Contractors and Subcontractors can obtain information on payments made by the Department of General Services to prime contractors
in the District of Columbia by clicking here
in VIRGINIA, click here
Contractors and Subcontractors can obtain information on payments made by the Department of General Services to prime contractors
in the District of Columbia by clicking here
in VIRGINIA, click here
November 14, 2018
Amazon HQ2 decision: Amazon splits prize between Crystal City and New York
What might happen if Amazon moves to your city?
Will Amazon’s HQ2 be a good neighbor or a nightmare? (Daron Taylor/The Washington Post)
November 13 at 12:03 PM
Amazon will open major new outposts in Northern Virginia’s Crystal City and in New York City, splitting its much-sought investment of up to 50,000 jobs between the two East Coast sites, the company announced Tuesday.
“We are excited to build new headquarters in New York City and Northern Virginia,” Amazon founder and CEO Jeffrey P. Bezos said in a statement. “These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come. The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities.”
The company also announced that it has selected Nashville for 5,000 jobs as part of a new Center of Excellence for its Operations business, which is responsible for the company’s customer fulfillment, transportation, supply chain and similar activities.
The choice of Crystal City in Arlington County as one of the winners cements Northern Virginia’s reputation as a magnet for business and will potentially reshape the Washington region into an eastern outpost of Silicon Valley over the next decade.
After Budget Cuts, the IRS’s Work Against Tax Cheats is Facing “Collapse”
October 1, 2018
The following are excerpts from the article:
Last year, the IRS’s criminal division brought 795 cases in which tax fraud was the primary crime, a decline of almost a quarter since 2010. “That is a startling number,” Don Fort, the chief of criminal investigations for the IRS, acknowledged at an NYU tax conference in June.
Bringing cases against people who evade taxes on legal income is central to the revenue service’s mission. In addition to recouping lost revenue, such cases are supposed “to influence taxpayer behavior for the hundreds of millions of American citizens filing tax returns,” Fort said. With fewer cases, experts fear, Americans will get the message that it’s all right to break the law.
“Due to budget cuts, attrition and a shift in focus, there’s been a collapse in the commitment to take on tax fraud,” said Chuck Pine, who used to be the third-ranking criminal enforcement officer at the IRS and is now a managing director at BDO Consulting. “I believe there are thousands of individuals who have U.S. tax obligations and are not complying with U.S. tax laws.”
The result is huge losses for the government. Business owners don’t pay $125 billion in taxes each year that they owe, according to IRS estimates. That’s enough to finance the departments of State, Energy and Homeland Security, with NASA tossed in for good measure. Unlike wage earners who have their income separately reported to the IRS, business owners are often on the honor system.
But the rate at which the agency audits tax returns has plummeted by 42 percent since the budget cuts started. Criminal referrals were always rare and are becoming rarer still, dropping from 589 referrals in 2012 to 328 in 2016. With the government conducting 1.2 million audits in 2016, that’s one criminal referral for roughly every 3,600 audits.
In addition, current and former IRS agents say that audits are not as intensive as they used to be. Because the IRS pushes agents to close audits more quickly, they make fewer requests for records and interviews.
Budget cuts have diminished the criminal investigation division, trimming the number of agents by a fifth since 2010. Recently, the IRS closed four of its 25 field offices, according to Fort. In New York state, home of the country’s financial industry, the revenue service is down to 161 agents, about a hundred fewer than it had 15 years ago.
Representative of the General President
United Brotherhood of Carpenters
and Joiners of America
101 Constitution Ave., NW
Washington, DC 20001
mobile: (203) 231-0398
This story has been updated with a statement from Reuter Walton.
Yesterday local authorities executed a search warrant and arrested Ricardo Batres, the owner of American Contractors and Associates (ACA).
At a Wednesday press conference, Hennepin County Attorney Mike Freeman announced the charges against Batres.
“We have charged Batres, 46, of Crystal, with one count of labor trafficking, one count of insurance fraud and one count of theft by swindle. We allege that he sought out undocumented workers as employees of his contracting company to do framing carpentry and installing sheet rock. Because they were undocumented and fearful of deportation, Mr. Batres paid them less, worked them harder, put some of them in overcrowded housing without hot water and did not provide medical benefits,” Freeman said. “We will vigorously prosecute Mr. Batres and we hope this serves as a warning to developers and general contractors to not turn a blind eye to this kind of illegal activity.”
The charges are the result of a lengthy investigation into workplace abuses documented by workers with the support of Centro de Trabajadores Unidos en Lucha (CTUL), a South Minneapolis low-wage worker-led organization that fights for fair wages and working conditions in the Twin Cities metro area. Information was also provided to the commerce department’s Fraud Bureau by labor unions and The Advocates for Human Rights. Notably, this is one of the first times a labor trafficking charge has been brought in Minnesota.
“Human trafficking yields an estimated $150 billion worldwide each year,” said Robin Phillips, Executive Director of The Advocates for Human Rights. “Minnesota is not immune to … human rights abuse, which relies on violence and threats to force people to work without pay, in dangerous conditions and in fear. Human trafficking thrives when systems fail to hold those who profit from exploitation accountable. Today’s charges send an important message that Minnesota will not stand by when workers are victimized.”
Jose Adalid Zavala Lopez and Yimer Iriarte Banegas, motivated by the abuses they experienced working under Batres, chose to participate in the investigation.
While Zavala Lopez and Banegas were nervous about going public with their experiences and concerns, they eventually concluded that the only way these abuses will change is if workers like them confront the problem. “We know that it’s not only us who are getting abused,” said Zavala Lopez
Banegas noted that intimidation took place because, “Batres took advantage of the fact that he knew the laws and we didn’t.” After trainings with CTUL, Zavala Lopez and Banegas were able challenge Batres’ assertions. “We got the strength to organize,” said Zavala Lopez.
“We see this kind of fraud occurring on a regular basis in construction throughout the Upper Midwest and beyond,” said NCSRCC Executive Secretary-Treasurer John Raines. “Some developers have routinely hired general contractors and subcontractors that exploit their workers by paying them off the books through labor brokers. The developers and general contractors who hired American Contractors and Associates have profited from the deplorable conditions that give rise to human trafficking.”
“We have a community where most developers and general contractors support middle class wages and benefits for construction workers. Cheating contractors and those who profit from partnering with cheating contractors must be held accountable.”
Dan McConnell Business Manager with Minneapolis Building and Construction Trades Council made the following statement:
“We’re troubled by the growing number of low-road contractors that steal from their own workers or misclassify them to avoid tax and workers comp obligations. Employers like Ricardo Batres have no place in our industry. This should be a wake-up call to every developer and contractor that subcontracted work to American Contracting, and then looked the other way while Batres lined his pockets at the expense of workers: he’s not getting away with it, and you won’t either. It’s time for responsible developers and contractors to take concrete actions to ensure something like this never happens again, and we look forward to working with them toward that goal. It took a lot of courage for these workers to stand up for their rights and we need to listen to them. “
The experience of immigrant workers Zavala Lopez and Banegas demonstrates that a growing national economy does not translate to better labor opportunities across the board.
Since the 1980s, the share of employed workers who are union members has fallen by half. Subsequent Supreme Court decisions and state laws against organized labor have eroded labor standards and hampered collective bargaining.
Annie Lowrey, a contributing editor at The Atlantic, explains that a greater share of the economy is controlled by fewer hands since the 1990s. “This raises profits, slows economic growth, increases inequality, and, yes, suppresses wages. Workers, in effect, have fewer employers to choose from. Employers have more power to set workers’ wages at a low level,” Lowrey writes.
The erosion of workplace rights makes it easier for exploitative employers like Batres to operate. As the Trump administration increases its hostility towards immigrant laborers, the worksite becomes a more treacherous place.
Bartes’ ACA worked on construction projects led by Reuter Walton, one of the largest Developers and General Contractors in Minneapolis, and Lennar, the single largest home-builder in the Twin Cities metro area for every year since 2006. At the time of publication a represenative Lennar could not be reached.
Reuter Walton made the following statement:
“Prior to the charges announced today by the County Attorney’s office against Ricardo Batres, the owner of American Contractors and Associates LLC, Reuter Walton Commercial, LLC had no knowledge of the allegations contained in the complaint nor of the actions by Mr. Batres and AC&A that form the basis of the charges. More specifically, although today’s Media Advisory regrettably mentioned our firm by name in connection with projects on which AC&A had been engaged, we want to clarify and emphasize that not only is Reuter Walton not a subject of the complaint, but our firm has never contracted with either this entity or individual. However, as a result of this matter we have now become aware that one of our subcontractors did in fact hire AC&A as a second-tier vendor on a project in 2017 without disclosing that fact to us. Although we have not yet been approached by any government authority seeking information or investigation in connection with this matter, labor trafficking is a very serious matter and Reuter Walton will cooperate fully with all authorities if and when it is asked to do so.”
According to the criminal complaint, Batres recruited laborers for wood wall framing and sheetrock installation. Batres used their undocumented status as leverage to force them to work long hours with low pay and without adequate safety protection. He told his employees they would lose their job and be deported if they went to a doctor for injuries suffered on the job.
The criminal complaint asserts that in May 2017, Batres hired about a dozen men, promising them wages, benefits, and, in some cases, housing. However, once they arrived at the job sites, they learned that they were working 10 to 12 hours per day, usually six days a week. They were not paid overtime and were often working as high as six stories above ground without proper safety equipment, according to the complaint.
Zavala Lopez worked for Batres for three months. While working, a wall fell on him, severely injuring his back. He was left alone for an hour before it was decided that, instead of going to the doctor, Zavala Lopez would be treated by a massage therapist. The massage aggravated the injury and Zavala Lopez was eventually moved to a hospital. Batres told Zavala Lopez not to report the incident or Batres would report him to immigration. Batres had promised Zavala Lopez money for living expenses while he recuperated, but only gave him $200 a week. Zavala Lopez still struggles with mobility due to his injuries despite 10 months of treatment and physical therapy.
Zavala Lopez was eventually apprehended by ICE, and would later learn that Batres informed the other employees of his call to ICE.
Banegas commented that the harsh Trump administration immigration policies have had a negative psychological impact on immigrant workers, especially those working in construction. Hearing rumors of workplace raids has resulted in laborers who are afraid to report to work for fear of deportation. According to Banegas, there is a perception that ICE comes to workplaces — in particular, to construction sites.
“When I was in jail for seven months after I was picked up by ICE I noticed that many inside also worked construction,” he said.
“All too often crimes like labor trafficking go unreported, and victims – usually the most vulnerable members of our city – are denied justice,” said Minneapolis Mayor Jacob Frey. “In Minneapolis, we are committed to enforcing our labor laws and holding accountable bad actors who attempt to deny workers the respect and dignity they deserve. Anyone involved in the construction industry should be held to a set of standards that ensures workers are treated with dignity and issues like labor trafficking and wage theft are eradicated.”
“I am appalled that this contractor targeted immigrant workers and thought he could get away with not paying the wages and worker’s compensation that they are owed,” said Minneapolis Ward 3 City Council Representative Steve Fletcher. “We do not and will never tolerate this behavior in Minneapolis. It’s the responsibility of developers to ensure that every single contractor and subcontractor they hire is following the law and treating everyone on their job site with respect.”
The experience of these workers is not uncommon.
Over the past decade, the United States Department of Labor (USDOL)  has uncovered at least 235 violations of federal wage and hour laws totaling over $340,000 in back wages  owed to construction workers in Minnesota. In addition, the federal Occupational Safety and Health Administration (OSHA) of the USDOL uncovered over 3,500 instances of violations of federal health and safety laws that exposed more than 5,900 construction workers to dangerous working conditions in Minnesota in the past 15 years. Over 3,400 of those workers  were exposed to “serious” violations, defined by OSHA  as a violation where there is a “substantial probability that death or serious physical harm could result from a condition which exists.” These are just reported cases, representing a much larger problem in the industry given reports of frequent worker intimidation.
CTUL has also learned that former employees of Edge Construction, LLC experienced wage theft.
Workers report that between Oct. 30, 2017 and March 23, 2018 they were not paid the required time and a half overtime and did not receive all of their wages for the hours that they worked. It is estimated that the 10 workers are owed almost $30,000, with one worker owed more than $7,000. These workers built Lennar homes near Lake Elmo and Prior Lake, the Elko New Market Commerce Center, and the Good Samaritan Society “Lodge of New Hope” in New Hope.
In an extreme case, CTUL obtained photos of a contractor choking a worker. The worker was owed back wages and was working without a lunch break. When he confronted the contractor about his wages and break, the contractor grabbed him by the throat, picked him up and slammed him on the ground. Another worker took two photo before calling the police.
University of Minnesota labor economist at the Carlson School of Management Aaron Sojourner stated that the “Unethical employers and the developers who use them harm workers. They make promises, take the product of workers’ skill and sweat, and then cheat the workers out of their earned compensation.”
“This low-road strategy puts ethical employers at a competitive disadvantage, creating a race to the bottom,” Sojourner continued. “Some real estate developers encourage this by heavily pressuring contractors to reduce costs and turning a blind eye to wrongdoing and corner-cutting. The economy runs on trust. Cheaters corrode it. It requires great courage for workers to stand together against powerful interests. Everyone who supports fair competition in our community should applaud this action.”
August 10th, 2018
Commonwealth of Virginia
Office of Governor Ralph S. Northam
FOR IMMEDIATE RELEASE
Date: August 10, 2018
Office of the Governor
Contact: Ofirah Yheskel
Governor Northam Signs Executive Order Establishing Interagency Task Force on Worker Misclassification and Payroll Fraud
~ Misclassification blocks worker benefits and protections; estimated to cost as much as $28 million a year in state income tax collections ~
RICHMOND—Governor Ralph Northam today signed an Executive Order establishing an interagency task force on worker misclassification and payroll fraud. The misclassification of employees as “independent contractors” undermines businesses that follow the law, deprives the Commonwealth of millions of dollars in tax revenues, and prevents workers from receiving legal protections and benefits.
“Treating Virginia workers fairly is central to building an economy that works for everyone, no matter who you are or where you live,” said Governor Northam. “Every employer in the Commonwealth should be playing by the same rules and this task force will come up with a comprehensive plan to make sure workers aren’t missing out on the protections and benefits they would receive if properly classified.”
A 2012 report of the Joint Legislative Audit and Review Commission (JLARC) found that one-third of audited employers in certain industries misclassify their employees. By failing to purchase workers’ compensation insurance, pay unemployment insurance and payroll taxes, or comply with minimum wage and overtime laws, employers lower their costs as much as 40%, placing other employers at a competitive disadvantage.
The task force will develop and implement a comprehensive plan with measurable goals, including identifying ways to hold companies working on state contracts who commit payroll fraud through misclassification of workers accountable, and identifying ways to deter future inappropriate conduct by recommending enforcement mechanisms.
Secretary of Commerce and Trade Brian Ball will chair the task force. It will include representatives from the Virginia Employment Commission, the Department of General Services, the Department of Labor and Industry, the Department of Professional and Occupational Regulation, the State Corporation Commission’s Bureau of Insurance, the Department of Taxation, the Workers’ Compensation Commission, and the Office of the Attorney General.
The group will develop a work plan by November 1, 2018 and report to the Governor on its progress by August 1, 2019.
The full text of Executive Order Sixteen can be found here.
August 9th, 2018
Racine sues Florida company for allegedly denying wages, benefits to workers on D.C. projects
D.C. Attorney General Karl Racine (D). (Michael Robinson Chavez/The Washington Post)
An electrical contractor that has worked on many high-profile projects in the District allegedly engaged in a payroll scheme that deprived hundreds of workers of sick leave, overtime pay or minimum wage, according to a lawsuit filed this week by Attorney General Karl A. Racine.
The complaint, filed Monday in D.C. Superior Court, claims that Power Design Inc., based in Florida, misclassified 535 electrical workers as independent contractors, which kept them off the payroll and allowed the company to avoid paying some D.C. taxes.
Although the workers have many of the same roles and responsibilities as Power Design employees and report to the company’s managers, the lawsuit alleges, they do not receive the paid sick leave that D.C. employers are required to give. The lawsuit says that at least 180 workers weren’t paid the required overtime rate, and that at least 64 weren’t paid minimum wage.
“Power Design cheated hundreds of District workers out of their hard-earned wages and stripped them of their legal rights,” Racine (D) said in a statement. “When companies misclassify employees as independent contractors, they steal from their workers and gain an unfair advantage over competitors that follow the law.”
A spokesman for Power Design said the company — which has won D.C. contracts for high-end developments such as the Yards on the Anacostia Riverfront and publicly subsidized projects such as the Line Hotel in Adams Morgan — takes seriously its compliance with local laws and regulations and has begun an internal investigation of the allegations.
The Line Hotel under construction in Adams Morgan in 2017. (Marvin Joseph/The Washington Post)
The complaint says the company hires workers from third-party “labor brokers” and then lists those workers as independent contractors, rather than its own employees.
Racine’s office is seeking tens of thousands of dollars in damages, along with unpaid taxes and fines for every worker misclassified.
“This maneuver allows Power Design to slash costs, evading taxes and costs associated with payroll that are concomitant with a typical employer-employee relationship,” the complaint says. “As business in the construction industry is often awarded through a bidding process, these suppressed costs are instrumental to Power Design’s success in the District.”
D.C. Council member Elissa Silverman (I-At Large), who has raised concerns about Power Design’s business practices before, called the lawsuit a “first, important step” that shows the city takes the enforcement of its labor laws seriously.
“We’re sending a message to contractors,” she said. “You need to pay your workers fairly, or there will be consequences.”
In 2017, when Power Design applied for certification to offer apprenticeships in the city, Silverman pointed out that the company had been sued elsewhere for misclassifying workers and not paying overtime.
“I have concerns about Power Design’s labor practices, and urge you to deny their application until they can demonstrate that their business practices are in line with local and federal law,” Silverman wrote in a letter to the D.C. apprenticeship council, which oversees apprenticeship programs for the Department of Employment Services.
A spokeswoman for the department declined to answer questions about the lawsuit or the council’s approval of Power Design’s application.
Silverman, who chairs a committee that oversees the department, said she has pushed officials there to be more proactive in enforcing D.C. labor laws, rather than mainly responding to complaints.
“It’s about really taking a muscular approach,” she said.
Labor and community activists, who also have long criticized the company, applauded Racine’s lawsuit. “For too long, the city has passed paper tiger laws that sound wonderful, but the enforcement of them has been lacking,” said Bryan Weaver, a community leader in Adams Morgan who protested the Line Hotel project.
“I hope this hearkens a new day in the District of Columbia, where developers and contractors are going to be held to the letter of the law,” he said.
Reis ThebaultReis Thebault is a reporter covering politics in the D.C. metro area. He has worked on the local desks of the Boston Globe and the Columbus Dispatch. He joined The Washington Post as an intern in June 2018. Follow
washingtonpost.com © 1996-2018 The Washington Post
Washington, D.C.’s new Paid Family Leave Program will become effective July 1, 2020. Employers will start paying the new 0.62 percent tax on wages on July 1, 2019.
The Universal Paid Leave Amendment Act of 2016 provides up to eight weeks of parental leave for workers in DC with a new child, six weeks of family leave to care for an ill family member with a serious health condition, and two weeks of medical leave to care for one’s own serious health issues.
While some of the rules are still being worked out, employers who are doing work in the District should be aware of the requirements needed to qualify for benefits. For example, this program covers anyone working in the District regardless of where they live. If one has worked for at least one year, spends more than 50 percent of their time working in the District, and works a minimum of 1,000 hours then they would qualify. The current maximum weekly benefit amount is $1,000.
Employers have the responsibility of contributing to the fund (regardless of where the company is located), create an online account with the Department of Employee Services, and post an employee notification at the place of work.
For more information, please call 202/899-3700 or email email@example.com or go to http://bit.ly/DCOPFC or https://does.dc.gov/page/district-columbia-paid-family-leave
SMACNA Mid-Atlantic Chapter
At the Construction Roundtable Meeting on June 28th, Kathy Sibbald reported on the Department of Labor, Licensing, and Regulation’s (DLLR) efforts regarding enforcement. She reported that there were 750 work-sites visited resulting in 138 new cases last year.
Sibbald is a DLLR administrator overseeing employment standards, prevailing and living wage, and worker classification protection.
She said the state collected $22,000 in fines and is in the process of hiring four new investigators.
Jim Tudor, program administrator for Prevailing and Living Wage and Worker Classification Protection Unit spoke about the need for contractors to submit the state’s prevailing wage survey.
DLLR Commissioner Matt Helminiak and Labor Secretary Kelly Schulz also spoke at the meeting.
SMACNA Mid-Atlantic Chapter
A new amendment at DC City Council has been proposed affecting the garnishment of wages. On Wednesday, July 11, 2018 CM Elissa Silverman is holding a round-tablebefore the Committee on Labor and Workforce’s implementation of the Universal Paid Leave Amendment Act of 2016. The committee will review quarterly reports due by June 30 in addition to the status of other elements implementation.
Please let Doug know if you wish to testify before July 9, 2018. You may also submit written statement to Ms. Royster at firstname.lastname@example.org.
On another subject, Council members Grosso, Nadeau, Bonds, Silverman, Evans, and White are sponsoring this amendment to prevent wage garnishment from individuals making less than the DC living wage, to limit the amount that (more…)
“Testimony related to the District of Columbia Department of Employment Services (DOES) at the DC Council Committee on Labor & Workforce Development’s Budget Oversight Hearing on April 18th “
Please note- testimony from Fred Codding and Vic Cornellier can be witnessed at time 2 hour 07 mins – 2 hour 27 mins.