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States Recover $6.9M for Pay Violations

Monday, September 14, 2015

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Two New England states are taking a stance and cracking down on employers who violate state and federal labor wage laws.

In separate statements sent during the first week of September, Rhode Island Gov. Gina M. Raimodo and Connecticut Gov. Dannel P. Malloy said their states recently had recovered nearly $6.9 million in combined back wages for employees who were paid unfairly.

“Everyone should be able to make it in Rhode Island, and workers should get a fair day’s pay for a fair day’s work,” said Raimodo in her state’s Sept. 1 statement.

©iStock.com /  Zerbor

Rhode Island’s new Workplace Fraud Unit recovered $730,000 in back wages, interest and penalties from Cardoso Consulting LLC, which misclassified its workers on a drywall job.

The Connecticut governor echoed Raimodo’s sentiments.

“The working women and men who are the backbone of our state should get paid for the jobs they do and receive the wages they rightfully earn,” said Malloy in a Sept. 6 statement from his office.

New Rhode Island Task Force

In the case of Rhode Island, the state made its recovery from its new Workplace Fraud Unit within the Department of Labor and Train’s (DLT) Workplace Regulation and Safety division. In the unit’s first “significant” action, the state reached a settlement with Cardoso Construction LLC for $730,000 in back wages, interest and penalties, the statement said.

“We’re going to go after companies that cheat because breaking the law not only hurts workers, it also hurts companies that follow the rules, pay proper wages and help grow the Rhode Island economy,” said Raimondo.

Rhode Island’s DLT discovered the violation after Cardoso was hired for a drywall job at the University of Rhode Island, according to the statement. Officials eventually determined that the company should have characterized its workers as “employees” when it had said they were “independent contractors.”

The difference, the state said, is that independent contractors do not have the same rights and privileges as employees. For example, independent contractors are not eligible to receive unemployment insurance compensation if they are laid off from work.

Cardoso will pay $351,812 in back wages; pay DLT a matching penalty; and pay a fine of $27,000, which is equal to $1,000 for each worker the company misclassified.

Girard R. Visconti, Cardoso’s lawyer, told the Providence Journal that he agrees with the governor’s position on holding cheaters accountable. But he also said Cardoso had “come to the plate” in agreeing to pay all back wages over the next five years.

According to the daily paper, Visconti said his client asked workers to take less during an economic downturn.

“Ignorance is no excuse, but he thought he could do it,” said Visconti. “To me, he’s a hero because he had a choice between going into receivership ... or keeping the company going.”

Connecticut Recovery

Meanwhile, the Connecticut governor was congratulating his state’s Department of Labor’s (DOL) Wage and Workplace Standards Division for recovering more than $6 million during the past fiscal year.

©iStock.com /  DNY59

From fiscal year July 2014-June 2015, Connecticut returned $6.1 million to workers who were not paid correctly, including $1.6 million for construction workers at public contract sites.

From FY July 2014-June 2015, the state returned $6,136,111.56 to workers who were not paid correctly in the first place. That includes nearly $1.55 million recovered by wage enforcement staff who responded to 2,337 complaints about wages being unpaid. It also includes $788,000 to compensate employees who did not receive the required minimum wage or overtime pay and $1.6 million for workers who were not paid the correct amount while working at public contract construction sites.

The state’s DOL also investigated 253 cases involving labor law violations and issued citations to employers for those infractions, the statement said. Connecticut also issued 164 stop work orders to employers that did not comply with the state’s wage and worker’s compensation requirements, and issued citations to employers during those investigations.

“The mission of our Wage and Workplace Standards Division is to meet the needs of Connecticut’s workforce and strengthen knowledge of the state’s labor laws,” said Sharon M. Palmer, who is the state’s Labor Commissioner, in the Sept. 6 statement.

“As a result, education and outreach to workers and employers is just as vital as our enforcement efforts.”

The state offers employers and workers information about their rights and responsibilities regarding state and federal labor laws on its DOL website’s Wage Laws and Workplace Safety page, according to the statement.

   

Tagged categories: Construction; Contractors; Department of Labor; Government; Government contracts; Labor

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