A Go Local investigation has found truth to labor leaders’ claims that Rhode Island contractors are going unpunished for failing to pay prevailing wages on publicly funded projects.
According to the investigation, the Rhode Island Department of Labor has failed to collect $1 million in fines and back wages from six contractors. Stunningly, the contractors are neither appealing their cases nor setting up payment plans; they’re just simply refusing to pay.
Michael Sabitoni, President of the Rhode Island Building and Construction Trades Council, says this unscrupulous behavior is commonplace in RI:
“There’s no deterrence. You get fined. You just keep going about your business.”
Records show that these contractors do not represent the entirety of the state’s wage theft problem:
Another 16 companies who have violated other labor laws—mostly dealing with unpaid wages or employee misclassification—have amassed $135,000 in back wages and nearly $40,000 in administrative fines in years-old cases which have been referred to the state Attorney General for legal action, DLT records show.
The problem comes down to a lack of enforcement throughout the state. But Sabitoni does not blame the Division of Workforce Regulation and Safety. Rather, they are trying to do the most with the little they have, he says:
“They’re not doing the job for one reason: they do not have enough staff,” he said, adding that state officials that are doing their best with limited resources. “I know the people over there. They’re all good people.”
He said the staff available to the division that handles such issues—formally, the Division of Workforce Regulation and Safety—has been “decimated” over the last 15 years, much of that under the administration of former Gov. Don Carcieri.
“It’s not because of the quality of the staff,” Sabitoni said. “It’s the quantity.”
Like so many other states, employee misclassification is playing into the wage dodging efforts of contractors employers. By cutting labor costs through this illegal practice, an unfair advantage is created out of thin air for companies that refuse to play by the rules:
They were being outbid by entities that were cheating,” said Richard Sinapi, a lobbyist for the Rhode Island Association of General Contractors and the New England Mechanical Contractors Association. “They either weren’t paying prevailing wages or they were misclassifying workers.”
The last legislative session in Rhode Island provided new laws aimed at forcing employers to pay correct wages. Two specific laws include revoking licenses of delinquent contractors and raising fines for misclassification.
The toughest measure to pass is a new law aimed at deterring delinquent contractors. Under the law, which took effect this summer, contractors that owe outstanding wages or “other sums” levied by the Department of Labor and Training, will have their licenses revoked or suspended by the Contractors Registration Board.
Another law institutes stiffer penalties for incorrectly classifying workers as independent contractors rather than employees. First offenses are $500 to $3,000 per employee; second offenses are as much as $5,000 per employee.
To read more findings from Go Local‘s investigation, visit their website.