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Dozens of Wage Theft Investigations Conducted in DC Area

NBC Washington D.C. logo NBC Washington D.C. 8/5/2021 Scott MacFarlane, Rick Yarborough and Steve Jones
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Authorities in the Washington, D.C., region have investigated more than 50 possible cases of wage theft since 2017, including a range of complaints from construction employees working from the nation's capital through Richmond, Virginia. 

Raul Castro, a local labor union leader, said wage theft often targets immigrant communities, who are often less willing or able to protest or challenge employers.

"Wage theft [is] still rampant around the area when workers need the money the most," Castro said.

One employee who said he’s been a victim spoke to the I-Team, saying, “I must say [at] 90% of the construction sites, this is happening right now.”

Virginia recently toughened its laws and penalties for wage theft.

D.C. is one of the most progressive in the nation when it comes to wage theft, according to D.C. officials. Employers who fail to legally pay workers can be liable for up to four times the amount of unpaid wages and administrative penalties.

The I-Team found at least 20 of the cases have resulted in legal action from the D.C. Office of Attorney General since 2019, while several other wage theft allegations have triggered pending federal civil lawsuits by groups of workers.   

Settlements led to $3.2 million in restitution for workers and nearly $2.7 million in penalties in the District in the last four years.

Immigrant Employees Often Victims

D.C. Attorney General Karl Racine describes wage theft as a "massive problem," specifically targeted at lower-income, immigrant employees in the region.

"The workers are not getting overtime. They’re not getting paid days off. Often times they’re not getting workman’s comp," Racine said, describing an under-the-table system of paying some of the frontline construction workers and laborers suffering wage theft in the region.

In some of the cases reviewed by the I-Team, workers were paid partly in cash. In other cases, the workers allegedly earned less than minimum wage, did not have proper taxes withheld or were misclassified as independent contractors.

“When this happens, we all suffer, because the tax revenues that then come in to the city coffers are much less than what they otherwise should be," said attorney Matthew Handley, who has filed recent civil lawsuits alleging wage theft by construction contractors in Virginia and Washington, D.C. 

Handley said that when a worker is misclassified as an independent contractor, they don't always get the allowed overtime pay or health benefits that a full-time employee would get under the law.

Handley’s lawsuits allege a series of incidents in which subcontractors hired for a project then hired labor brokers to find workers. Racine said those labor brokers often decide how the workers are paid.

High-Profile Project

Among the many projects referenced in Handley’s lawsuit: the construction of a new office complex for the Virginia General Assembly.  

In the lawsuit, construction workers accuse a subcontractor and labor broker of failing to maintain proper records or pay full wages, including overtime pay. The  suit alleges, "Defendants were required by law to provide plaintiffs and other similarly situated individuals ... pay stubs detailing their hours worked and their pay rate, but failed to do so."

The labor broker declined comment. The subcontractor told the I-Team it denied the allegations in the lawsuit and that "it acted properly in its contracting and payment practices. We look forward to defending our position in this matter."

Neither the general contractor nor the Virginia state government are named as parties or defendants in the suit. The general contractor had no comment on the case.

Virginia's House speaker and Senate majority leader declined comment, referring the I-Team to the state's Department of General Services.

Officials with the Department of General Services and the Virginia Employment Commission told the I-Team they are aware of the allegations and that an investigation is ongoing.

“We take any allegations of wage theft seriously. When we were made aware of these allegations last year, we reported it to the proper authorities. We would take those same steps any time we are made aware of any such allegations,” said a Department of General Services spokeswoman.

Red Flags

An employee who said he worked on the project at the General Assembly complex for another labor broker told the I-Team, “They pay me, but I don't know if they pay me all the overtime. I don't know."

The I-Team watched as that worker collected his payment from a small market near Richmond, partially in cash. 

Racine said, "That's a red flag. It's not always the case that a wrong or wage theft has occurred, but that certainly is an indicator that someone is engaging in wage theft."

We reached out to the owner of that labor broker company several times, but he did not call us back.

The I-Team also watched on multiple occasions a series of workers collecting payments out of the window of a pickup truck in a furniture store parking lot near Chesterfield. Handley and Racine said such informal payment methods are often a sign of wage theft.

When the I-Team questioned the man who appeared to be distributing the payments, he said everything was "on the level."

A woman who said she's worked for the company for 12 years jumped in, adding no laws were being broken.

We also reached out to the company’s attorney, who had no further comment.

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