Wage theft is more common than you think, often because employers cover their tracks in subtle ways. That seems to be the case with Penhall Company, a contractor on the Sound Transit East Link Extension rail project, accused of underpaying 37 workers hundreds of thousands of dollars in wages and benefits.
The Washington State Department of Labor & Industries (L&I) launched an investigation into the wage theft following a complaint from one of Penhall’s employees in early 2019. L&I investigators found that the contractor had inappropriately classified the employees for the work they were doing, and as a result was paying them less than they were entitled.
Instead of paying them $58.69 an hour as surveyors, which accurately reflected the job description for the work they were doing, Penhall paid the workers $38.57 per hour as laborers. The investigation, which covered a period between July 2017 and December 2019, found that the company owed the 37 workers $648,609.68 in wages and interest.
L&I has ordered the contractor to pay that amount, plus more than $150,000 in fines for “failure to pay prevailing wage and filing falsified certified payroll reports,” according a news release from the state agency.
In most cases, according to L&I, contractors submit payroll records when they are requested by state investigators. But Penhall refused to hand over the documents until L&I obtained a subpoena.
The $800,000 fine represents one of the biggest citations by L&I’s Prevailing Wage Program in recent years.
L&I enforces Washington’s prevailing wage law, which protects workers by setting wages for specific work on public projects. The law also helps ensure that contractors have a level playing field when bidding on public projects.
Prevailing wage training and resources available from L&I include a variety of training modules, a recently revised booklet on prevailing wage law, and a revised website with specific information for contractors, workers, and other audiences.
Penhall is appealing the notice of violation.
Emery Reddy helps workers. Call us for a free consultation if you have an L&I, workers’ comp, or other employment law claim. You won’t get better advice.