What happens when a contractor fails to pay prevailing wages and submit certified payroll reports?

When a contractor works on Federal and/or state funded construction projects and fails to pay the appropriate “prevailing wages” or  overtime to their employees and/or fails to submit the required “certified payroll reports” to the appropriate agencies —- well it’s pretty serious business.

The following article from SouthCoastTODAY.com will give you a little insight into just how serious it can be.

New Bedford drywall firm settles wage problem

By Staff Report

June 17, 2009

BOSTON — Attorney General Martha Coakley’s Office has reached a settlement with a New Bedford drywall company resolving allegations that the company failed to pay employees the prevailing wage rate, the correct overtime rate and failed to keep proper payroll records for work performed at four Massachusetts public works job sites.

Garcia Drywall Inc. and its president, Emanuel Garcia, have agreed to pay more than $41,600 in restitution to the affected employees and more than $18,000 in fines for intentionally violating the Prevailing Wage, and Overtime and Record Keeping Laws, Coakley’s office said in a press release.

In addition, Garcia Drywall has agreed to a one-year debarment, which prevents them from bidding on any public construction projects, as well as from accepting any contracts for public work for a one-year period in the commonwealth, the Attorney General’s Office said.

In an e-mail to The Standard-Times, the owners of Garcia Drywall wrote that they “truly regret the past errors in interpretation applied in our prevailing wage and overtime payment practices. Upon notification of a complaint, Garcia voluntarily came forward to resolve the aforementioned errors and are in the process, with the Attorney General’s Office, of making restitution to the affected past and current employees.”

The company owners went on to say they “regret any hardship that this may have caused to those affected employees and (we) are committed to complying with the laws of the commonwealth now and in the future.”

In January, the Attorney General’s Office received a complaint alleging that Garcia and his company failed to pay the prevailing wage rate to employees at public construction projects. Investigators from the Attorney General’s Fair Labor Division reviewed a self-audit prepared by the company and discovered that the company had misclassified 26 employees at four public construction sites, including two separate projects at UMass Dartmouth; the Massport State Police Station at Logan Airport; and the Prattville Apartments in Chelsea.

Additionally, according to the press release, Garcia Drywall failed to submit certified payroll records to the awarding authorities at these job sites. Investigators also discovered that the company failed to pay time and a half to employees for working more than 40 hours in a work week.