Shortchanged: An in-depth look at wage theft
The U.S. Department of Labor found more than 5,500 violations of the Fair Labor Standards Act by employers in Minneapolis between 2005 and 2014, according to Centro de Trabajadores Unidos en la Lucha (CTUL, The Center of Workers United in Struggle).
“We have wage and hour laws being broken with impunity,” said CTUL Organizer Terin Mayer. “A lot of homeowners don’t even know this.”
Mayer said it’s common for bonded and licensed general contractors to turn over work to subcontractors, who may in turn also hire subcontractors.
“The amount of money starts diminishing, and the amount of risk and responsibility gets pushed down to the workers at the bottom of the chain,” he said.
Attorney Justin Cummins, who handles wage theft cases, recommends asking general contractors pointed questions: Are workers on the job classified as employees or independent contractors?
“If they are independent contractors, you can virtually guarantee there is going to be a problem,” he said.
Employees misclassified as independent contractors are often denied minimum wage, overtime pay, family and medical leave and unemployment insurance, according to the U.S. Department of Labor. According to the Minnesota Department of Labor, an individual is only an independent contractor if they maintain an independent office and equipment, file self-employment tax returns with the IRS, and operate a business dependent on business receipts and expenditures.
Cummins recommends asking contractors other pointed questions as well: Do you comply with wage and hour laws? Do you comply with Occupational Safety and Health Administration regulations? Do you pay overtime rates?
“They can lie to you, but asking the question is a start,” Cummins said.
He said homeowners can get a feel for the business based on the response, and they can set the expectation that workers are paid fairly.
Peter Jaworski, business manager at Roofers & Waterproofers Local 96, suggests calling the Better Business Bureau to see a report on the contractor. He also suggests talking to workers on the job, and asking people who know the industry about specific contractors.
The Minnesota Department of Labor and Industry offers the following recommendations.
Before hiring a contractor:
— Ask for the contractor’s license number, and contact (651) 284-5069 or 1-800-342-5354 to verify the builder is currently licensed and find any disciplinary history. The status of a contractor’s license can also be verified at secure.doli.state.mn.us/lookup/licensing.aspx.
— Ask for references and check in with former customers
— Check the contractor’s litigation history on the state court system’s website at pa.courts.state.mn.us/default.aspx.
Avoid contractors that:
— Arrive in an unmarked truck or van
— Appear to be willing to do the job at an unusually low price
— Provide only a post office box as a business address
— Refuse to provide a license number issued by the state of Minnesota
— Use high-pressure sales tactics