was born at night, but not last night. I also know that about 10 percent of our revenue comes from the U.S. government.”
United Technologies received about $5.6 billion in revenue from federal contracts in 2016.
Labor organizers such as Joseph Geevarghese, director of Good Jobs Nation, a grassroots organization that advocates for federal contract workers, are hoping Trump will become an ally.
“As the CEO of the United States government, you have an opportunity to negotiate for all federal contractors, right? To make sure that federal contractors don’t screw workers who serve the American people,” Geevarghese said.
Best-case scenario in his view? Trump does what the labor movement spent eight years trying to get Obama to do: give preference in federal contracts to employers that pay “living wages” of at least $15 an hour with benefits, and are neutral on workplace organizing. Worst case? The gains federal contract workers have seen — a higher minimum wage, more benefits and stronger protections against harassment or discrimination — are erased.
Debbie Berkowitz, a senior fellow with the National Employment Law Project and a former senior policy advisor with the Labor Department’s Occupational Safety and Health Administration, said the undoing of the Fair Pay and Safe Workplaces rule was “like the opening salvo of the war on workers.
“The president and [Congress], if they wanted to do something for the American worker, this [was] the rule to keep in place,” Berkowitz said. “It would assure that companies that get taxpayer money to build the planes, provide the food for the military, or build large projects are providing good jobs.”
On a snowy day in February, federal contract workers rallied by Good Jobs Nationgathered outside the Capitol. The rally had been organized to protest Puzder’s scheduled Senate confirmation hearing. When he withdrew the day before, it became a celebration.
“You are the ones who make America great!” Geevarghese shouted into a microphone. “You’re the ones who get up every day and serve the American people! And you should be proud!”
Some workers waved American flags, while others held up cardboard shields etched with the words “Good Jobs Defense,” a campaign of Good Jobs Nation. Supporters, including Warren, Sen. Bernie Sanders, I-Vt., and actor Danny Glover riled up the crowd.
“We have shown that we are watching, we are going to pay attention and we are willing to fight,” Warren said. “And we know that when we fight …”
“We win!” the audience responded.
“When we fight …”
“… we win!”
Federal workers, Geevarghese said in an interview, will remind Trump of his promises.
“You won because you said you’re going to be a champion for the working class. Do it. And if you don’t? If you betray us? We’ll resist.”
This week, New York State Attorney General Barbara Underwood and Port Authority Inspector General Michael Nestor announced the arrest of Marjan Kasapinov, 63, for allegedly taking more than $40,000 in wages and benefits from 28 workers employed to work on a publicly funded construction project at LaGuardia Airport. Kasapinov faces between one and four years in prison, a five-year ban from public work and payment of back wages to his employees.
Kasapinov, doing business as Paterson, N.J.-based EMLO Corp., was contracted to perform asbestos removal work on several buildings at LaGuardia Airport between March 2014 and March 2015. Kasapinov and EMLO Corp are charged with failure to pay the prevailing rate of wage or supplements, offering a false instrument for filing in the first degree and failure to secure workers’ compensation insurance-all felonies.
“Contractors that corrupt public projects and fail to pay their workers will be held accountable,” stated Underwood. “Workers deserve fair pay of the wages and benefits they’ve earned-not to be exploited by their employer. Our office will continue to work relentlessly to combat wage theft and the abuse of public dollars.”
“Companies doing business with municipalities, state agencies and authorities are legally bound to pay their employees the fair and prevailing wage,” added Michael Nestor, inspector general for the Port Authority of NY & NJ, in statement. “In this case, the defendant chose to enrich himself at the expense of his own workers. Today’s arrest will serve notice to all contractors that the Port Authority of NY & NJ will not tolerate wage fraud or any other criminal misconduct on public projects.”
(HAMBURG, NEW YORK) – Fear – in a word, according to representatives of the non-profit New York Foundation For Fair Contracting, is holding back many Non-Union Construction Workers from reporting wage theft or unsafe working conditions.
That’s because they don’t know where to go for help when it comes to being cheated out of their wages and their fringe benefits.
And just how would they ever make the right authorities aware of what’s happened to them without facing repercussions from their employer or being fired from their jobs?
And it’s not just Construction Workers. Its contractors looking for a fair shot at obtaining public construction work, while at the same time battling unscrupulous contractors that receive low responsible bidder status on a project.
And its public bodies that want to award contracts to responsible contractors who qualify as the low bidder.
After all, in the end, it’s the taxpayer who foots the bill when it’s found a debarred contractor that’s been restricted from bidding for public works jobs does indeed get the job.
But here in New York State, there’s an entity that’s currently working to level the playing field by supporting fair contracting across the State – the New York Foundation For Fair Contracting, a non-profit Labor-Management Organization that monitors Prevailing Wage public project work and the competitive bidding process in Western, Central and Northern New York, including those that fall under New York State Labor Law § 220 (covering public work) and Federally-funded Davis-Bacon (Prevailing Wage) work.
Under the State Freedom of Information Law and the Federal Freedom of Information Act (FOIA), the NYFFC – which is not a private investigative service – reviews bid documents, contracts and certified payroll records to ensure contracting companies are following the laws and regulations that govern the industry.
The NYFFC’s compliance and monitoring work is done for the benefit of public bodies, as well as the taxpaying public. And its investigations serve to curb the corrupt act of underbidding and disenfranchising, not only for the individual Workers on a project, but also for taxpayers who expect a timely, safe and high quality end result.
By monitoring the bid process and submitting bid protests when necessary, the NYFFC acts as a pro-active watchdog. The NYFFC will then alert a public body that an apparent low bidder is currently on the New York State “debarred” list – which means when a contractor is on that list and is restricted from bidding for public works jobs.
With that said, the NYFFC also helps Workers prepare complaints to notify a regulatory agency where their complaint or complaints can be fully investigated.
“When (contractors) ‘aren’t playing by the rules – there is no level playing field,’” Candace Morrison, an Attorney who serves as Counsel to the NYFFC, told WNYLaborToday.com during a recent interview held at the organization’s offices in Hamburg, just south of Buffalo.
“We handle about two dozen complaints a year,” Morrison continued, adding the NYFFC looks at cases across New York after having morphed into a Statewide Organization in 2014. Before then, its mission was being a Western New York entity only. “Unfortunately, (unscrupulous) contractors ‘don’t just operate here in Western New York,’” she said.
In terms of Construction Workers caught in a desperate situation when it comes to wage theft and unsafe working conditions, Morrison said: “There is ‘fear.’ They’re ‘afraid’ (to take any action against their employer). Instead, (the NYFFC) is the ‘intermediary, without having to publicly identify’ (the Worker or Workers). The Employee ‘is not exposed’. We are their ‘lawyer.’”
And it would appear the NYFFC is already having an impact.
Case in point – in October, and as a result of a NYFFC investigation and a subsequent lawsuit, two Buffalo-area contractors and two owners were ordered to pay more than $3 million to settle false claims act allegations (See the U.S. Department of Justice press release at www.justice.gov/opa/pr/western-new-york-contractors-and-two-owners-pay-more-3-million-settle-false-claims-act).
Zoladz Construction Company Incorporated, Arsenal Contracting LLC and Alliance Contracting LLC, along with two owners – John Zoladz of Darien and David Lyons of Grand Island, agreed to pay the U.S. more than $3 million to settle allegations they violated the False Claims Act by improperly obtaining Federal set-aside contracts designated for Service-Disabled Veteran-Owned (SDVO) Small Businesses.
“Contracts are set aside for Service-Disabled Veteran-Owned Small Businesses so to afford Veterans with service-connected disabilities the opportunity to participate in Federal contracting and gain valuable experience to help them compete for future economic opportunities,” Acting Assistant Attorney General Chad Readler of the Justice Department’s Civil Division said in a press release. “Every time an ineligible contractor knowingly pursues and obtains such set-aside contracts, they are cheating American taxpayers at the expense of service-disabled Veterans.”
The settlement resolved a lawsuit – United States ex rel. Western New York Foundation for Fair Contracting, Inc. v. Arsenal Contracting, LLC, et al., Case No. 11-CV-0821(S) (W.D.N.Y.) – filed under the whistleblower provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims.
“We take a look at a situation and examine what the allegations ‘are based on,’” NYFFC Compliance Specialist Joe Suszczynski told WNYLaborToday.com. “If, for example, it is a ‘low bid’ – a ‘really low’ bid, ‘there can be wage checks’ through FOIA requests. We get certified payrolls ‘and match them up to determine any misclassifications’ (of job titles, which allows for wage theft). ‘If it raises enough questions,’ we contact the New York State Bureau of Public Works, which will ‘investigate and determine if there is the need to collect back pay.’ And, if a contractor ‘is found in violation, they can be debarred from bidding on public work for a period of five years’ – if it is found to be a ‘willful’ violation.”
Suszczynski knows his job well, having joined the NYFFC in 2011 after retiring from a 36-year career as an Investigator with the U.S. Department of Labor, Wage & Hour Division. He has extensive experience enforcing Federal Labor Laws, including the Davis-Bacon Act (the Federal Prevailing Wage Law).
Suszczynski has conducted investigations across 20 New York State Counties that are covered by the Buffalo Wage & Hour Office – and in the process, recovered thousands of dollars in back pay for hundreds of Workers who’ve been underpaid by their employers.
“You have to ‘believe in what you are doing,” Suszczynski told Your On-Line Labor Newspaper. “We have no ‘legal’ authority and we ‘can’t go on a work site,’ but ‘we can look into (the allegations and physically observe the worksite), conduct an investigation and pass the information on to authorities.’”
Also playing a key role at the NYFFC is Researcher Matt Kent, who continually monitors the bidding process of public works projects and helps advance the NYFFC’s pro-active advocacy agenda. Kent returned to his Western New York roots after spending 14 years in Washington, D.C., serving as a Federal Lobbying for the American Postal Workers Union (APWU), where he built and mobilized bipartisan Congressional coalitions in support of robust public services.
“It’s ‘gratifying,’” Kent told WNYLaborToday.com of the work that he does for the NYFFC. “And the NYFFC ‘is also engaged in providing preventative’ information, including our participation in a (recently-held) Local Government Conference. Even though it was the ‘last class of the day, there was very good attendance’ with about forty (participants). (Local Officials) ‘don’t realize how much power they hold on a project that impacts their’ community, their taxpayers and citizens.’ They’re ‘just looking at (securing) the lowest responsible’ bidder. They ‘usually don’t go further than that’ (in terms of looking a bit deeper into the history and track record of that chosen lowest responsible bidder).”
“(Public entities) ‘have an obligation.’ They ‘just can’t assume everything is being done right.’ ‘They have the right to ask for proof’ of (wages and benefits) payments. We ‘make them aware that they can do that.’ ‘They can ask for’ documentation,” Suszczynski added.
The NYFFC offers these complimentary services to contractors: Accurate and up-to-date wage rates and Worker Classification information and explanations of contractor rights and responsibilities – under the law. And, all services are confidential.
When it comes to Construction Workers, the NYFFC says Employees should be paid a pre-determined “prevailing wage” for all hours worked on a public work job. The wage rate is dependent on Worker Classification – such as a Carpenter, Laborer, Operator – and the New York State County where they are working.
Workers should also receive time and a half for all hours worked over 40 hours in a week. Construction Workers in New York State should also receive an overtime rate for all hours or portion of an hour worked over eight hours in a single twenty-four hour period, the NYFFC also pointed out.
Under New York State General Municipal Law, a State body has the right to award a contract to the lowest responsible bidder. Municipalities across New York have enacted responsible bidder laws that reinforce the legal obligation to award a contract to the company with both a low bid and a responsible compliance history. As such, the NYFFC provides support and guidance to municipalities wishing to enact a Responsible Bidder Ordinance, which it did with City Officials in Dunkirk, located in Chautauqua County – just south of Buffalo.
“The law doesn’t define ‘responsible’ bidder,” Morrison said. “We help them do the ‘preventative’ work.”
In regards to an unsafe workplace, it’s the U.S. Occupational Safety & Health Administration (OSHA) – the Federal Agency that’s responsible for setting, maintaining and enforcing workplace safety standards for all work places across the U.S. If a Worker believes there’s an OSHA violation at his or her workplace, Employees are asked to contact OSHA directly here in New York State, at 716-551-3053 in Buffalo, at 315-451-0808 in Syracuse and at 518-464-4338 in Albany. The NYFFC also provides assistance for those wanting to file an OSHA complaint.
Currently, the NYFCC gets its word out by publicizing its services through its web site (http://nyfaircontracting.org/) and on its Social Media Facebook Page (www.facebook.com/TheNewYorkFoundationForFairContracting/).
It also provides pamphlets, signage and other materials for interested public bodies and contractors to post, part of which reads:
We can only level the playing field by working together. If you are a contractor, public body or Worker and want to learn more about fair contracting, contact us at 716-627-4383. If you believe a construction contractor is not paying the correct wages or overtime, has an unsafe work site or is not performing a job right, contact us.Any contact will remain strictly confidential.
Read more on WNYLaborToday.com: http://www.wnylabortoday.com/news/2018/10/31/buffalo-and-western-new-york-labor-news/the-new-york-foundation-for-fair-contracting-providing-a-level-playing-field-when-it-comes-to-workers-public-bodies-business-owners-taxpayers-to-ensure-all-benefit/
Fair contracting benefits all New Yorkers: workers, tax payers, and business owners. As such, the New York Foundation for Fair Contracting (NYFFC) acts with, and in support of, New York workers, taxpayers, and responsible public works contractors. Together, we fight to ensure that our publicly funded infrastructure is strong, lasts for decades, and is completed efficiently and responsibly.
The New York Foundation for Fair Contracting helps “level the playing field” by supporting fair contracting across New York State. Fair contracting benefits all New Yorkers – workers, tax payers, and business owners alike. The NYFFC fights for strong, publicly funded infrastructure that lasts for decades that is also completed efficiently and responsibly.
All New Yorkers have a stake in responsible public works construction. Likewise, we can only level the playing field if we work together. If you are a contractor, public body, or worker and want to learn more about fair contracting, contact us.
If you believe a construction contractor is not paying the correct wages or overtime, has an unsafe work site, or is not performing a job right, contact us. Any contact will remain strictly confidential.
Buffalo, NY – On Tuesday, the Buffalo Common Council voted unanimously to strengthen the City’s Apprentice Law.
The New York Foundation for Fair Contracting (NYFFC) thanks the City of Buffalo for continuing to be a statewide leader on providing apprentice opportunities. The leadership of the Common Council over the past year, keeping a spotlight on upholding our promise to young workers, has made such progress possible.
“We look forward to a busy and productive construction season with this important legislation on the books,” said NYFFC Director Matt Kent.
The purpose of the Apprentice Law is to ensure taxpayer funded construction in Buffalo creates opportunity and job training for young people, city residents, and historically excluded minority and women workers. Robust and well-regulated apprenticeship programs promote a strong local construction industry, emphasize skilled work, and foster safe working conditions. Strong apprenticeship programs provide an on-ramp to fulfilling careers and are vital to train the next generation of Buffalo’s construction workforce. The reform harmonizes City of Buffalo and Erie County requirements for legitimate programs which graduate apprentices, creating uniformity for our local construction industry.
In recent years, the NYFFC has identified several City construction contractors violating the law. The new reform expands enforcement mechanisms available to the City when contractors unlawfully deny apprentices opportunities to perform public work. The City would be empowered to apply financial penalties, debarment, or determinations of non-responsibility for violating contractors; steps that ensure bad actors do not become repeat actors.
The New York Foundation for Fair Contracting is a watchdog non-profit established to level the playing field in public works construction for the benefit of taxpayers, upstanding contractors, and workers.
The New York State Department of Labor (NYS DOL) today announced that it has reached a $1,450,096 agreement with Miller Environmental to settle a failure to pay prevailing wages. In January 2020, the company was contracted by PSEG LI to address oil spills and soil contamination, conduct clean-up, and perform other work supporting utility installation. NYSDOL’s Bureau of Public Work received a complaint that employees of the contractor were not receiving the lawfully required prevailing wage.
“In New York State, we believe workers deserve a fair wage for a fair day’s work,” said New York State Department of Labor Commissioner Roberta Reardon. “Protecting workers is a top priority to the New York State Department of Labor. We remain vigilant to ensure that employers are properly compensating employees for the work that they do. We will never stop protecting the paychecks of hard-working New Yorkers.”
Prevailing wage is the pay rate set by law for work on public work projects. Per New York State Labor Law, contractors and subcontractors must pay the prevailing rate of wage and supplements to all workers under a public work contract based on the locality where the work is performed. Third parties contracted on behalf and for the benefit of a public entity are also subject to the prevailing wage requirements of NYS Labor Law Article 8. NYSDOL notified PSEG in 2015 that because it operates Long Island Power Authority’s (LIPA) electrical transmission and distribution infrastructure, its contracts–including those for reconstruction, maintenance, and repair of public works–are subject to those requirements.
NYSDOL investigators confirmed that Miller Environmental failed to bid the contract at prevailing rates and that PSEG LI failed to inform Miller Environmental that this contract involved public work. Miller Environmental ultimately reached an agreement with NYSDOL to pay 88 employees the full underpayment amount. Those payments were distributed in January and February of 2022.
NYSDOL continues to work aggressively to ensure businesses across New York State comply with prevailing wage requirements and is in the process of hiring over a dozen new public work wage investigators statewide to advance that mission. Over the past decade, DOL has recovered more than $360 million on behalf of approximately 330,000 workers.
To report prevailing work violations, email: email@example.com.
Monroe County and UNiCON Rochester have teamed up to support local workforce development in honor of National Apprenticeship Week.
In the Greater Rochester area, there are 15 local building and construction trade unions that provide apprenticeships where people receive classroom and on-the-job experience.
It’s something that Dave Young, the head of the Rochester Building and Construction Trades Council, says helped lift him and his family out of poverty.
“I remember when I was a younger person, before I was in an apprenticeship program. I had no health care, no idea how I’d retire. I’d have to go beg the boss for a ten or fifteen cent raise,” Young said. “I finally had an opportunity to get into an apprenticeship program and it was amazing.”
There will be an open house for educators to learn what construction trades can offer students. It’s at the United Brotherhood of Carpenters Rochester Training Center on Jetview Drive. That goes from 7:30 a.m. until 2:30 p.m. on Friday, November 16, 2018.
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.
The Manhattan DA’s office signalled a construction wage-theft crackdown in December last year, news site ConstructionDive reports.
In the biggest case so far, a luxury home builder called Parkside Construction was charged in May with defrauding more than 500 workers out of $1.7m by Manhattan prosecutors.
The DA claimed that Parkside had altered time-keeping records and paid workers through expenses to avoid payroll taxes.
Parkside is also accused of committing workers’ compensation insurance fraud totalling approximately $7.8m.
Outside New York City, ConstructionDive notes that in February, prosecutors in Orange County, California, charged a group of contractors with underpaying workers, and the resulting payroll taxes, to the tune of $200,000.
It seems prosecutors in New York and California are leading the way for other states by viewing wage violations as crimes.
“Companies take criminal cases more seriously. If you’re an executive and the cops come to your door, you don’t soon forget it,” said Rena Steinzor, a University of Maryland professor who wrote a book about corporate criminal prosecutions, in an interview on the topic with Bloomberg Law, which has also picked up on the trend.
Prosecutors are also beginning to “bundle” underpaying investigations with wider look at a company’s practices, including health and safety and tax compliance.
“If a bad actor is doing something dishonest in one area of the business, there’s often a common theme of dishonesty across the board,” said Manhattan assistant DA, Diana Florence, to Bloomberg Law.