in a fast-paced and transitory construction industry,...
TRANSCRIPT
In fall 2014, workers brokeground on one of the Univer-sity of Montana’s biggest newacademic offerings: the Harold
and Priscilla Gilkey Building, a facility ded-icated to “executive education offerings.”The three-story structure, which wasfunded with private donations, aimed to“partner with industry sectors, organiza-tions and business leaders to developtheir leadership capability and build orga-nizational performance,” according to aUM press release.
One of the first construction workershired to lay the building’s foundation wasJennifer Moen, a tan, lanky 35-year-old.She’ll never forget that job—she washomeless at the time and living in her carwith her two young kids. After a long shiftpouring concrete at the Gilkey site, she’dpick up her kids from a babysitter, park ina Wal-Mart lot overnight and try to keepthem warm.
“It was definitely one of those roughmoments in my life I never wanna experi-ence again,” Moen says.
Since she was making more than $20an hour, Moen didn’t question the desper-ately needed paychecks—until one day,when she met a union organizer who toldher that, according to state law, she andeveryone else hired by Northwest Con-crete and Excavation deserved to get paidtwice as much.
“I didn’t really know what the ratewas, honestly. I thought that it was fine,”Moen says. “I didn’t really pay attention.”
Moen’s case is just one example ofhow disadvantaged workers can easily bemisused in a construction industry that’sinfrequently policed, according to MilesMcCarvel, the ironworker and union or-ganizer who approached Moen.
“If you give a little, they’ll keep onasking for more,” McCarvel says. “That’sno different with our contractors or any-
body else. If somebody can make moremoney by screwing somebody, theyoften do.”
By the Montana Labor ManagementAlliance’s estimate, construction workershave had to fight to recover nearly $5 mil-lion in unpaid wages in the past 10 years.McCarvel and other labor advocates saythat’s probably just the tip of the icebergwhen it comes to worker exploitation inthe state.
W hen the Gilkey project started, Mc-Carvel walked up to the top floor of
a nearby campus building and set up histelescope to keep watch through the win-dow. He acknowledges that it might looka little bit nutty, but as a union organizer,it’s part of his job to keep an eye on majorpublic construction projects for any pos-sible wrongdoing and to encouragenonunion workers to join the Local 14.
While observing the Gilkey site, he ques-tioned how Northwest Concrete’s workerswere tying rebar—a process where sec-tions of reinforced steel are tied withmetal wire so they stay steady while theconcrete foundation is poured in.
“For one thing, there was a pile ofrebar everywhere. It was a mess,” Mc-Carvel says.
State law sets the prevailing wages forthe building industries each year. Iron-workers are at the very top, making about$50 an hour, including benefits. Carpen-ters make about $30 an hour, general la-borers make $27 an hour, and so on.People working on public projects worthmore than $25,000—such as the GilkeyBuilding—are supposed to earn prevailingwages.
After several hours of observation,McCarvel decided he’d seen enough. Hewalked to the job site, introduced himselfto Moen and asked what she was making.
[14] Missoula Independent • October 13–October 20, 2016
IN A FAST-PACED AND TRANSITORY CONSTRUCTION INDUSTRY, IT’S ALL TOO EASY FOR MONTANA WORKERS TO LOSE OUT ON THE WAGES THEY DESERVEby Kate Whittle • photos by Amy Donovan
missoulanews.com • October 13–October 20, 2016 [15]
Since Moen tied rebar, which is classifiedas ironwork, she ought to have been mak-ing ironworker wages. Instead, she wasmaking about $24 an hour. When Mc-Carvel asked to look at her pay stubs, henoticed strange discrepancies—one week,she’d be paid a salary, the next week, she’dbe paid hourly.
“No one’s ever told me what it wassupposed to be, until Miles stopped andpulled me aside,” Moen says.
McCarvel advised Moen to send incopies of her paycheck stubs to the stateDepartment of Labor, and she tried tofind the handful that she’d kept. In Mon-tana, the onus is on the employee to ini-tiate wage claims. It’s especially tough tocall out wrongdoing, McCarvel says,when employees don’t want to risk losingtheir jobs.
“The only way you can catch [contrac-tors] is if you have an employee that isn’tjob scared, that probably just got fired or
something, that kept all their paycheckstubs and knows the law,” McCarvel says.“Which almost never happens.”
In December 2014, a state wage com-pliance specialist visited the Gilkey proj-ect as part of a routine visit, where aninvestigator determined that two ofNorthwest’s employees were being paidincorrectly.
In January, Northwest Concrete firedMoen. The termination letter, signed byNorthwest owner Mark King, says her em-
ployment ended because of “insubordina-tion,” being frequently late to work andhaving a “negative” attitude. She thinksshe was fired simply because she startedto speak up about her pay.
By May 2015, after Moen submitted aformal wage claim, the state says investi-gators felt obliged to undertake an auditof every Northwest employee’s payment.
States vary widely in approaches towage theft. Idaho, for instance, is a right-to-work state with fewer prevailing wagerequirements. Others, like Utah and Wash-ington, strenuously monitor employers.Between 2013 and 2015, the Utah Depart-ment of Labor recovered $1.7 million inpay owed to its residents. Washingtonkeeps an online database where it’s easyto look up companies by name to see ifthey’ve been found guilty of shortchang-ing workers.
Montana is, by contrast, much lesstransparent when it comes to wage theft.
No database of guilty employers exists on-line, nor does the Montana Department ofLabor issue routine public reports aboutwage theft. The Wage and Hour Unit,tasked with enforcing prevailing wages, em-ploys three compliance specialists to mon-itor the entire state construction industry.
Wage and Hour Bureau Chief PamMcDaniel has served the Department ofLabor for over 30 years. She acknowl-edges that the three investigators’ scopeis limited.
“We don’t hit every project, we’re justtrying to be out there and be within [someof] the projects throughout the wholestate,” McDaniel says.
She also says that in her entire ca-reer, she can’t recall a time when she’sbeen asked about prevailing wage lawsby a reporter.
In 2015, the Wage and Hour Unit re-viewed 110 business payrolls and con-ducted 49 on-site visits. That represents asmall fraction of the thousands of con-struction projects throughout the state.The city of Missoula alone issued 473building permits in 2015.
When prevailing wage specialists takenote of a problem, such as incorrect ormisclassified wages, McDaniel says theynotify the contractors, architects and en-gineers associated with the project. If theemployer provides evidence that the wageissue was resolved, the specialists considerthe case closed.
McDaniel says she prefers to take a“proactive, rather than reactive” approachto wage law by having prevailing wagespecialists educate employers and encour-age parties to settle disputes without stateinvolvement. She says most cases are re-solved before they require the lengthy,formal process of an audit. The state au-dited nine businesses in 2015; only oneaudit—of Northwest Concrete’s work onthe Gilkey project—resulted in a payout ofmore than $5,000.
McCarvel says since the state encour-ages parties to privately resolve disputes,it’s difficult to get an idea of how oftenworkers really are being exploited. Hesuspects that shady contractors are per-fectly fine with the state’s minimal levelof oversight.
“If they get away with it 10 timesand they get caught once, and it costs’em 10 percent of the profits they madethe other times, then way to go,” Mc-Carvel says.
The Montana Labor Management Al-liance offers a different picture of wagetheft than the state’s Department of Labor.The MLMA keeps a tab on all wage theftincidents it hears about. The MLMA esti-mates that between 2005 and 2015, ithelped workers recover $4.7 million inwages on projects ranging from elemen-tary schools to hospitals.
John Mooney is now semi-retired, buthe used to investigate labor disputes for
MLMA. He says many MLMA recoveriesmight not show up in state records, be-cause in his experience just pointing outthe problem encourages contractors to re-solve the issue quietly.
“If you go to a contractor and say,‘Take care of this,’ they’ll sometimescough up the money right away and makeeverything right,” Mooney says. “But if youwere to contact them they’d deny it, be-cause there hasn’t been any official com-plaint. But that’s the way we do things. If
State and federal laws require contractors on public construction projects to pay workers “prevailing wages,” which change each year. Projects con-tracted by public entities, such as the city of Missoula or the University of Montana, fall under these requirements.
you want to get people the money they’reowed, that’s the route we take.”
The MLMA lists recoveries rangingfrom a few hundred dollars to hundredsof thousands. In 2015, the MLMA claimedthat a lath and plaster company owedworkers $100,000 for an elementaryschool project in Billings. The outcomewas unclear.
“It’s a pretty big issue,” Mooney says.“What the MLMA does, and what the state
does, is just scratching the surface. Be-cause they only have three people that doit, MLMA has only two people that do it,and there’s hundreds of these public workconstruction jobs every year.”
E ven when workers know what theirrights are, it can be hard to prove an
employer’s wrongdoing. Justin McEwen, aunion organizer and bricklayer based outof Stevensville, is a broad-shouldered manwith a direct gaze. In spring, his unionleaders were incensed when they lost outon a major contract for an $18 million newWal-Mart in Great Falls. McEwen didn’t un-derstand how the subcontractor, J&L Eng-land Masonry from Idaho, could underbidhis company by $380,000 without doingsomething improper.
“That’s a huge margin,” McEwen says.“To move all of your equipment up fromIdaho, when I have a contractor sittingright there in Great Falls, how do you beatsomebody out of a bid by that much?”
So McEwen went to work for J&LEngland as a “salt,” a common union prac-tice when an organizer takes a nonunionjob to investigate the working conditions.The company hired him, promising $22an hour, plus overtime pay for anythingabove 40 hours a week.
“I put 56 hours in [over] four days,”McEwen says. “We were working from6:30 a.m. to 8:30 at night, with one break,a lunch break.” (State law doesn’t man-date breaks, but McEwen says union jobsrequire periodic paid break time.)
Within a few days, McEwen thought hehad everything he needed to show how thesubcontractor was cutting corners. His paystub—which he’s shown to the Independ-ent—indicates he was receiving a mere $3extra per hour, not time and a half, whichis required by state law. The overtime waslisted under per diem/travel pay.
“Well, you don’t have to claim taxeson travel pay, so that’s where they put allmy overtime,” McEwen explains. “So therewas no overtime on that check. And thatrips off the men for unemployment, be-cause not all their wages are on theircheck, so they’re not getting all theirwages counted for unemployment.”
He sent in the documents to the Mon-tana Department of Labor. The state’sstandard procedure in cases of wageclaims is to ask the employer to providepayroll data for evidence—however, itdoesn’t ask for bank records. Shortly afterMcEwen’s claim, J&L England submittedpayroll records showing the numbers asthey should have originally appeared.
McEwen says he and the other brick-layers on the project, who were mostlyfrom Idaho, received backdated checkswith extra overtime pay.
Justin McEwen has worked as a bricklayer and union organizer for 17 years. He says even when he’s broughtevidence to the state showing an employer’s wrongdoing, it’s been difficult to prove his case.
Ironworker and union organizer Miles McCarvel says wage theft is far more prevalent across the state thanmost people realize.
[16] Missoula Independent • October 13–October 20, 2016
“The biggest reason this stuff happens and whypeople get away with it is because the workforceisn’t educated. They don’t know anything about
these laws, or how to deal with it.”
missoulanews.com • October 13–October 20, 2016 [17]
McEwen suspects J&L England justedited the payroll data in QuickBooks andmailed the sheet to the state. McEwen hasall of his check stubs to prove it, but hesays the state investigator was satisfiedwith the payroll printout.
McEwen received a letter from theDepartment of Labor in June denying hiswage claim. Nonetheless, he says Eng-land did follow correct procedure andstarted including time-and-a-half over-time on the rest of the project after thestate got involved.
“What came out is he did end up pay-ing right,” McEwen says. “He did hurt hisbottom dollar.”
When asked about the incident in a re-cent phone interview, J&L England ownerJohn England says McEwen’s claim resultedfrom a “misunderstanding.” England addsthat McEwen “hired on just to stir thingsup, more or less,” shortly before cutting offthe conversation and hanging up.
T he University of Montana held a rib-bon-cutting ceremony for the Gilkey
Building in May, with remarks from Presi-dent Royce Engstrom praising the center’sopportunity to “help business leadersbuild strong organizations and supporteconomic vitality.” He posed for photosalongside business school Dean Larry Gi-anchetta, and Harold and Priscilla Gilkey,the primary donors of the project.
The Gilkey Building, originally esti-mated to cost $9.3 million, came in at $8.8million—about $500,000 under budget,according to UM officials.
All UM projects are contracted by thefacilities services department. Facilities serv-ices Director Kevin Krebsbach says he some-times hears about issues with constructionworkers’ wages on campus projects. UM’sresponsibility is to make sure prevailingwage rates are posted on a sheet in the jobtrailer. If a worker comes to him with a griev-ance, he refers them to the state.
“If their paycheck comes up shortthey don’t come to me,” Krebsbach says.“If they do, I tell them to go back to theDepartment of Labor. Then I [issue a] no-tice [to] the contractor that there’s anissue with employees. I try not to get inthe middle of that.”
A few months before the GilkeyBuilding opened its doors, the state’sWage and Hour Unit wrapped up its in-vestigation of the subcontractor North-west Concrete. (The company is alsolisted online as “Northwest Concrete &Construction,” though its letterhead andstate documents refer to it as NorthwestConcrete and Excavation.)
Documents obtained by the Inde-pendent show in March 2016 an investiga-tor determined that Northwest Concrete
underpaid several workers by misclassify-ing wages or paying the wrong year’s pre-vailing wage rates. The company must payout $42,000, which includes fines andfees. Some workers will be reimbursed fora single day’s wages; others for months’worth of labor. The total amount doesn’tappear to include the wage claim Moensubmitted before the state started itsaudit, though the state says an employee’swage claim submitted in January did helpprompt the investigation.
Amy Smith, the wages compliancespecialist who supervised the decision,says it shouldn’t matter how much money
a worker is owed, though $42,000 is cer-tainly a significant chunk of change.
“No matter whether it’s $5 or $50,000,it’s important that each wage earner getswhat’s due to them,” Smith says.
Mark King, head of Northwest Con-crete, doesn’t deny that his company paidincorrect wages. He attributes the mis-takes to a former bookkeeper and claimshe hadn’t known about the state’s audituntil it already began.
“I didn’t realize all this was goingdown,” King says. “By the time I found outit was kind of too late. I found out this hadbeen through the process.”
State documents accuse Northwest oftaking “multiple extensions” and submit-ting incomplete evidence, until a newbookkeeper was hired by the company inmid 2015 and helped provide additionalpayroll documents.
While King doesn’t dispute any of thedocumented wage claims on the Gilkeyproject, he does take issue with the state’s
ruling. Part of Northwest Concrete’s$42,000 fee includes a $25 per day fine forpaying the wrong wage, which King calls“ridiculous.” He says he’s contemplatingsuing the state over the fines.
“I just think that the state, whether wehad done our due diligence or not, howcan they consciously put that kind of debtonto a company?” King asks.
He adds that he thinks the prevailingwage laws are weighted too heavily in theunions’ favor. Nonetheless, King says he’sworking with his new bookkeeper to keepa close eye on the prevailing wage projectsthey’re contracted to work on this year.
“We’re making damn sure that some-thing like this doesn’t happen again,” Kingsays.
The state notes that the main contractoron the project, Quality Construction, wasnotified of the audit on Northwest. QualityConstruction didn’t respond to multiple re-quests for comment on its prevailing wagepractices or relationship with Northwest.
Quality Construction’s website em-phasizes its “commitment to cost control”and assures clients: “Our Quality Con-struction management team reviews finan-cial statements monthly and job statusreports weekly (or daily, as necessary) tocontrol your project costs.”
Moen moved on and found otherwork since Northwest Concrete fired her.She says it was a relief when she got a let-ter in March 2015, a year before the statefinalized its ruling, notifying her she’d bereceiving additional payment for her workon the Gilkey Building’s foundation—about $7,000 total. A year later, the checks
started arriving. Moen says she’s receivedabout $3,000 so far, which she’s put to-ward bills. She’s now renting a three-bed-room house in Frenchtown for her andher kids, ages 4 and 6.
McCarvel, for his part, says he’d likethe city of Missoula to take a stand by scru-tinizing public work project bids moreclosely, possibly with a questionnaire thatasks bidders if they’ve ever been chargedby the state with wage theft. He’d also liketo see more education for union andnonunion workers alike on their rights.
“The biggest reason this stuff happensand why people get away with it is be-
cause the workforce isn’t educated,” Mc-Carvel says. “They don’t know anythingabout these laws, or how to deal with it.They’re job scared, they let the employerget away with it. It’s so prevalent thatthat’s what they’re used to.”
McCarvel has tried to convince Moento join the union, which would help herfind work and ensure she’s paid appropri-ately. Moen hesitates, though, since appren-tice ironworkers often get sent out of statewhen local union jobs are scarce. She’s un-willing to be far from her young kids. In thelast few months, she’s been grateful to findother trustworthy contractors willing to giveher a chance, though she’s frustrated thatshe’ll still have to watch out for herself.
“Yeah, it’s crazy,” Moen says. “I think itshould be investigated here in how thecompanies treat their employees. Their em-ployees don’t go out there and bust a buttto make the money and not get paid.”
According to state law, ironworkers should earn $50 an hour, including benefits, on public projects. State inves-tigators say iron work is the most commonly misclassified type of labor.