Organized Labor

By Mary Marzotto, Compliance Officer,
San Francisco Office of Labor Compliance

The San Francisco Office of Labor Standards Enforcement (OLSE) recently announced the successful conclusion of an investigation into labor law violations by building trades contractor, Avoca Trucking and Excavating. As a result twenty- two construction workers received back wages totaling $273,689, for underpayments on six public works projects for the City and County of San Francisco.

After an extensive 2-year investigation, OLSE had found that the contractor had routinely violated both state and local regulations covering the gamut of labor wages and hours laws. Violations included underpayment of wages, non-payment of overtime, misclassification of workers belonging to the Operating Engineers, and Plumbers & Pipefitters unions, non-payment of fringe benefits, underreporting of hours and the number of workers, and paying in cash both to avoid payroll taxes and to exclude workers from certified payroll reports. The contractor also failed to make apprenticeship contributions, provide meal breaks or to maintain workers compensation insurance.

Avoca Trucking and Excavating (ATE) is owned by Martha O’Neill Feely, who had previously managed Golden Pacific Construction. ATE is signatory to the Operating Engineers Local 3 and Laborers Local 261. In March of 2004, OLSE received a complaint from the wife of a Local 261 member claiming that ATE had not paid her husband’s health benefits to the Laborers Trust Fund. OLSE had also received reports of delinquent trust payments by ATE from both Laborers business agent, Ramon Hernandez and from Operating Engineers Business Agent, Ken Oku.

The Office of Labor Standards analyzed a number of documents, including payroll records, City Inspector reports, payroll check stubs, time cards, sign-in sheets and monthly reports submitted to the trust funds; and, found numerous discrepancies. On one project, the contractor submitted two sets of payroll records, with different names and numbers of employees. Monthly trust fund payments did not match the number of hours reported on the payroll report. City inspectors consistently reported seeing many more workers on the jobsite, sometimes as many as eight additional workers, in excess of those listed by the contractor on his payroll records.

ATE tried to derail the investigation by providing partial records and altered documents. Later the contractor refused to turn over any of the requested documents, resulting in the assessment of additional penalties for non-submission of $228,000.

The first break in the case came when the OLSE was able to locate a former foreman with the contractor, thanks to the help of the Operating Engineers union. The foreman was able to identify and help track down a number of missing workers, some of whom were known only by their nicknames, such as ‘Shakey’, ‘Fast Eddy’ and ‘Palomo’. The OLSE obtained evidence through interviews with 16 workers in all, many of who spoke only in Spanish.

Some workers provided calendars of the days and hours worked. One worker kept track of the time he spent traveling to the yard each day to pick up and return tools and equipment. He was not paid for those hours. Almost all workers reported that they were unable to take a lunch break. (The California labor code provides that, “no employer shall employ any person for a work period of more than five hours without a meal period of not less than 30 minutes.) One worker’s calendar was marked with the notation, N.L. on more than 60 days when no lunch period was provided. Traffic flaggers could not stop for lunch unless another worker relieved them. One flagger reported that, “When I asked to be relieved to take a (lunch) break I was yelled at.”

Many workers reported receiving cash pay, blank check stubs and checks that regularly bounced. They reported being shorted on their hours wages or fringes. One worker routinely called the contractor to report the shortages but was rarely paid.

Many of the workers were Hispanic or Irish immigrants and at first were reluctant to provide information or sign statements for the OLSE for fear of losing their jobs or of other forms of retaliation by the employers.

In addition to the back wages, the OLSE also collected $124,000 in penalties and $9,167 in apprenticeship training funds. The Laborers and Operating Engineers Trust Funds collected an additional $51,000 in unpaid benefits through joint checks paid by the prime contractors.

This case demonstrates how cooperative efforts between government regulatory agencies; unions and workers can benefit everyone in the construction industry. Enforcement of labor law guarantees that workers will get the wages and benefits they deserve and also provides a level playing field for contractors when bidding on public works projects