Fraudulent Payrolls, Shady Unemployment, and a Dodgy Employer

Dear Compliance Man,

My husband and many of his coworkers are not getting paid the prevailing wage as required on state projects. The owner of the company also fraudulently fills out certified payrolls, which as you know are required on these projects. My husband has been collecting unemployment for months, as are many others at the company, but still getting paid under the table by the owner. Many of my husbands “paychecks” bounce for his under the table work.

This has been going on for years, and while we realize that we weren’t doing the right thing by working and accepting these checks while collecting unemployment it has now gotten to the point where it needs to be exposed.We just want to survive as a family.

I’m 100% certain that when you interview the workers, all these issues will be found to be accurate. I hesitate to sign this letter because of the owner’s volatile temper and repercussions that may happen should I become involved.

–Had It

Dear Had It,

First of all, thanks so much for being brave and honest enough to come forward. This obviously wasn’t an easy letter for you to write.

Now for the good news. The state of Massachusetts has begun to crackdown on employers, like your husband’s, who skirt the law through various “off the books” schemes. A new anonymous tip-line (1-877-627-7233) has been set up to help workers report fraud at their workplaces, and a tough new state law will entitle workers who’ve been underpaid or denied overtime to triple damages paid by their employers. You’ve done your part by alerting authorities to what sounds like a serious case of workplace fraud.

For more commonly asked Compliance Man questions, visit the Compliance Man archives. Send your question to info@ffcm.org.

Tax Time Means 1099 Kinds of Trouble

Dear Compliance Man,

My boss tells me we are in a “contracting relationship,” in which he “subcontracts” my laboring for his construction business. Trouble is, I have a hunch that I’ve been left holding the tax bag. It sure seems strange to say I’m in business for myself. Last I checked, he’s calling the shots.

– “Holding the Bag” in Boxboro

Dear Boxboro,

If you get a 1099 in the mail, it means that your boss hasn’t been withholding money from your paycheck in order to pay taxes. In the worst case situation, you could end up with a huge tax bill come April 15th.

But before you sell your house or pawn your dog, it’s important to find out if you really are an independent contractor. As the IRS explains, the issue is very complicated – what else is new! The good news, though, is that as a construction worker, unless you have your own business, you are almost always an employee – not an independent contractor.

Does your boss tell you what to do or how to do it? If you are told how, when, or where to do the work, what tools or equipment to use, or where to purchase supplies and services, you’re probably an employee. Have your received on-the-job-training? This indicates that your boss wants the work done a certain way, and that you are probably an employee.

If you need help figuring out your status, call the Foundation for Fair Contracting at 1-877-507-3247, or call the IRS at 1-800-829-1040 and ask for a form SS-8. And if the IRS finds out that your boss misclassified you? Well, then it’s up to your boss to pick up the bill. So check your status before you write that check.

For more commonly asked Compliance Man questions, visit the Compliance Man archives. Send your question to info@ffcm.org.

What’s the Formula for Filing a Complaint?

Dear Compliance Man,

I would like to know how to go about filing a complaint about an employer. I recently learned about a landscaping firm that hires mostly Spanish-speaking workers, many of whom are not aware of prevailing wage requirements. Some of them have worked for the firm for several years, but make only $9-$10 per hour. Because I work with a corporation that does all public work, I am very familiar with state and federal wage laws. What can I do to file a complaint so this can be investigated?

– Concerned in Quincy

Dear Quincy,

Without hearing directly from the workers you mention, there is still quite a bit that can be done to expose this fraud being committed at the expense of the public and the workers themselves.

First of all, I’d like to remind you that in addition to the e-mail you sent, you can call us directly on our fully confidential hotline: 1-877-507-3247. Anytime you (or any construction worker) would like to chat, leave a message – the Foundation for Fair Contracting won’t forget you.

Because the jobs you describe here are public, the contractor has a number of contractual obligations, including submitting payroll records. Once we’ve gathered the necessary evidence, the FFCM is not shy about filing complaints with the Fair Labor and Business Practices Division. The Foundation works directly with you, at no cost, to see that justice is done. And tip-offs like yours are always welcome. For more info on this subject, see the Compliance Man story Fraudulent Payrolls, Shady Unemployment and a Dodgy Employer.

For more commonly asked Compliance Man questions, visit the Compliance Man archives. Send your question to info@ffcm.org.

Electrician’s Wage for Electrician’s Work; Everything Else is Exempt?

Dear Compliance Man,

My buddy and I have spent most of the last year doing electrical work as part of a big school renovation project. Everything was going fine until we got near the end of the project and switched over from wiring to installing equipment like flat-paneled TVs, sound systems. When we noticed that our paychecks were smaller, we approached him and were told that we don’t get the electrician’s rate anymore because we’re done with the electrical work. Is this really true?

–Wired Out West

Dear Wired,

The short answer to your question is ‘no.’

Unfortunately, in my years answering questions from construction workers, I’ve encountered too many examples of just what you’ve described. And while contractors typically blame confusion over prevailing wage laws, the mistake seems to always result in the worker being paid less than what he or she is owed. Roofers, for example, are still roofers even if they’re moving up and down the ladder or hauling equipment to the roof site.

In your case, the rate you receive is based on the collective bargaining agreement that covers your particular trade. In other words, while the specifics of your job may change from day to day, you remain an electrician throughout and that’s the rate at which you should be paid.

The good news is that you’re most likely entitled to back pay—and the FFCM would be happy to help you get it. Give us a call at 1-877-507-3247, email us at info@ffcm.org, or fill out this electronic form.

For more commonly asked Compliance Man questions, visit the Compliance Man archives. Send your question to info@ffcm.org.

What Exactly is the FFCM and What Can It Do For Me?

Dear Compliance Man,

I recently received a letter from you people in the mail. It had my name, the company I’ve been working for and the project we’re working on. Then it had the amount of money I guess I’m supposed to be making, but what I am getting is a lot less than that. So I have two questions. First of all, how did you get my name, and second, how do I get the amount of money that I should be getting?

–Real confused in Reading

Dear Reading:

Thanks for writing! The Foundation For Fair Contracting of Massachusetts sends out tens of thousands of letters like the one you describe to workers just like you.

State law requires that contractors who get public money to work on construction projects—roads, libraries, schools, fire stations, etc—submit payroll records to the cities and towns that employ them. These records include your name and the amount that your employer says that you’re earning. In our capacity as a ‘watchdog’ group, we show you that number so you can check it against what you’re really making—the amount that shows up on your paycheck each week.

Now, for the second part of your question. If there is a difference between your personal bottom line and what your boss says you’re making, you’ll want to file a complaint with the Attorney General’s office.

For more information on how to do just that, give us a call at 1-877-507-3247, email us at info@ffcm.org, or fill out this electronic form.

For more commonly asked Compliance Man questions, visit the Compliance Man archives. Send your question to info@ffcm.org.

Payments Are Perpetually Late

Dear Compliance Man:

My boss has a habit of paying us late. Is there anything we can do?

–Overdue in Otis

Dear Overdue:

Your boss may be late with the checks, but he’s on time when it comes to breaking the law.

Under Massachusetts law, late payment of wages is NOT allowed. Chapter 149, Section 148 of the state’s general code says that workers like you MUST be paid every two weeks. Employers who fail to deliver the checks on time are breaking the law and can be sued for back wages.

If you think you may have a case, call us at  1-877-507-3247, email us at info@ffcm.org, or fill out this electronic form. It’s free and confidential.

For more commonly asked Compliance Man questions, visit the Compliance Man archives. Send your question to info@ffcm.org.

 

Compliance Man FAQs

In every Wage Watch issue, Compliance Man answers your questions about your rights as a public construction worker. And plenty of questions there are—I get letters, phone calls and e-mails from workers just like you almost every day.

While I love hearing from you (keep the questions coming!), many of the queries are very similar. So this issue, I’ve revisit some of the topics that seem to come up over and over again. Here’s a look:

“What is the FFCM and why are you sending me a letter?”

The FFCM monitors public construction projects all over the state, making sure that contractors who receive public money are paying their workers the prevailing wage. The Foundation for Fair Contracting sends out thousands of letters a year to public construction workers, informing them of what they are entitled to.

“So does that mean that my employer is cheating me?”

Look carefully at the letter and you’ll notice that we have included information about the rate recorded by your employer and other important issues like job classifications and overtime. Check the information in the letter against your pay stub. If things don’t match, there may be a problem.

“My boss is paying me less than the prevailing wage. Is there anything I can do?”

Yes! The FFCM is here to help you get back any money that you might be owed and works with the Attorney General’s office to make contractors like yours aware of their legal obligations to their employees. Our monitors will help you determine how much money you’re owed and assist you in filing a claim with the AG’s office.

One guarantee: the key to a strong case lies in good record keeping. If you think that you are being cheated on the job, start keeping track of the work you’re doing and how much you’re being paid for it ASAP. We can send you a logbook to help you keep track.

“I’m worried that there is something fishy going on with my pension plan—but my employer discourages me from asking questions.”

Under federal law, your employer is required to provide you with a copy of what’s called the Summary Plan Description (SPD), including information on what your plan provides and how it operates. You are also entitled to receive annual financial reports, individual benefit statements and other pension-related documents. Failure to provide such information could result in a penalty for your employer.

If you have pension problems, give us a call at  1-877-507-3247, email us at info@ffcm.org, or fill out this electronic form

For more commonly asked Compliance Man questions, visit the Compliance Man archives. Send your question to info@ffcm.org.

Does the Prevailing Wage Pertain To Me?

Dear Compliance Man,

Where does the “prevailing wage” come from and how do I know if it applies to me?

-Paulo in Fall River, MA

Dear Paulo,

There is a long answer to your question and I won’t bore you with details here (Give me a call if you want the full run-down). The prevailing wage rate is set in advance by the state for each individual project, even before the ground is broken. If you’re working on a federal job, then it’s the US Department of Labor that sets the rate.

As you probably know, the rate is set differently for different trades: crane operators, electricians, laborers, painters, etc., and is set to increase in increments, often over the life of the project. Contractors are required by law to post the rates on the job site; the rates can also be found in the “specs” or contract that the Clerk of the Works has.

As far as how to tell if your job is a “rate job” (“prevailing wage project”), ask yourself:  is this a “public project”? Is it owned by, say, a city or town, or maybe the highway department? Or is it a privately-owned or commercial enterprise?

Remember: the general contractor may be a private company, but as long as they are working to build something for the public, with few exceptions, the rate applies. It all comes down to ownership. Acme Inc. may build it, but they won’t run it after they hand it over to say, New Bedford or Holyoke or the state. Still not sure? Just call us and we’ll help you know for sure. We can probably tell you what the rate is, as well.

For free, confidential information about your rights as a construction worker, call the Foundation for Fair Contracting today at 1-877-507-3247, email us at info@ffcm.org, or fill out this electronic form.

For more commonly asked Compliance Man questions, visit the Compliance Man archives. Send your question to info@ffcm.org.

Often Owned Overtime

Dear Compliance Man:

My husband works for a small construction company in Western Massachusetts. He gets several different rates of pay, depending on the job, but his base pay is lower. My question is about his overtime.

His employer will only pay him “straight time” not time and a half. Also, this pay is paid cash, and not regularly. Instead of receiving weekly overtime pay, it accumulates until my husband asks for some of his overtime pay. Then the boss will include a couple hundred dollars in his paycheck envelope. They are not offering us an accounting of how many overtime hours he has accumulated, what has been paid, etc., even though I’ve asked for it. Financially this is difficult for us—we certainly could use the money weekly, not just when we get desperate and need to ask for it. The boss claims we are “better off” receiving the money as cash, but I’m not so sure.

–Frustrated and barely making ends meet

 

Dear Frustrated:

It sounds like you have every right to feel frustrated! If your husband’s boss only paid him when he felt like it, that would be a clear violation of state and federal laws. His overtime shenanigans aren’t legal either.

Overtime is calculated on a weekly basis and is triggered when an employee works over 40 hours that week. Employees must be paid in full, including overtime, within six days of the end of the pay period. That means that any time your husband works more than 40 hours in a single week, his next pay check must reflect that.

As for being paid in cash, his employer is within the law on this one, but he is required to give you the accounting you asked for. Whether payment is made via cash or check (promissory notes or IOUs aren’t legal), it must be accompanied by a list of hours worked including overtime, hourly rate and any deductions that have been taken out. Our state and federal governments enacted these worker protections in order that workers like your husband would be “better off.”

The most important thing that your husband can do is keep track of exactly how many hours he’s working, regular and overtime, and at what rate. If he concludes that his boss is underpaying him, then it may be time to consider filing a claim with the Attorney General’s office. The FFCM will gladly help him with this (we’re sending along a log book that your husband may find helpful), and will also be happy to provide his employer with a little refresher course on the law.

Thanks for writing!

For more commonly asked Compliance Man questions, visit the Compliance Man archives. Send your question to info@ffcm.org.

Long on Hours, Short on Pay

Dear Compliance Man,

I worked construction last year on a public job and I’m pretty sure I got paid less than what I was supposed to be getting. If I’m right and my former boss owes me money, how do I get it back? What happens to him if it turns out that he was breaking the law?

–Shortchanged in Somerset

Dear Shortchanged,

You’ve come to the right place! If you suspect that you’ve been paid less than the prevailing wage on a public job, the Foundation for Fair Contracting can help. Contact us by phone, email, letter or fax. We’ll discuss your complaint with you and send you the form and information you need to start the process.

Using whatever information we receive from you and the additional documents we’ve collected, we’ll help you assemble as complete a complaint as possible for transmittal to the state enforcement agency – the Office of the Attorney General. Their Fair Labor Practices Division will assign an investigator to your case who’ll determine whether and just how much money you’re owed. Your investigator might also contact you for additional information. The Attorney General will notify you of the outcome. You can contact the Foundation at any time during the investigation process for updates. The Attorney General may also issue a citation and additional penalties against your former employer.

How long does the process take? This often depends on how clearly you’re able to document your case. And the sooner you get started, the sooner you’re likely to get the money you are owed!

REMEMBER:  Always keep a log of all your jobs – hours worked, work performed, wage rates – and your pay stubs so that if you need to file a complaint, you’ll have the records you need! We’ll be happy to send you one of our Log Books; just call 1-877-507-3247, email us at info@ffcm.org, or fill out this electronic form.

For more commonly asked Compliance Man questions, visit the Compliance Man archives. Send your question to info@ffcm.org.