News & Updates

TRENTON – Attorney General Gurbir S. Grewal announced that an Ocean County construction contractor was sentenced to prison today for purposely not paying prevailing wages on a government contract valued over $75,000. As part of his criminal activity, the contractor falsified payroll records for the public contract to cover up the fact that he paid most of his employees only a fraction of the wages required under the Prevailing Wage Act, while not paying others at all. It is believed that many of the defendant’s employees were undocumented immigrants and he took advantage of their status. Albert Chwedczuk, 45, of Toms River, N.J., was sentenced to three years in state prison by Superior Court Judge Mark K. Chase in Camden County. He pleaded guilty on March 27, 2019 to an accusation charging him with second-degree false contract payment claims. Chwedczuk must pay a total of $155,166 in restitution to workers. Former Deputy Attorney General Christopher J. Keating took the guilty plea and Deputy Attorney General Valerie Butler, who is Deputy Bureau Chief, handled the sentencing for the Division of Criminal Justice Specialized Crimes Bureau. The case was referred to the Division of Criminal Justice by the New Jersey Department of Labor and Workforce Development (NJLWD), Division of Wage and Hour Compliance, which initially investigated the violations of the Prevailing Wage Act. “I am committed to using all available tools, including New Jersey’s strong criminal laws, to protect our workers, protect our immigrants, and protect the integrity of our public contracts,” said Attorney General Grewal. “When contractors receive taxpayer dollars for a public project, they promise to pay prevailing wages to employees for all their hard work. But this employer cheated his workers and hoarded public funds for his own enrichment. This case is a message to all employers that we will not tolerate contractors underpaying their workers and lying about it.” “We are sending a loud and clear message to dishonest contractors that this type of crime does not pay,” said Director Veronica Allende of the Division of Criminal Justice. “We want unscrupulous employers to know that we will work closely with the Department of Labor and Workforce Development to investigate contract fraud and prevailing wage violations and hold bad actors accountable.” Labor Commissioner Robert Asaro-Angelo said, “Contractors working on public projects in New Jersey must pay their workers every penny they are entitled to under the law. We will continue to work closely with our partners in the Attorney General’s Office to protect workers and taxpayers by making sure unscrupulous contractors face significant penalties for their crimes.” The state investigation revealed that Chwedczuk knowingly failed to pay his employees approximately $155,166 in wages on a prevailing wage public contract in 2015 and 2016. As of 2014, Chwedczuk was legally barred from obtaining or performing work on public contracts due to his prior violations of the Prevailing Wage Act with respect to his businesses Ren Construction LLC and Real Construction LLC. Nevertheless, he used a new business entity he created, Bella Group LLC, to obtain a public subcontract worth $400,000 to provide masonry work for the Cooper Camden Student Housing project on South Broadway in Camden. Once Chwedczuk obtained the public subcontract using Bella Group LLC, he paid most of his employees only a fraction of the prevailing wages they were entitled to be paid, while not paying others at all. To cover up his violations of the Prevailing Wage Act, he submitted certified payrolls containing false information to the general contractor on a weekly basis. In addition to producing false records, Chwedczuk instructed several employees to provide false information to an NJLWD investigator regarding the wages they were receiving. Detective Christine Sullivan and Deputy Attorneys General Keating and Jeffrey J. Barile conducted the investigation for the Division of Criminal Justice Specialized Crimes Bureau, under the supervision of Deputy Chief of Detectives Rich King, Chief of Detectives Weldon Powell, Bureau Chief Andrew Johns, and Deputy Bureau Chief Valerie Butler. Senior Field Representative Raul Virella conducted the investigation for the Department of Labor and Workforce Development, Division of Wage and Hour Compliance, under the supervision of Section Chief Kevin Triplett of the Public Contracts Section of the Division of Wage and Hour Compliance. Defense Attorneys: Robert M. Perry, Esq., and Ehsan F. Chowdhry, Esq., Neptune, N.J.

SEPTEMBER 5, 2019 Defendants Schemed to Evade More Than $1 Million in Insurance Premiums, Leaving Injured Workers Unable to Pay For Healthcare or Receive Disability Pay Manhattan District Attorney Cyrus R. Vance, Jr., New York City Department of Investigation Commissioner Margaret Garnett, and New York State Inspector General Letizia Tagliafierro today announced the indictment of unlicensed labor broker SALVADOR ALMONTE, JR., 38, and insurance broker STEVEN ASVAZADOURIAN, 40, for an extensive insurance fraud scheme in which they underreported the size of ALMONTE’s companies and lied to insurance carriers about the work being performed by his employees in order to evade more than $1 million in insurance premiums, leaving more than a hundred construction workers underinsured. The defendants are charged in a seven-count New York State Supreme Court indictment with Insurance Fraud in the First Degree, Scheme to Defraud in the First Degree, Criminal Possession of a Forged Instrument in the Second Degree, Offering a False Instrument for Filing in the First Degree, and Fraudulent Practices in violation of Workers’ Compensation Law § 114(3).[1] D.A. Vance said: “These defendants scammed insurance companies to cut costs in one of the City’s most dangerous industries with utter disregard for their employees’ lives. When his workers were injured on the job, Salvador Almonte refused to cooperate with the Workers’ Compensation Board, choosing to leave his employees without access to medical treatment or disability pay in a failed effort to keep his scheme under wraps. Over the last three years, my Office has returned $7.4 million in stolen wages to workers, and more than $14 million in unpaid taxes from 104 construction companies to New York State. Together with our partners in the Construction Fraud Task Force, we are committed to seeking justice for workers and protecting them from predatory practices.” DOI Commissioner Garnett said: “These defendants allegedly fabricated construction payrolls and worker classifications, and created fake certificates of insurance, to fraudulently reduce their workers’ compensation premiums, according to the charges. These crimes have real consequences. In this case, the falsified information meant construction workers with serious injuries had difficulty obtaining the workers’ compensation payments they were entitled to by law, until law enforcement stepped in. DOI worked hand-in-hand with the Manhattan District Attorney’s Office and with our state law enforcement partners to stop this charged conduct and help the workers get the financial assistance they needed.” NYS Inspector General Tagliafierro said: “As the New York State construction boom continues, today’s indictments serve as a warning that companies cannot evade criminal prosecution for workers’ compensation fraud. I thank District Attorney Vance and New York City Department of Investigation Commissioner Margaret Garnett and their offices for their efforts in this investigation.” According to court documents and statements made on the record in court, ALMONTE is an unlicensed labor broker who operates a multi-million dollar construction labor supply business in New York City and the surrounding area. His companies – including Power Services Solutions LLC, Power Services of New York, Inc., South Side Services, Inc., and North Star Strategy, Inc. – provide workers to construction companies engaged in high-rise superstructure projects. As part of his services, ALMONTE is required to show proof that he has a valid workers’ compensation insurance policy to cover his workforce. In January 2015, ALMONTE began an insurance fraud scheme in which he made false representations to five different insurance carriers, including the New York State Insurance Fund, to secure workers’ compensation insurance coverage at fraudulently reduced prices. With the help of ASVAZADOURIAN and his insurance brokerage, the Dorian Agency Ltd., ALMONTE evaded more than $1 million in premiums from the New York State Insurance Fund alone. Workers’ compensation insurance premiums are based on a company’s annual payroll and the risk involved in the type of work done by its employees. A larger company engaged in more dangerous work, such as a construction company erecting high-rise buildings, has a workforce that is more expensive to insure. In order to secure cheaper rates, ALMONTE and ASVAZADOURIAN falsely told insurance companies that they were providing coverage for a handful of cleaners or interior carpenters, misleading the insurance carriers about the true size and work performed by ALMONTE’s workforce. Once a form of coverage was established for ALMONTE’s businesses, or even when no coverage was in place, ASVAZADOURIAN and other employees of the Dorian Agency generated fraudulent “certificates of insurance,” which ALMONTE sent to his clients as proof that he had adequate workers’ compensation insurance to cover the construction workers he provided. Over the past four years, more than a dozen of ALMONTE’s workers have been injured on the job. In one case, construction worker Juan Chonillo died on a construction site operated by SSC High Rise, Inc., which at various times used ALMONTE’s labor supply services. In July 2018, the company pleaded guilty to Manslaughter in the Second Degree for causing Mr. Chonillo’s death. Many of the injured workers submitted claims to the New York State Workers’ Compensation Board after their work-related injuries. In order to hide the insurance fraud scheme, ALMONTE refused to cooperate with the Board when notified to appear. His refusal to acknowledge that he was the employer of injured workers impeded the Board’s efforts to assign insurance coverage to these workers, including two who faced extensive delays in receiving disability pay. One of these workers suffered significant injuries when he fell ten feet on a construction site and landed on top of an exposed piece of capped metal rebar. This worker spent months unable to complete necessary medical treatment, and had to wait almost a year for disability payments that should have been paid to him following his injuries. A second employee, who had to leave his job after suffering a head injury when he was struck by a large piece of wood, waited more than 14 months for disability pay while the Board attempted to determine the identity of his employer in order to establish the responsible insurer carrier. Assistant D.A.s Kenneth Moore and Leah Keith are handling the prosecution of the case under the supervision of Rackets Bureau Assistant D.A.s Judy Salwen, Principal Deputy Chief; Michael Ohm, Deputy Bureau Chief; and Jodie Kane, Bureau Chief; and Executive Assistant D.A. Michael Sachs, Chief of the Investigation Division. Analyst Danielle Corbett and Damaye Williams, Paralegals Olivia Estes and Claire Williams and Privilege Review Data Specialist Olivia Savell assisted with the case. District Attorney Vance thanked DOI and the NYS IG’s Office, as well as the New York State Department of Financial Services’ Criminal Investigations Unit and Insurance Licensing Unit, and the New York State Insurance Fund. D.A. Vance additionally thanked the Port Authority of New York & New Jersey Inspector General and the Metropolitan Transit Authority Inspector General for their ongoing contributions to the Construction Fraud Task Force. Defendant Information: SALVADOR ALMONTE, JR., D.O.B. 2/12/1981 Charges: Insurance Fraud in the First Degree, a class B felony, one count Scheme to Defraud in the First Degree, a class E felony, one count Criminal Possession of a Forged Instrument in the Second Degree, a class D felony, three counts Offering a False Instrument for Filing in the First Degree, a class E felony, one count Fraudulent Practices in violation of Workers’ Compensation Law § 114(3), a class E felony, one count STEVEN ASVAZADOURIAN, D.O.B. 4/4/1979 Charges: Insurance Fraud in the First Degree, a class B felony, one count Scheme to Defraud in the First Degree, a class E felony, one count Criminal Possession of a Forged Instrument in the Second Degree, a class D felony, three counts Offering a False Instrument for Filing in the First Degree, a class E felony, one count Fraudulent Practices in violation of Workers’ Compensation Law § 114(3), a class E felony, one count [1] The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court and statements made on the record in court.

A labor broker whose company pairs workers with construction gigs put endangered their employees by scamming workers compensation insurance companies in an “extensive fraud scheme,” Manhattan prosecutors said Thursday. Labor broker Salvador Almonte, 38, and insurance broker Steven Asvazadourian, 40, denied the employees coverage partly by lying about the size of Almonte’s work force, Manhattan DA Cy Vance Jr.’s office said. That drastically cut Almonte’s workers compensation insurance premiums, saving him millions of dollars. But it also put the workers at risk of not being covered for on-the-job accidents or fatalities. More than a dozen of Almonte’s workers were injured and one died while he was playing games with their worker’s comp, Vance’s office said. New York law requires nearly all employers to carry worker compensation insurance. But not only did Almonte fail to buy the proper coverage — he declined to cooperate with the state board that decides workers’ claims, prosecutors say. Almonte allegedly claimed to state officials his annual payroll for two carpenters and two cleaners was $70,000 per year. But in reality, he had dozens of employees, and his payroll for a typical two-week period was $110,000. Almonte and Asvazadourian pleaded not guilty Thursday to charges including insurance fraud and scheme to defraud in Manhattan Supreme Court. They were released without bail. Almonte is also under investigation by the IRS for failure to pay taxes.

CAMDEN, N.J. – The owner of two defense contracting firms was sentenced to 36 months in prison for providing non-conforming parts for military equipment, illegally sharing sensitive technical information and evading income taxes, U.S. Attorney Craig Carpenito announced today. Roger Sobrado, 49, of Marlton, New Jersey, previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with one count each of conspiracy to commit wire fraud, conspiracy to violate the Arms Export Control Act, and income tax evasion. Judge Hillman imposed the sentence on Sept. 4, 2019, in Camden federal court. According to documents filed in this case and statements made in court: Sobrado was the owner of two companies: Tico Manufacturing Inc. (TICO), a purported manufacturing company, and Military and Commercial Spares Inc. (MCS), a defense contracting company, both in Berlin Township, New Jersey. Sobrado admitted that between January 2011 and December 2015, MCS obtained contracts with the U.S. Department of Defense (DoD) by falsely claiming that the military parts it contracted to provide would be exactly as described and provided by authorized manufacturers. The DoD contracts specified that the parts were critical application items for military equipment, including fighter jets and helicopters. Sobrado recruited various family members to participate in the scheme by establishing companies that contracted with the DoD. Those companies also obtained contracts with the DoD by falsely claiming that the military parts they contracted to provide would be the exact product described and would be provided by authorized manufacturers. In fact, Sobrado used TICO to contract with local manufacturers to supply non-conforming parts to MCS and his family members’ companies at a significantly reduced cost. The non-conforming parts supplied by Sobrado were shipped from New Jersey to various DoD locations around the country. DoD paid Sobrado and his family members’ companies for the non-conforming parts. The family members then paid Sobrado for the non-conforming parts. Sobrado admitted that he deposited some of his business receipts into his personal bank account and that he paid for personal items from his business account without telling his accountant. For tax years 2011 through 2014, Sobrado reported a total taxable income of $1,608,372. He failed to report additional income of $1,182,405, which caused a loss to the United States of $509,962.

Governor JB Pritzker signed legislation today creating a Worker Protection Unit within the Office of the Attorney General which will protect Illinois workers from wage theft and other unlawful employment practices. "When Illinoisans put in a hard day's work, they deserve to be compensated fairly and treated with dignity, and this new Worker Protection Unit will make sure of it," said Governor JB Pritzker. "Attorney General Raoul and Leader Hoffman have led the charge to protect workers' rights, and I'm proud to sign this legislation that ensures the state of Illinois expeditiously prosecutes employers violating state labor laws. Our hardworking residents deserve nothing less." The new unit law gives the Attorney General's office the express authority to investigate and file suit against violators of the Prevailing Wage Act, the Employee Classification Act, the Minimum Wage Law, the Day and Temporary Labor Services Act and the Wage Payment and Collection Act. The new Worker Protection Unit will work collaboratively with the Illinois Department of Labor to detect unlawful conduct but may also take direct legal action against widespread and pervasive wage payment violations and unfair labor practices. It also creates the Worker Protection Unit Task Force within the Office of the Illinois Attorney General to facilitate information sharing and collaboration between local and state prosecutors and regulators as well as promote a statewide outreach and enforcement effort targeting businesses that violate the state's worker protection laws. The task force will report on its work to the governor and General Assembly by December 1, 2020. Senate Bill 161 takes effect on January 1, 2020. "Illinois' diverse workforce is one of our most valuable assets, and I have long been committed to fighting unlawful employment practices, such as businesses stealing wages from and misclassifying their employees to undercut legal protections for workers. These practices harm workers, law-abiding businesses, and the Illinois economy," said Attorney General Kwame Raoul. "I appreciate Governor Pritzker signing this legislation to establish the Worker Protection Unit within the Attorney General's office, and I would also like to thank Representative Hoffman and Senator Curran for partnering with my office to pass Senate Bill 161, which gives my office additional authority to protect the rights of hardworking Illinoisans." "Good, high-wage jobs are the backbone of a stable community. Businesses that step on their workers' rights to widen their margins only weaken Illinois," said House Assistant Majority Leader Jay Hoffman (D-Belleville). "I applaud the governor for signing this legislation into law, reaffirming that Illinois workers deserve fair pay, safe working conditions and freedom from workplace discrimination." In 2018, Gov. Rauner vetoed substantially similar legislation - SB 193 in the 100th General Assembly - sponsored by then-Sen. Kwame Raoul and Rep. Jay Hoffman.

Largest Single Wage Recovery in DOL's 115-Year History Employer Pleads Guilty to Theft of Wages, Convicted of Grand Larceny AGL Industries Will Return Stolen Wages to 499 Workers Governor Andrew M. Cuomo today announced that a joint investigation between the New York State Department of Labor and the Manhattan District Attorney's Construction Fraud Task Force has led to a plea agreement that will return approximately $6 million in stolen wages to about 500 welders and iron workers, the largest single wage recovery in DOL's 115-year history. The investigation began following a referral by the Manhattan District Attorney and Iron Workers Local 361 in February 2018. "We have absolutely zero tolerance for any business that exploits workers and robs employees of hard-earned wages - period," Governor Cuomo said. "With this plea agreement we're holding AGL Industries accountable for its fraudulent practices and returning millions in stolen wages to hundreds of welders and iron workers." The joint investigation revealed that from November 2013 until December 2017, AGL Industries - based in Maspeth, Queens County - cheated workers out of overtime pay and wages owed and reported fraudulent financial information to the state. When workers brought concerns about underpayment to the company, they were told that there was nothing they could do to receive their proper wages. This monumental victory for construction workers—who face some of the most treacherous working conditions of any industry and widespread exploitation—is the latest high-profile takedown by the Task Force aiming to prosecute wage theft to the fullest extent of the law. The structural steel fabrication company has admitted to 3rd Degree Grand Larceny and will pay back the money on a five-year plan, starting with a $1.5 million payment on August 13th. Company official Dominic Lofaso also pleaded guilty to a Class D felony for Grand Larceny. In total, AGL will be responsible for $6.25 million in restitution, which in addition to wage restitution also includes $260,855 in contributions due to the state's Unemployment Insurance fund. Department of Labor Commissioner Roberta Reardon said, "Wage theft and fraud have no place in New York, and unscrupulous companies who break the law will be held accountable. I thank our diligent investigators and Manhattan prosecutors, as well as the heads-up from Local 361 that helped expose these crooks and bring them to justice." Manhattan District Attorney Cyrus Vance said, "This landmark conviction will restore nearly $6 million to workers who were cheated out of their rightful earnings. Hundreds of iron workers and welders will now see their wages restored, thanks to my Office's Construction Fraud Task Force - which has restored approximately $7.4 million to workers since its creation - and the New York State Department of Labor. We are committed to fighting wage theft, which impacts employees across all industries, but is especially common in the construction industry. I urge anyone whose earnings are being stolen to contact our Task Force through WhatsApp at (646) 712-0298, where you can submit tips anonymously." Matthew Chartrand, Business Manager for the Ironworker's Local 361 said, "It is our job as labor leaders to assist all workers when they are being wronged. Through the efforts of the Construction Fraud Task Force, as well as the great team at the Department of Labor, one of the bad players in the construction field is being brought to justice. Thanks to all — this is a great job for the benefit of workers!" In 2018, the New York State Department of Labor collected nearly $35 million and returned that money to approximately 35,000 workers victimized by wage theft and public work violations. Since 2011, DOL has recovered nearly $300 million in stolen wages and returned it to more than 280,000 workers who were cheated by their employers.

TRENTON – Ten New Jersey laborers will be paid $170,000 in back wages after investigators found Tri County Real Estate Co. did not pay workers the legally required prevailing wage on a construction project at the Trenton East/West Senior Apartments. “Public contracting is not a right – it is a privilege,” said Labor Commissioner Robert Asaro-Angelo. “We want all employers to know that our department takes the state’s prevailing wage laws seriously, and we will continue to investigate these matters to protect our taxpayers’ investments.” The construction project received State Economic Redevelopment and Growth Tax Credit Incentive grant funding, and was therefore subject to New Jersey’s prevailing wage laws. The New Jersey Prevailing Wage Act (N.J.S.A. 34:11-56.25 et seq.) establishes wage levels for workers engaged in public works projects to protect workers, promote workforce development and prevent unfair competition for labor. In New Jersey, these rates vary by county and building trade. The initial complaint was referred to the New Jersey Department of Labor and Workforce Development (NJDOL) by the state’s federal partners at the U.S. Department of Labor. As part of the settlement agreement, the company agreed to pay back wages due to employees, and pay $30,000 in administrative fees and penalties. For more information on New Jersey’s wage and hour laws, please visit myworkrights.nj.gov.

June 27, 2019 NJDOL Recovers $30,000 in Back Pay After Investigation Finds Employer Misclassified Workers TRENTON – The New Jersey Department of Labor and Workforce Development’s (NJDOL) Division of Wage and Hour Compliance reclaimed $30,832.37 in back wages for workers at C&N Interiors, LLC. of Boyertown, Pa., after an investigation found the employees were misclassified by their employer as independent contractors and had not been paid the legally required rate for overtime worked. On a private construction project in Livingston, it was determined that three workers who should have been classified as employees were misclassified as subcontractors, and were not properly paid for overtime. On a public project at the Roebling Lofts in Trenton – which is subject to the New Jersey Prevailing Wage Act – 13 workers agreed to sign independent contractor agreements, despite being fully employed by C&N Interiors, with none having an established independent business. All the employees were listed on the company payroll. “Just because a company chooses to use a 1099 form doesn’t excuse that employer from having to follow the law,” said Labor Commissioner Robert Asaro-Angelo. “Our state is a better place to live and work when the field is level, all employers play by the same set of rules, and workers are paid every dollar they earn.” C&N Interiors, LLC was cited for failure to pay prevailing wage, failure to maintain accurate records, unpaid wages, and improper classification of construction workers. The employer conceded the findings of the investigation and agreed to pay the wages due to employees, as well as an additional $12,967.83 in administrative fees and penalties. The unregistered contractor was also debarred. “Wage theft and worker misclassification will not be tolerated in our state, so we encourage all businesses to see that it is in their best interest to fully comply with our labor laws,” said Joseph Petrecca, assistant commissioner of the Division of Wage and Hour Compliance. For more information on New Jersey’s wage and hour laws, please visit myworkrights.nj.gov.

By: Gabrielle Saulsbery June 11, 2019 1:10 pm Navy Contractors Inc. faces $84,183 in penalties from the U.S. Department of Labor’s Occupational Safety and Health Administration for exposing employees to fall hazards on a work site in Lakewood. An OSHA inspector observed employees performing roofing activities without fall protections in January. The investigation conducted thereafter found that Navy Contractors failed to provide fall protection, ensure employees wore hardhats, train employees on ladder safety, and prevent the use of damaged ladders. “Failure to comply with OSHA fall protection requirements jeopardizes the safety of workers,” said OSHA Marlton Area Director Paula Dixon-Roderick in a statement. “Fall hazards are well known, but they can be eliminated when workers are trained and protective equipment is used properly.” The company has 15 days to comply, request an informal conference with Dixon-Roderick, or contest the findings before the Occupational Safety and Health Review Commission. OSHA previously cited Navy Contractors for similar violations in 2018 in both New Jersey and Pennsylvania. Efforts to contact Navy Contractors were unsuccessful. The company does not have a website or a listed phone number.

TRENTON – An Iselin construction contractor has agreed to pay back wages totaling nearly $150,000 to 13 laborers who claimed they were expected to kick back part of their pay to a crew leader while working on prevailing wage jobs. Fine Wall Corp. and its principals—Umukant Shah, Mrudula Shah, and Ronak Shah—also agreed to pay $64,699 in penalties and $37,060 in fees, as part of a settlement brokered by the New Jersey Department of Labor and Workforce Development (NJDOL) following an investigation. The company was barred from bidding on or engaging in public works projects for three years. “This investigation is another example of our tireless efforts to ensure New Jersey working men and women are paid properly. Contractors who wish to work on public works jobs especially, should know we will make every effort to root out unscrupulous employers to protect workers and level the playing field for law-abiding contractors,” said Labor Commissioner Robert Asaro-Angelo. Fine Wall had been engaged to work on 15 prevailing wage public works projects in Bergen, Essex, Hudson, Middlesex, Morris, and Union counties. As a public works contractor, Fine Wall was required by law to pay its workers the prevailing wage, set locally, for the work they performed. A complaint by three employees who claimed they were being paid less than the prevailing wage rate on multiple public works sites triggered NJDOL’s investigation. The back wages due to the workers varied, depending on how much each was paid for their hours of work on the prevailing wage jobs, ranging from a high of $52,210 in back pay to a low of $3.56 due. Besides the prevailing wage violations, the investigation also found that several workers were improperly classified for their craft. This settlement comes on the heels of two recent actions demonstrating NJDOL’s bold new enforcement approach to protect taxpayers’ investment in publics projects. The Wage and Hour Division last month barred two contractors from engaging in public works projects as a result of violations in other jurisdictions, and on March 27, the state Attorney General’s Office obtained a guilty plea and recommended prison time for a public works contractor who acknowledged not paying prevailing wages on a government contract.

TRENTON – The New Jersey Department of Labor and Workforce Development’s Wage and Hour Compliance Division has barred two public works contractors from doing business in the state for violations outside the state’s prevailing wage law, heralding a tough and progressive new enforcement approach against dishonest contractors. The cases against drywall contractor P& B Partitions and electrical contractor MJK Electrical Corp., both of West Berlin, were settled last month, with each contractor agreeing to a temporary revocation of their registration for violations outside prevailing wage law. “As I have often said, working on public projects is a privilege, not a right,” said Labor Commissioner Robert Asaro-Angelo. “These cases signal a new and bold effort to ensure that privilege is extended only to contractors who follow our laws, and pertinent laws in other jurisdictions.” P & B Partitions’ two-year revocation follows a civil action in Massachusetts in which the company allegedly failed to pay proper overtime, resulting in $158,139 in back wages and $42,350 in penalties after a ULDOL investigation under the Fair Labor Standards Act. The case was a consequence of a Memorandum of Cooperation signed by Asaro-Angelo and USDOL officials to solidify cooperation between the two agencies and enhance the enforcement capabilities of state and federal labor laws. In the case of MJK Electrical, the Labor Department’s enforcement action followed a guilty plea by the firm’s vice president, George Peltz, to federal tax evasion, failing to pay payroll taxes, theft from an employee benefits plan, and unlawful payments to a union official. The company, which indicated its intent to buy out Peltz, agreed to a three-year registration revocation, ending in March of 2022. New Jersey already has one of the strongest prevailing wage laws in the country. The Public Works Contractor Registration Act requires all contractors, including named subcontractors, to register with the Labor Department before submitting price proposals or engaging in public works contracts exceeding the prevailing wage threshold of $15,444 for municipalities and $2,000 for non-municipal work.

TRENTON – Attorney General Gurbir S. Grewal announced that an Ocean County construction contractor pleaded guilty today to purposely not paying prevailing wages on a government contract valued over $75,000. As part of his criminal activity, the contractor falsified payroll records for the public contract to cover up the fact that he paid most of his employees only a fraction of the wages required under the Prevailing Wage Act, while not paying others at all. It is believed that many of the defendant’s employees were undocumented immigrants and he took advantage of their status. Albert Chwedczuk, 45, of Toms River, N.J., pleaded guilty to an accusation charging him with second-degree false contract payment claims before Superior Court Judge Morris G. Smith in Camden County. Under the plea agreement, the state will recommend that Chwedczuk be sentenced to three years in state prison. He must pay a total of up to $200,407 in restitution to his workers. Sentencing for Chwedczuk is scheduled for Sept. 6. “I am committed to using all available tools, including New Jersey’s strong criminal laws, to protect our workers, protect our immigrants, and protect the integrity of our public contracts,” said Attorney General Grewal. “When contractors receive taxpayer dollars for a public project, they promise to pay prevailing wages to employees for all their hard work. But this employer cheated his workers and hoarded public funds for his own enrichment. This case is a message to all employers that we will not tolerate contractors underpaying their workers and lying about it.” “We are sending a loud and clear message to dishonest contractors that this type of crime does not pay,” said Director Veronica Allende of the Division of Criminal Justice. “We want unscrupulous employers to know that we will work closely with the Department of Labor and Workforce Development to investigate contract fraud and prevailing wage violations and hold bad actors accountable.” Labor Commissioner Robert Asaro-Angelo said, “Our laws are clear: contractors are not guaranteed public financing of their projects, and if they want to receive public dollars they must pay their workers according to the letter of the law. This contractor’s actions were in complete defiance of our laws and principles, and that is why the state recommended a significant prison sentence. We are eager to work with our partners in the Attorney General’s Office to protect workers by ensuring unscrupulous contractors face significant penalties for crimes against New Jersey taxpayers.” Deputy Attorney General Christopher J. Keating prosecuted the case and took the plea for the Division of Criminal Justice Specialized Crimes Bureau. The case was referred to the Division of Criminal Justice by the New Jersey Department of Labor and Workforce Development (NJLWD), Division of Wage and Hour Compliance, which initially investigated the violations of the Prevailing Wage Act. The state investigation revealed that Chwedczuk knowingly failed to pay his employees up to $200,407 in wages on a prevailing wage public contract in 2015 and 2016. As of 2014, Chwedczuk was legally barred from obtaining or performing work on public contracts due to his prior violations of the Prevailing Wage Act with respect to his businesses Ren Construction LLC and Real Construction LLC. Nevertheless, he used a new business entity he created, Bella Group LLC, to obtain a public subcontract worth $400,000 to provide masonry work for the Cooper Camden Student Housing project on South Broadway in Camden. Once Chwedczuk obtained the public subcontract using Bella Group LLC, he paid most of his employees only a fraction of the prevailing wages they were entitled to be paid, while not paying others at all. To cover up his violations of the Prevailing Wage Act, he submitted certified payrolls containing false information to the general contractor on a weekly basis. In addition to producing false records, Chwedczuk instructed several employees to provide false information to an NJLWD investigator regarding the wages they were receiving. Detective Christine Sullivan and Deputy Attorneys General Christopher J. Keating and Jeffrey J. Barile conducted the investigation for the Division of Criminal Justice Specialized Crimes Bureau, under the supervision of Acting Deputy Chief of Detectives Rich King, Deputy Chief of Detectives Weldon Powell, Bureau Chief Andrew Johns, and Acting Deputy Bureau Chief Valerie Butler. Senior Field Representative Raul Virella conducted the investigation for the Department of Labor and Workforce Development, Division of Wage and Hour Compliance, under the supervision of Section Chief Kevin Triplett of the Public Contracts Section of the Division of Wage and Hour Compliance.

A worker who fractured several vertebrae in an on-the-job fall was awarded $7.68 million on Jan. 15 in Schultz v. Atlas Homes LLC. The jury’s apportionment of some liability to the plaintiff reduced the sum, though the plaintiff now is seeking interest, fees and costs. According to the plaintiff’s lawyer and electronic court documents, on April 27, 2015, plaintiff Duane Schultz was working at a residential construction site in Spotswood for a subcontractor to defendant Atlas Homes, the North Brunswick-based builder that owned the property and the general contractor at the site. While working on the second floor, Schultz fell backwards off the building, about 20 feet, said Schultz’s lawyer, James Pagliuca of Gill & Chamas in Woodbridge. Schultz was hospitalized with three total vertebral fractures at the thoracic and lumbar levels and four rib fractures, and underwent a three-level fusion with the implantation of rods and screws, Pagliuca said. The suit named Atlas and its owner, Arthur Lauri II. It claimed that the defendants violated Occupational Safety and Health Administration standards by failing to use fall-protection measures and temporary railings at the site. The defendants contended that the plaintiff’s own negligence contributed to the fall, and contended that it was the subcontractor’s responsibility to ensure the use of worker safety measures, according to documents. After a six-day trial before Middlesex County Superior Court Judge Lisa Vignuolo, the seven-member jury attributed 85 percent of the fault to the defendants and 15 percent to Schultz, and awarded $7.5 million in non-economic damages. The judge added $177,709 in past medical expenses. Schultz’s liability reduced the verdict to $6.53 million. A proposed order of judgment filed by Pagliuca on Jan. 17 seeks $697,305 in prejudgment interest, as well as attorney fees and costs, based on the offer-of-judgment rule because the verdict was more than 20 percent higher than a $1 million offer of judgment made by the plaintiff in 2016, according to documents. The defendants were covered by Cumberland Mutual Fire Insurance Co. and defended at trial by William Bloom of Methfessel & Werbel in Edison. Bloom didn’t return a call about the case. Pagliuca handled the case along with Andrew Chambarry of the same firm. — David Gialanella

News Release U.S. DEPARTMENT OF LABOR INVESTIGATION RESULTS IN $158,139 IN BACK WAGES AND DAMAGES FOR 50 EMPLOYEES ON MASSACHUSETTS CONSTRUCTION PROJECT BOSTON, MA – After an investigation by the U.S. Department of Labor's Wage and Hour Division (WHD), the U.S. District Court for the District of Massachusetts has ordered P & B Partitions Inc. and its owner Ronald H. Biglin Jr. to pay $158,139 in back wages and liquidated damages to 50 employees, to resolve willful violations of the Fair Labor Standards Act (FLSA). The company – based in West Berlin, New Jersey – was also assessed $33,880 in civil money penalties. The employer worked on the City Square apartment construction project in Worcester, Massachusetts, between August 2016 and April 2018. WHD investigators found that the employer paid employees - including laborers, dry wall hangers, carpenters, and a lull operator - straight time in cash when they worked overtime hours. In addition, the employer failed to maintain records of the cash payments, failed to track accurately employees' work hours, and falsified payroll records. "Employers are responsible for paying their employees all the wages they have legally earned," said Wage and Hour Division District Director Carlos Matos, in Boston. "The U.S. Department of Labor is committed to protecting the American workforce, and will continue to provide education and tools to employers to help them understand their responsibilities and how to comply with the law." "The U.S. Department of Labor will take appropriate steps to enforce the law to ensure that contractors pay their employees correctly and don't break the law to gain an unfair advantage over law-abiding competitors," said Regional Solicitor of Labor Maia Fisher, in Boston. Read the complaint and the consent judgment and order. Employers who discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program. For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at https://www.dol.gov/whd including a search toolto use if you think you may be owed back wages collected by the Division. # # # Acosta v. P & B Partitions Inc. and Ronald H. Biglin, Jr. Civil Action Number: 1:18-cv-12398. Agency Office of the Solicitor Wage and Hour Division Date January 29, 2019 Release Number 18-1868-BOS Contact: Ted Fitzgerald Phone Number 617-565-2075 Email fitzgerald.edmund@dol.gov Contact: James C. Lally Phone Number 617-565-2074 Email lally.james.c@dol.gov

-News Release- TRENTON – The New Jersey Department of Labor and Workforce Development and the U.S Department of Labor pledged a historic new level of cooperation to protect New Jersey’s economy by signing an agreement Friday to work together to end illegal employee misclassification. By misclassifying workers as independent contractors – workers who file 1099s, not W2s – employers avoid paying unemployment and disability taxes, costing state and federal taxpayers untold millions of dollars. In New Jersey alone, auditors have identified more than $80 million in underreported employer contributions since 2010. “In New Jersey, we promote fairness and fight discrimination. Today’s action is another great step forward to ending a practice that is not only unfair, but illegal. We are proud that this joint state-federal action will help protect New Jersey workers by putting an end to unfair labor practices,” said Gov. Phil Murphy. Workers misclassified as independent contractors are ineligible for the wage and overtime protections afforded to employees, and can find themselves underpaid and without basic labor and OSHA protections. Additionally, independent contractors are not covered under the National Labor Relations Act, which makes it more difficult for them to organize and collectively bargain with an employer. “One of the Labor Department’s core responsibilities is to safeguard workers from unscrupulous business practices, and to support responsible businesses by making sure everyone plays by the same set of rules,” said Labor Commissioner Robert Asaro-Angelo. “This partnership with U.S. DOL will help ensure that our business partners and the state’s workers all get the protections they deserve.” Misclassification violations can happen anywhere, but those who work in construction, transportation, information technology, and other in-demand businesses appear to be most vulnerable. The memorandum of cooperation signed by the two agencies adds teeth to labor enforcement efforts by promoting coordinated investigations and shared resources. The partnership sends a strong message to unscrupulous business owners that misclassification laws are being strictly enforced. “The agreement we signed today with the New Jersey Department of Labor and Workforce will amplify the effectiveness of both agencies,” said DOL Wage and Hour Division Regional Administrator Mark Watson. “The U.S. Department of Labor looks forward to improving coordination and increasing joint outreach and compliance assistance efforts with all of our state partners.” Additionally, the Governor’s Task Force on Employee Misclassification met this week, chaired by Labor, bringing together representatives from the Departments of Agriculture, Economic Development, Human Services, Transportation, Treasury, and the Attorney General’s office to collaborate on strengthening misclassification enforcement. This inaugural meeting followed an executive order signed in May by Gov. Murphy establishing a cross-departmental task force. It ushers in a new era of cooperation among state agencies in the fight for New Jersey workers and responsible employers.

The California Department of Industrial Relations announced Tuesday that the state's Labor Commissioner's Office has issued wage theft violation citations in the amount of $1.9 million to Fullerton, California-based Fullerton Pacific Interiors for failure to fully pay 476 employees on 26 southern California construction projects from August 2014 to June 2016. Investigators found that Fullerton failed to provide its drywall installers and tapers with legally required rest periods, paid almost 290 workers merely a daily rate that did not include compensation for overtime work and paid less than the minimum wage to another 28. In California, most workers are entitled to either payment for a 10-minute rest period for every four hours worked or an extra hour of pay for days when those paid breaks are not provided. Out of the $1.9 million penalty, Fullerton owes almost $800,000 for rest periods, almost $387,000 for unpaid overtime, more than $692,000 for wage statement violations and more than $14,000 for shortages of minimum wage pay. The company must also pay $72,000 of civil penalties. The state began its investigation after receiving worker complaints through the nonprofit Carpenters Contractors Cooperation Committee. LEARN MORE Dive Insight: "Wage theft" is the umbrella term for when contractors intentionally underpay their employees, and there are initiatives underway around the country to battle it. At the forefront of efforts to make sure workers are paid a fair wage is Manhattan District Attorney Cyrus Vance Jr. At the end of last year, Vance said the Manhattan DA's office would actively pursue cases of wage theft. That announcement came at the same time as news that Vance's office and officials in surrounding counties had charged area construction companies and their owners with stealing approximately $2.5 million in wages from more than 400 construction workers. The amounts ranged from $13,000 to $700,000 per company and included checks returned for insufficient funds and failure to pay prevailing wage or overtime. In May, Vance's office announced that it had charged a city contractor and some of its executives in a wage fraud case worth $9.5 million. Prosecutors alleged that Parkside Construction, from 2014 to 2017, underpaid more than 500 workers $1.7 million and underreported its payroll to the New York State Insurance Fund by $42 million in order to get out of paying almost $8 million in workers' compensation insurance premiums. During the period in question, Parkside and affiliated companies performed more than $100 million of concrete and masonry work on about seven city high-rise projects.

For years, various reports have indicated that the contract workforce is growing rapidly in the U.S. On Thursday, the Labor Department poured a bucket of cold water on that notion. It released a report showing contract workers make up a slightly smaller share of the workforce than the last time the survey was done 13 years ago. It said that last year, 10.1 percent of the workforce was independent contractors — down from 10.7 percent in 2005, the last time it conducted the survey. That represents about 15.5 million people in 2017, compared with 14.8 million in 2005, when the overall U.S. workforce was smaller. Those figures appear to go against other surveys showing huge growth in contract work, which is transforming the U.S. labor market. A survey conducted in December by NPR/Marist found that contract work makes up 20 percent or more of the U.S. workforce. Why the seemingly large discrepancy? Many point to the government's methodology. The Labor Department, for example, did not include people who augment their income through contract work, or who did not work within the week the survey was conducted. That would not include many of the people who work for online platforms such as Uber, TaskRabbit, or food delivery apps, for example. It also excludes those who might have another primary job. Based on other surveys and estimates, including those workers would roughly double the size of the estimated contract workforce. Another reason the numbers look lower than expected is that today's job market is far stronger than in 2005, when the Labor Department last conducted its survey. Sam Katzen, a spokesperson for Fiverr, a marketplace for freelancers to find work said the numbers are misleading. The report "doesn't really represent how work has changed since this report last came out," he said. Alastair Fitzpayne, director of the Aspen Institute's Future of Work Initiative noted that unemployment is "historically low." And employers are actively competing for workers, which means traditional employers are likely offering more full-time positions to attract and retain talent. If the economy were to weaken, Fitzpayne said, the number of contract workers would also likely spike. The Labor Department's report underscores other data showing a minority of contract workers receive employment benefits. It found only 41 percent of contract workers received health insurance through their employer. (The NPR/Marist poll found 51 percent do not receive health care and other benefits through their jobs.) Not everyone agrees the government's latest report is misleading. "The whole idea that we're all becoming freelancers is just that much: hype," said Lawrence Mishel, a fellow at the Economic Policy Institute. But Mishel does agree many more workers are using contract work to supplement their income. And that, he says, speaks to other problems in the job market. "The fact that alternate work has not grown does not diminish one iota the fact that we really need to pay attention to wage stagnation and deteriorating job quality," Mishel says. Worker advocates say the government's report and other data will help shape policy discussions about how to address the needs of workers who are largely not covered by existing workplace benefits and legal protections. Jennifer Curry, a senior director at Samaschool, a San Francisco training program for low-income contract workers, estimates the government left out 25 million to 30 million freelance or contract workers who do some part-time work. "Without capturing those other millions of people who are doing this work on the side, it doesn't really give us the full picture," she said. "So it doesn't tell us enough about their training needs, the supports they need, the benefits that they're lacking. We definitely need to know more."

TOMS RIVER - A Little Egg Harbor couple admitted Tuesday to stealing more than $1.4 million from more than 20 victims of superstorm Sandy who hired them to fix their homes. They used the money to gamble at seven Atlantic City casinos and buy a $17,000 diamond ring and other luxury goods, all the while abandoning jobs or never starting them, authorities said. Jeffrey Colmyer, 42, and Tiffany Cimino, 34 pleaded guilty to theft by failure to make required disposition of property before Superior Court Judge Guy P. Ryan, sitting in Toms River. Colmyer also pleaded guilty to money laundering as a principal of the couple’s home improvement contracting businesses, Rayne Construction Management Services LLC, and Colmyer & Sons LLC. That charge alone carries a maximum prison term of 10 years. Sentencing is scheduled for Sept. 7. “Colmyer and Cimino heartlessly preyed on Sandy victims whose homes had been destroyed, stealing the relief funds that were the lifeline these victims needed to rebuild in the aftermath of the historic storm,” said Attorney General Grewal in a statement. “By sending Colmyer to prison, we deliver a strong deterrent message that anyone willing to sink so low as to steal disaster relief money from victims will face a stern reckoning.”

A construction worker who suffered spinal injuries after a fall at a building under construction settled his Middlesex County suit, Pinho v. Meridia Metro Hackensack, for $1.265 million on March 21.