Lawsuit Alleges Wage Theft at Virginia University Construction Sites
Workers are suing two Virginia-based construction companies in a class action lawsuit over allegations of wage theft.
Workers claim construction company Agent Wall Systems and B&A, a firm that hires labor for construction jobs, misclassified them as independent contractors, rather than employees.
“They were not paid overtime premiums for hours worked over 40,” said attorney Matthew Handley, who is representing the workers in the lawsuit.
Being classified as contractors instead of employees meant the companies also didn’t pay regular benefits: Social Security, unemployment insurance, and workers comp. Handley said, “As a result, [they] denied these workers thousands of dollars of unpaid wages.”
According to the lawsuit, the companies contracted with Virginia Commonwealth University for the recent rebuilding of the Gladding Residence Center. The companies were also hired for the construction of the Fine Arts Center and library expansion at Christopher Newport University, the Science Building at Norfolk State and the President’s House at Old Dominion University.
NSU and ODU did not respond to VPM’s request for comment. Spokespeople for VCU and CNU declined to comment because they are not parties to the lawsuit. CNU added that the university is “not aware of any wage theft allegations on any campus construction projects.”
In a phone call, B&A Vice President Milton Andrade confirmed that his company hires workers as independent contractors using 1099 tax forms. For this reason, he says B&A does not deduct taxes from workers’ paychecks. The company also does not pay workers overtime, although he says some often work nearly 50 hours per week.
“You have the right to be paid overtime. It’s true. If you are an employee,” Andrade said in Spanish over the phone. “If you are an employee, then you have the right to be paid overtime, and maybe to get healthcare. But those benefits are if the company wants to give them.”
Andrade says B&A construction workers often use company machinery and follow the instruction of on-site foremen, signs of being an employee according to IRS criteria. But he says workers are hired as independent contractors because they are assigned to temporary projects.
A “wage theft law” that went into effect in July improved workers’ ability to sue employers over wage theft by amending existing employment laws. Employers are now liable for unpaid overtime wages plus liquidated damages and interest.
“The law passed on the right to the worker, not the company. The law took rights away from the company and gave them to the worker,” Andrade said. Although employment law holds the employer, not the employee, responsible for classification, he blamed the workers: “If [they] didn’t want to sign a 1099 at the time, they should have raised their voice and asked for a W-2.”
Agent Walls Systems did not respond to VPM’s request for comment.
Handley says the issue of wage theft has reached “an epidemic level” on Virginia construction sites in recent years, with Latino and immigrant workers facing the brunt of these practices.
“It has become standard practice for construction companies to hire labor brokers, who serve as the formal employers of these construction workers, who are primarily recent immigrants from outside the US and are normally very subject to exploitation by their employers,” he said.
Handley says an initial hearing has not yet been scheduled for the class action lawsuit, and that there will be an opt-in period of about four months for other workers to be included in the suit.