That’s where an outfit called Cash Liquidators out of Forsyth, Georgia got caught violating Connecticut workers’ compensation law and was hit with the largest labor fine issued by this state in the past two years — a whopping $36,000.
The Georgia company was one of eight different contracting firms cited for violations on that hotel job on Dec. 2, 2011, and all of them were from outside Connecticut. State Department of Labor inspectors issued stop-work orders to those companies until the violations were corrected and the fines paid up.
This kind of stuff isn’t happening just in ritzy places like Greenwich or on high-profile jobs. It’s going on all over Connecticut and very often involves companies coming in from outside the state.
In the past year, DOL officials have handed out 281 stop-work orders to contracting companies found to be violating state labor laws, and 116 of them were from outside Connecticut. That’s a 42 percent rate, and state labor officials say that’s not unusual.
“It’s a calculated risk that they won’t get caught,” says Gary Pechie, director of the DOL’s wage and workplace standards division.
He says contractors desperate for work in these hard times often try to not pay for workers’ compensation or violate other labor law requirements to cut costs, allowing them to under bid more legitimate firms and thus get the jobs.
“And if they do get caught, they just pay up,” adds Pechie.
Very often, a contractor who gets hit with fines can negotiate dramatic reductions in the amount they actually pay. State labor officials say they are trying to get companies to comply with the laws and that often out-of-state firms claim they’re unfamiliar with Connecticut laws or that they made honest mistakes. The result is that fines almost always get scaled back.
Cash Liquidators, for example, ended up paying a reduced penalty of only $4,800 of that original $36,000 fine.
G.J. Courcy Erectors of Plattsburg, NY, which is listed with the second biggest fine since July 2010, paid just $3,300 of its original $34,500 DOL fine. This company was cited for violations in November 2011 while working on another very high-profile and now controversial job, the new NBC Sports studio project in Stamford.
One worker died after falling from the roof of the old Clairol factory that’s being turned into a sports broadcasting facility. That tragedy coincided with worker complaints that their paychecks from one of the contractors on the job kept bouncing.
G.J. Courcy’s problems weren’t related to the bounced paychecks. Pechie says its violations, like those of Cash Liquidators, involved failure to make required workers’ compensation system payments. Penalties for that scam are $300 per day, per employee — which can add up real fast.
Connecticut’s labor agency and federal labor officials have been making a concentrated effort in the last few years to try and put a halt to these kinds of contracting scams. Labor officials say the recession has made things worse because there are lots of construction workers looking for too few jobs, and companies are trying to take advantage of that and skirt the labor laws as well.
“I think we’re making an impact,” says Pechie, but he adds that, “It’s still a business model.”
Since 2007, when the first stop-work order in this campaign was issued, about $285,000 in civil penalties have been collected. Pechie says about $150,000 of that money has been collected in just the last 10 months.
When labor inspectors find potential tax problems during a check at a construction site, they send that information to Connecticut’s tax agency for possible action.
Most of the time, says Pechie, once a contractor gets caught they don’t risk a second offense.
Unfortunately, he adds, “We keep getting new players.”
Post Your Comment Below