New York officials charge construction companies with wage theft

The constructions companies reportedly bounced checks, paid hourly rates that did not meet the prevailing wage, refused to compensate workers for overtime or simply did not pay workers at all.

Manhattan District Attorney Cyrus R. Vance Jr. announced last week that he and officials in surrounding New York counties have charged area construction companies and their owners with stealing more than $2.5 million in wages from more than 400 construction workers, according to www.constructiondive.com. The amount of wage theft per construction company ranged from $13,000 to $700,000.

Officials said immigrant workers, who often are hired as day laborers or through other casual means, are three times more likely to be victims of wage theft and tend not to report it because of language barriers or because they fear retaliation because of their illegal status. Immigrant worker advocates say the New York City construction boom during the past few years has led to more opportunities for contractors to commit wage theft and fraud.

Vance's office formed the Construction Fraud Task Force in 2015 after 22-year-old immigrant construction worker Carlos Moncayo died in a trench collapse while working at a Manhattan job site. The task force investigates safety hazards and construction-related fraud such as intentional nonpayment of prevailing wages, union benefits and workers' compensation premiums.

Wage theft reaches outside the scope of New York City. The Texas-based Workers Defense Project interviewed construction workers in six cities in five southern states and discovered that 57 percent earned less than $15 per hour and didn't receive benefits.

Nonprofit workers' advocacy group Polaris reported that misclassification of employees as independent contractors also is an issue in the U.S. When workers are categorized as independent contractors, construction companies do not pay into Social Security or Medicare on their behalf and do not typically pay overtime rates or provide unemployment benefits, workers' compensation or health insurance coverage.ated General Contractors of America (AGC). "With unemployment so low overall and in construction, contractors are likely to have increasing trouble filling many types of hourly craft and salaried openings."

Construction employment totaled 6.955 million in November, an increase of 24,000 from October and 184,000, or 2.7 percent, from November 2016.

AGC officials say tight margins are keeping firms from paying even more to attract hard-to-find workers, noting that efforts to cut tax rates should help lead to higher average hourly earnings for the construction sector.

Residential construction added 14,800 jobs in November and 85,900 jobs, or an increase of 3.2 percent, during the past 12 months. Nonresidential construction added 8,600 jobs in November and 97,700 jobs, or an increase of 2.4 percent, during the past 12 months.

The number of unemployed jobseekers with recent construction experience fell to 467,000 in November from 517,000 in November 2016, and the unemployment rate in construction dropped to 5 percent in November from 5.7 percent a year earlier. Simonson says the declines show how difficult it has become for the industry to find experienced workers.

Editor’s note: This article first appeared on the NRCA website and can be viewed here.