WFAA News 8 TV in Dallas/Fort Worth aired an investigative report last night by David Schecter about the plight of worker misclassification in the Texas construction industry, and the lack of law enforcement by local and state entities.

Mansfield Independent School District’s $39 million Center for the Performing Arts currently under construction contracted with AB Rebar for part of the project.  Owner Macario Mireles was able to offer the lowest bid for the work because he pays his employees as independent contractors and does not pay payroll taxes, unemployment tax, or workers’ compensation insurance on behalf of them.   Read more » about Investigation Reveals School Construction’s Worker Misclassification

Last March, Construction Citizen covered a protest held by workers who had been cheated out of wages by Carole Johnson Builders LLC, a subcontractor on a Houston construction project.  We were able to interview of one of the foreman who had worked for the subcontractor on the project and who had not been able to collect the wages he was owed.

Bobby Herndon worked for Carole Johnson Builders LLC and was told that he would be paid wages by the hour.  He was not paid overtime for the hours he worked each week over 40, and in fact the Carole Johnson Builders LLC did not even pay for all of the hours Herndon worked.  When asked how much money he was still owed of the money he had earned, the pain and hurt from the injustice is evident in the following video as he answers “twenty-four hundred dollars.”   Read more » about Interview with Houston Wage Theft Victim

Owners, developers and contractors have a new critical issue to add to their list of concerns about the hiring of illegal labor on their projects – human trafficking victims.

We were alerted to the seriousness of the issue by Brandon Darby, a subcontractor and human rights activist who has been investigating human trafficking in the U.S., its impact on the construction industry and its toll on human lives.  Darby is best known for his work with law enforcement agencies on anti-terror issues.  We followed up with Darby and asked him a few questions.

Why did you contact Construction Citizen about this issue?

“When I found Construction Citizen and realized that many construction industry organizations and leaders are working to hold their own industry accountable, I wanted to alert them to another issue that exists in our industry, one that is undermining the image and future of the industry, the issue of human trafficking and slave labor in construction.”    Read more » about Slavery on Your Construction Site?

A recent decision following an investigation by the New Orleans District Office Wage and Hour Division of the US Department of Labor tied a Louisiana general contractor to the employment of drywall installers hired by a subcontractor for work on several residential and commercial projects.  The workers were misclassified as independent contractors and denied overtime wages for the time they worked each week over 40 hours.  The subcontractor, Escapade Acoustic Drywall from Lafayette, and the general contractor, Lloyd N. Moreau LLC of Pineville were found to have a joint employment relationship and are both being held responsible for the workers’ back wages.

A press release from the US Department of Labor earlier this month explains the problem with the growing practice of worker misclassification / payroll fraud.

“The practice is a serious threat both to workers entitled to good, safe jobs, and employers who obey the law. Too often workers are deprived of overtime and minimum wages, and forced to pay taxes that their employers are legally obligated to pay. Honest employers have a difficult time competing against scofflaws.”   Read more » about Contractor Found to be Equally Responsible for Sub’s Hiring Fraud

Houston business owner Lowell Daniel offers contracting services in landscaping, irrigation, and drainage.  He has heard horror stories from some of the workers he has employed about the mistreatment and wage theft that they have suffered from other contractors while trying to earn a living for themselves and for their families.

Disturbed by the injustice some of these workers had faced, Mr. Daniel attempted to “call out” some of the dishonest contractors by informing the customers who had hired them that those contractors had not paid the workers who actually performed the work for the customers.  Daniel explained that the workers had agreed to do the grueling work for a lower fee than many workers would require, and that they were not even paid that lower amount.   Read more » about Wage Theft Woes in Houston

Tompkins County Workers’ Center in Ithaca, New York offers a Living Wage Employer Certification for businesses who wish to publically commit to certain criteria regarding the treatment and compensation of their employees.  The employers agree to pay at least $11.67 per hour (or the current Tompkins County Living Wage rate) to all regular employees, offer them partially paid health insurance, and be free of health and safety violations.

The Workers’ Center website points out that the benefit to employers goes beyond just knowing that they are “doing the right thing”.  The website affirms:

“By paying your employees fairly, you take advantage of the service/profit cycle. When you invest in staff rewards, both tangible and intangible, their satisfaction Read more » about New York Employers Encouraged to Exhibit Integrity

Kim Bobo, founder and executive director of Interfaith Worker Justice, talked with Construction Citizen blogger Jim Kollaer during her recent visit to Houston.  Kollaer asked her about the upcoming second edition of her book Wage Theft in America: Why Millions of Working Americans are Not Getting Paid – and What We Can Do About It.  The new addition will include a chapter about ethical businesses to demonstrate that even in industries like construction where everyone is struggling to survive the current economic downturn, there are still ethical employers who are doing the right thing.  There is a new chapter about payroll fraud (also called worker misclassification and workplace fraud) which is the illegal practice where employers pay their workers as independent contractors instead of as employees.  Two new chapters focus on state and local efforts to enforce wage theft laws and penalize violators.   Read more » about Interview with Nationally Recognized Labor Activist Kim Bobo

Last month YouthBuild Houston and HoustonWorks teamed up with Houston Habitat for Humanity to participate in the Hands on Housing Block Party where volunteers worked to replace a broken garage and perform other home repairs, remove debris and plant flowers for an elderly resident in Jacinto City, Texas.  In honor of Earth Day, the materials used were donated recycled materials.

HoustonWorks is a non-profit organization which administers federally funded workforce programs in Houston, offering services such as job training and placement, consulting, summer job programs Read more » about Community Service and Craft Training – Benefits of YouthBuild

Today was Tax Day for millions of Americans, but not for some in our industry.  The current situation with our broken immigration system and the smuggling of workers into the country across our open borders; the “cash” and underground economy in the construction industry; and those contractors and owners who tolerate and turn a “blind eye” to the misclassification and wage theft happening on the construction sites of their buildings have created a situation where the tension in the industry and in the economy is rising to a boiling point.

This week, thousands of construction workers will be paid as independent contractors and in the process, their bosses will avoid reporting or paying any taxes on their behalf.  They in turn, will pay no federal income taxes.  In a number of cases, those contractors paying cash will even refuse to pay the workers even the monies that they are due, not to mention the taxes that should be withheld, reported and paid.   Read more » about Tax Day In America

Previously we told you about a lecture at Texas A&M University about Ethical Dilemmas in Construction Industry Labor Practices.  Following the February 1 lecture, Professor Joe Horlen, department head of the Department of Construction Science at the university, distributed questions to students to help them choose a topic for a blog post, and Stan Marek agreed to provide an award to the student with the best submission.  Professor Horlen chose Scott Beatty’s composition from among those received, and we are pleased to post his winning entry here.

I am a Construction Science student at Texas A&M University.  Through class discussions and Stan Marek’s lecture, I have been made aware of several ethical issues that face the construction industry; one of which is the sustainability of the workforce that is currently employed as labor.   Read more » about An Unsustainable Workforce