Pennsylvania contractor to pay $20.7M in wage theft case

Dive Transient:

  • Pennsylvania highway and bridge contractor Glenn O. Hawbaker has pleaded no contest to and been sentenced in the largest prevailing wage theft scenario in U.S. history, in accordance to an announcement from state Legal professional Typical Josh Shapiro.
  • Costs ended up brought towards Hawbaker in April. Very last 7 days, the Point out Faculty, Pennsylvania, contractor agreed to fork out just about $20.7 million in restitution to 1,267 workers, according to the announcement.
  • In addition, the firm faces 5 several years of probation and other conditions, such as the appointment of a corporate monitor. 

Dive Insight:

Hawbaker allegedly violated the Pennsylvania Prevailing Wage Act and the Davis-Bacon Act, which seek to secure personnel by ensuring all contractors performing on state or federally funded jobs fork out the identical wage prices, decided by state and federal businesses. Contractors can satisfy a part of the essential wage by offering “fringe added benefits” such as health care and retirement contributions.

Right after a a few-year investigation, Hawbaker pleaded to 4 felony counts of wage theft from its workers. The no contest plea implies the defendant does not plead responsible, but accepts conviction or sentencing as if it did. 

Shapiro’s office environment said that the violation occurred when Hawbaker contributed to retirement accounts for all of its personnel — including homeowners and executives  using cash meant for prevailing wage workers’ retirement resources. 

Shapiro also introduced fees for thieving resources intended for prevailing wage workers’ wellness and welfare advantages, working with them to subsidize the charge of the self-funded prepare that addresses all employees. The enterprise covered up the plan by artificially inflating charges by millions of pounds and declaring credit for prohibited charges, according to Shapiro’s office.

When costs have been to start with brought in April, investigators decided that Hawbaker’s tactics experienced lasted many years, but the contractor could only be billed for the final five several years due to the statute of limits. Founded in 1952, Hawbaker is a single of the major contractors to total tasks for the Pennsylvania government, receiving an approximated $1.7 billion in contracts among 2003 and 2018.

In a assertion shared with Design Dive, Hawbaker explained it experienced followed guidance from attorneys and had federal regulators evaluation their procedures on work opportunities, top enterprise officers to believe they had followed all regulations. 

“Our firm’s decision to plead no contest avoids protracted litigation, which could have jeopardized the livelihoods of our dedicated employees,” the statement claimed. “We continue on to think that we followed all demands relating to fringe gains.”

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