Investigations find Utah construction workers underpaid by nearly $2M

SALT LAKE CITY — For construction workers, every dollar is hard-earned. Harder still is accepting that their employers cheated them out of earned wages by violating their rights. With the help of the U.S. Department of Labor's Wage and Hour Division, more than 2,700 Utah construction workers are getting the wages they deserve.

Between October 2013 and March 2015, the division found employers owed these workers more than $1.8 million dollars in back wages. Violations of the Fair Labor Standards Act varied, but many involved employers misclassifying employees as independent contractors to avoid paying overtime, important benefits and payroll taxes.

"When workers are misclassified as independent contractors — a common practice in the construction industry — they lose out on legally entitled wages and benefits, including workers' compensation if they're hurt on-the-job, and unemployment insurance if they're laid off," said Dr. David Weil, administrator for the Wage and Hour Division.

"Misclassification results in less payroll-tax revenue for federal and state governments and an unfair playing field as law-abiding competitors are underbid for work. Businesses that play by the rules and classify their workers as employees see important benefits, including reduced turnover and training costs and improved productivity," Weil added.

The division's Salt Lake City District Office continues an enforcement initiative that focuses on both misclassification and federally funded construction projects where the Davis-Bacon and Related Acts apply.

Some of its most recent and notable investigations include:

• The recovery of $700,000 in back wages, damages, penalties and other guarantees for more than 1,000 construction industry workers through the combined effort of the department, U.S. Department of Justice and the state of Utah. The effort led to consent judgments against 16 defendants in Utah and Arizona — operating collectively as CSG Workforce Partners in Provo; Universal Contracting LLC in American Fork; and Arizona Tract/Arizona CLA in Phoenix, who attempted to claim their workers were members of limited liability companies and not employees.
• The recovery of $35,590 in back wages and liquidated damages for 21 employees of federal contractor RAM Electric Inc. in Sandy. The company violated the DBRA by paying its electricians as apprentices when it did not have a bona fide apprenticeship program, and failed to pay the legally required hourly rate and fringe benefits to six employees. The company also failed to pay overtime at the correct rate to 15 employees.

For more information about federal wage laws, or to file a complaint, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243) or its Salt Lake City District Office at 801-524-5706. Information also is available at http://www.dol.gov/whd/.