Viewing: Pulte
of 1

New study examines wage theft in Mass construction Posted by on

New research published by the University of Massachusetts Amherst Labor Center asserts how the illegal theft of workers’ wages, especially those of undocumented immigrant laborers, has reached epidemic levels in the residential construction industry in Massachusetts. In the working paper “The Epidemic of Wage Theft in Residential Construction in Massachusetts,” Tom Juravich, professor of sociology, with research assistants and co-authors Essie Ablavsky and Jake Williams, present three case studies examining the subcontractors for one of the nation’s largest homebuilding companies, regional drywall-hanging companies and affordable housing construction by a community development corporation.

Based on legal records, news reports and 27 in-depth interviews with construction workers, contractors, homeowners, union staff and community-based organizers, Juravich and his co-authors present evidence that contractors in residential construction responded to their financial losses from the Great Recession by the wholesale and illegal misclassification of their workers as independent contractors.

“By not paying taxes on workers’ wages and by not contributing to worker compensation funds, contractors reduced their building costs by 30 percent,” the paper states. “These contingent workers—the majority of who are undocumented immigrants—are routinely cheated out of their wages by contractors who pay late, do not compensate for overtime, and sometimes do not pay for work at all. Firms generate profits by victimizing some of the most vulnerable workers in Massachusetts, delivering poor quality homes to consumers, and leaving citizens of the commonwealth on the hook to make up for hundreds of millions in lost tax revenue.”

Juravich and his co-authors focused on residential construction in and around Worcester and Framingham, two modest-sized cities with populations of 182,000 and 68,100, respectively. “We chose this location, in part, because of the belief that innovation (and the violations that prompted them) often begin in smaller markets like this one before entering larger urban markets such as nearby Boston,” Juravich says. “In the case of construction, practices such as these emerge in these regional markets in residential construction, far away from the watchful eye of labor organizations and other regulatory bodies that tend to focus on larger cities and commercial construction projects.”

Juravich and his co-authors illustrate the tactics allegedly used by a major national homebuilder and its subcontractors, five of which were ordered to pay more than $400,000 in unpaid wages and penalties by the Commonwealth of Massachusetts’ Attorney General’s office for wage theft violations in the state. The researchers say documentation shows that while the homebuilder financially benefited from this wage theft, the company was legally insulated from being charged with any wrongdoing and few of these wages and fines were ever collected, as many of its subcontractors simply closed their doors or reopened under new names.

They also highlight regional drywall firms that they say have a long history of illegal misclassification and wage theft in New England, demonstrating how easy it is to reorganize and resume operations under new names in order to avoid prosecution and to continue these practices.

“Because no existing mechanism prevents such firms from avoiding prosecution, we have seen an explosion of firms that employ illegal misclassification and wage theft in the drywall industry,” Juravich says. “This phenomenon deeply threatens the economic viability of legitimate contractors who play by the rules. Perhaps more troubling is that the growth of these companies who make their profits from illegal employment practices has begun to move beyond residential construction into more commercial and public types of construction.”

The paper suggests a number of policy recommendations for Massachusetts to combat illegal misclassification and wage theft, including strict enforcement of penalties and fines, public identification of violators, better permanent inter-agency coordination and a dramatic increase in workplace raids.

“We have seen how woefully inadequate the regulatory structure has been and watched the emergence of a whole new production regime in residential construction built upon a foundation wage theft,” Juravich says. “Without concerted change, these new methods of production will both intensify and spread to other forms of construction victimizing largely immigrant workers in the industry. The quality of construction will continue to decline delivering a poor value to homeowners while leaving the taxpayer on the hook to cover lost revenue and the medical cost of those not covered by workers’ compensation.”

Ultimately, however, the authors state that the real solution to the crisis lies with immigration reform.

“The single, most important policy action to combat wage theft and misclassification is genuine immigration reform,” they conclude in the paper. “Without real immigration reform that will provide a path to citizenship for the more than 10 million undocumented workers in the United States, it will be difficult to control forced misclassification of work and the theft of workers’ wages. As long as immigrants remain hidden in the shadows and largely excluded from regularized employment, unscrupulous employers will continue to exploit their vulnerability to increase their own profit.”

Pulte subs ordered to pay more than $500k Posted by on

Multiple enforcement agencies in Massachusetts today announced that five subcontractors employed by Pulte on sites in Eastern Massachusetts have been ordered to pay workers more than $400,000 in owed wages and make payments totaling $141,000 to cover unpaid taxes.

The order is the result of investigations that began after workers complained to Representatives of the New England Regional Council of Carpenters that they had been unpaid for extended periods of time. Workers went on strike at several Pulte locations and filed complaints with the state.

"The investigation fined five separate subcontractors, but the real culprit is Pulte Homes, a multi-billion dollar national homebuilder," said Mark Erlich, Executive Secretary-Treasurer of the New England Regional Council of Carpenters. "Those subs are interchangeable and were just doing Pulte's bidding. Cheating is Pulte's business model and, unfortunately, that approach is far too common in the residential construction industry."

Subcontractors that were part of the order include:
--AM Construction Services and its President, Adimar Demoura, age 32 of Framingham, allegedly failed to pay four workers a total of $15,331.50 for framing work done on private residential projects in Braintree and Plymouth. They were also fined $22,500 in penalties.
--Five Stars Construction and its President, Alexandre Miranda, age 40 of Trumbull, Connecticut, allegedly failed to pay two workers a total of $30,700 for framing work done on a private condominium project in Natick. They were also fined $30,000 in penalties.
--Nunes Brothers Construction and its President, Tiago Aguiar M. Nunes, age 28 of Brooklyn, New York, allegedly failed to pay 23 workers a total of $99,086.75 for framing work done on private condominium and single-family homes projects in Braintree, Plymouth, Natick, and Northbridge. They were also fined $112,500 in penalties.
--Seven Seas Group and its President, Jackson Croscup, age 55 of Fall River, allegedly failed to pay five workers a total of $10,333 for framing work done on a private condominium project in Natick. They were also fined $20,075 in penalties.
--Two Brothers Construction and its President, Wellington DeLima Borges, age 41 of East Natick, allegedly failed to pay six workers a total of $34,751.50 for framing work done on a private home development project in Plymouth. They were also fined $34,500 in penalties.

Investigating the complaints were Attorney General Martha Coakley’s Office (AGO), the Executive Office of Labor and Workforce Development (EOLWD), and the Joint Enforcement Task Force on the Underground Economy and Employee Misclassification (JTF). The JTF was established by Governor Deval Patrick through Executive Order #499 in March 2008 to coordinate multiple state agencies’ efforts to stamp out fraudulent employment activities by enforcing the state’s labor, licensing, and tax laws.

“All workers in the Commonwealth deserve to be paid for the wages they have earned, including their overtime,” said Attorney General Coakley. “We will continue to work together and take appropriate action to stop these unlawful business practices, level the playing field for companies and protect workers.”

“The Commonwealth is committed to insuring that all businesses carry both workers’ compensation and unemployment insurance coverage,” said Secretary of Labor and Workforce Development Joanne F. Goldstein. “We will not tolerate employers or developers who proceed without this coverage, which puts employees at risk and employers who play by the rules at a competitive disadvantage. The Joint Task Force will continue to take all necessary action to protect legitimate employers, employees and the taxpayers of the Commonwealth.”

MetroWest Daily News reports on Pulte, unpaid carpenters Posted by on

The MetroWest Daily News today ran a front page, above the fold piece about carpenters that have gone unpaid for work they did on multiple Pulte sites in Massachusetts. The issue was the topic of a story in the Quincy Patriot Ledger last Saturday.

A group of more than 30 nonunion carpenters have filed wage complaint forms with the Massachusetts Attorney General's office seeking to recover months of wages they are owed for work they did on Pulte sites in Braintree, Natick, Northbridge and Plymouth. They may also be owed wages for work done on a Pulte site in Wakefield, Rhode Island.

Despite protests at the Braintree and Natick sites and last week's column in the Patriot Ledger, the company continues to claim in today's story that they are "unaware of any complaints filed with any state or federal agencies."

As one of the largest home-builders in the United States, with developments in 28 states, it's hard to believe Pulte doesn't know what's happening on their own sites. The company acts as a general contractor on many of their projects, directly hiring subcontractors.

A company spin-meister told the MetroWest Daily News that "PulteGroup considers a number of factors when selecting subcontractors to build its homes. Each project is unique and contracts are awarded on merit to the companies that are the best fit for the job."

Unfortunately, workers going unpaid on Pulte jobs does not appear to be a "unique" condition. It looks more like something the company has decided is the "best fit" for their current projects in New England.

Carpenters in New England aren't the only ones unhappy with Pulte. Last week eight people were arrested during a peaceful demonstration at Pulte's annual shareholders meeting in Detroit. They were there to question the job creation and economic benefit to the community of $900 million in tax benefits Pulte earned last year when a tax law was changed largely benefiting a small number of large, national home builders.

Here in New England, Pulte is the latest in a series of contractors whose projects have become the subject of protests and wage claims as a result of nonunion workers not being paid and going on strike. The following is a video chronicling some of NERCCs activity regarding the issue.

Carpenters unpaid for months on Pulte jobs Posted by on

NERCC Organizers are putting the heat on Pulte Homes, one of the nation's largest home builders, after more than 30 nonunion carpenters came forward reporting they hadn't been paid their for months worth of work.

Demonstrations have been held at Jonathan's Landing in Braintree and South Natick Hills in Natick and the workers have filed wage complaint forms with the Massachusetts Attorney General's Office. Most of the workers are owed nine week of wages and overtime, totaling $3,500-$4,000 each, from work they did in Braintree, Natick and another site in Wakefield, Rhode Island.

Multiple subcontractors have worked and been dismissed from the Pulte sites, each employing the same group of carpenters. Pulte acts as the general contractor on many of their projects, directly hiring and paying subcontractors.

It is unclear whether Pulte paid the subcontractors who did not pay the carpenters. But what is clear is that these are projects being built and sold by Pulte, who boasts "Pulte Homes' culture is wrapped around a strong sense of family and a small company atmosphere."

The Quincy Patriot-Ledger ran a story on the issue today.