AK Electric, Inc. has paid $61,000 in restitution and penalties to six workers who were underpaid for their work on the the University of Massachusetts campus. An investigation by the Attorney General’s office found that the company had been violating Massachusetts prevailing wage law.
“Companies can’t cheat their workers and not pay wages to gain an unfair advantage over their competitors,” Massachusetts Attorney General Maura Healey said in a press release earlier this month. “The enforcement of these laws is essential to making sure workers are receiving their hard-earned wages and that businesses are operating on a level playing field.”
Because UMass’ construction projects are public and fall under Massachusetts Prevailing Wage Law, contractors and subcontractors must pay their employees a special minimum wage, determined by how they are classified as workers, according to the release.
The investigation showed that the company improperly classified workers as apprentices who were not registered with the Massachusetts Department of Labor & Workforce Development, Division of Apprentice Standards. Due to their unregistered status, the workers should have been paid a higher prevailing wage rate, according to the release.
“These kinds of cases are very common,” said Fiore Grassetti, president of the Pioneer Valley Central Labor Council. “If one worker’s getting cheated, you know the rest are. When these kinds of cases do come up, the workers always win them.”
Grassetti said the main roadblock to addressing misclassification is workers’ concerns about employment.
“They don’t want to speak up in case their jobs are threatened, so they take the lower pay,” Grassetti said.
There is very little enforcement for classification according to Grassetti. The contractors and subcontractors receive limited oversight from UMass and the University of Massachusetts Building Authority, he said.
Once UMBA selects a General Contractor for a specific construction project, they are free to hire any subcontractor that they choose, although they generally select those they already have business relationships with, Grassetti said.
These estimates for contracting jobs are kept low by contractors via the expectation of utilizing underpaid labor such as this case.
“It’s the botton-bottom liners that get hurt,” Grasetti said. “I don’t think it’s right. I believe the owner really needs to tell the contractor what he wants on the job. A lot of times it means the work done isn’t as good, either, because the contractors are pushing to keep costs down so much.”
AK Electric, Inc. is a Palmer-based company owned by Anibal C. Alves, of Ludlow, according to the release.
In the past month, the fair labor division has handled four similar cases. These settlements include triple damages, or three times the amount of money that an employee should have received, Grasetti said.
Investigation in this case began in July 2015 upon a referral from the Foundation for Fair Contracting of Massachusetts. Assistant Attorney General Barbara Dillon DeSouza and inspector Joseph Drzyzga handled the situation.
The Attorney General’s office has a dedicated Fair Labor Division which is responsible for enforcing the Prevailing Wage Law, as well as minimum wage and overtime laws, according to the release.
Lia Gips can be reached at [email protected].
