Pennsylvania contractor pays $ 20.7 million in wage theft case

Diving letter:

  • Pennsylvania road and bridge contractor Glenn O. Hawbaker has not filed a challenge to the largest prevailing wage theft in US history and has been convicted of the case, according to a state release Attorney General Josh Shapiro.
  • Charges were brought against Hawbaker in April. Last week, the State College, Pennsylvania contractor agreed to refund nearly $ 20.7 million to 1,267 workers, according to the announcement.
  • In addition, the law firm faces five years probation and other conditions, such as the appointment of a company monitor.

Dive Insight:

Hawbaker has allegedly violated the Pennsylvania Prevailing Wage Act and the Davis-Bacon Act, which aim to protect workers by ensuring that all contractors working on state or state sponsored jobs pay the same wage rates as state and federal agencies to be determined. Contractors can cover part of the required wages by providing “fringe benefits” such as health and pension contributions.

After a three-year investigation, Hawbaker pleaded four charges of wage theft from his workers. The no contest Plea means that the defendant does not plead guilty but accepts a conviction or conviction as if he had.

Shapiro’s office said the breach occurred when Hawbaker was contributing to retirement accounts for all of its employees – including owners and executives Use of funds intended for the retirement of the predominant wage workers.

Shapiro also brought charges of theft of funds intended for the predominant health and welfare benefits of wage laborers and used them to subsidize the cost of the self-financed plan that covers all employees. The company hushed up the system by artificially inflating costs into the millions and taking out loans for prohibited costs, Shapiro’s office said.

When the charges were first filed in April, investigators found that Hawbaker’s practices had lasted for decades, but the statute of limitations meant that the contractor could only be indicted for the past five years. Founded in 1952, Hawbaker is one of the largest contractors in completing projects for the Pennsylvania government, receiving an estimated $ 1.7 billion in contracts between 2003 and 2018.

In a statement shared with Construction Dive, Hawbaker said it followed lawyers’ advice and had federal regulators review their labor practices, leading company officials to believe they had followed all laws.

“Our company’s decision not to contest competition avoids lengthy legal disputes that could have jeopardized the existence of our dedicated employees,” the statement said. “We continue to believe that we have met all fringe benefits requirements.”

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