On Tuesday, D.C.’s Attorney General’s Office filed a sweeping wage theft lawsuit. Among the defendants: One of the largest Construction Management companies in the United States.
“We're very concerned about workers who don't have a lot of leverage or power in this conversation being taken advantage of,” said DC Attorney General Brian Schwalb. “And that's what the labor brokers are doing.”
City Ridge is now a bustling part of Northwest D.C. – a $715 million, 1.8-million square-foot redevelopment of the 10-acre site that took years.
But the complaint filed Tuesday by D.C.’s Office of the Attorney General alleges the general contractor Whiting-Tuner, paid millions to oversee the project, boosted its bottom line by allegedly not paying workers what they were owed under the law.
“They're sending cheap labor to the worksite. And the way they're making sure that labor is cheap is by wrongfully classifying these workers who should be treated as employees as independent contractors,” Schwalb told WUSA9. “That's the way the labor brokers cut out the cost of overtime of benefits of full minimum wage for workers that if they were properly treated as employees would be earning those dollars.”
The complaint alleges Whiting-Turner, one of the largest employee-owned general contractors and construction management companies in the United States, signed a $19 million contract with Frederick, Maryland based W.G./Welch Mechanical Contractors, who in turn contracted with area labor brokers Mechanical Plumbing Crew, Co. Ramirez Plumbing and GINCO HVAC to provide low cost, misclassified workers to Whiting-Turner for construction on City Ridge.
All five companies are named in the suit, which is seeking restitution for close to 400 workers, penalties and damages against the companies, and injunctive relief to make sure that the alleged practices are put to an end.
“There's no question that the development of our city is critical,” Schwalb said. “The apartment buildings that people want to live in the grocery stores where people want to shop. But these developments cannot be built on the back of hard workers who are being ripped off.”
WUSA9 left messages for all five companies named in the suit seeking comment, but have yet to receive a response from them or their attorneys.
A 2019 OAG analysis of wage theft in the construction industry found companies that misclassify workers can illegally reduce their labor costs by as much as 40% – the OAG says that financially incentivizes misclassification by giving employers an edge over law-abiding companies, illegally suppressing labor costs throughout the entire construction industry.