The U.S. Department of Labor has determined subcontractors misclassified 227 workers’ employment and job statuses on the Northwest Light Rail Extension project in Phoenix and has recovered slightly more than $607K.
The Wage and Hour Division said the subcontractors incorrectly classified trades workers as general labors under the prevailing wage rule.
In January, the City of Phoenix passed its own prevailing wage ordinance to bring wages on City-funded projects in line with skilled union workers. The Goldwater Institute has filed a lawsuit challenging the local ordinance, saying it violates Arizona law on two points. The recently announced federal actions are separate from the local issue.
The subcontractors worked for Kiewit Infrastructure West Co., the prime contractor on the light rail segment. Wage and Hour claimed the following violations:
- Kimbrell Electric incorrectly classified electricians and paid them as pipelayers, common and general laborers and power-tool operators, which affected 107 employees and totaled $350.7K;
- Specialized Services Company misclassified 42 vacuum truck hose operators as power-tool operators totaling $23.8K;
- Badger Infrastructure Solutions misclassified 35 vacuum truck operators as common and general laborers totaling $76.7K;
- AJ Roberts Industrial misclassified ironworkers as power tool operators, affecting 23 people and amounting to $142.7K, and
- Roadway Electric LLC misclassified 20 electricians as common and general laborers and pipelayers totaling $13.5K.
Wage and Hour said contractors often classify specific trades personnel incorrectly, along with other violations, causing them to pay less than prevailing wages and benefits.
A DoL spokesperson said, as federal contractors, the prime and subcontractors have an obligation to comply with all the rules for federally funded projects.
The various employers have agreed to pay the back wages, and most of the employees have been notified. No monetary penalties were assessed to the companies, and the investigations are now closed. (Source)