Contractor must pay employees $650,000 in back wages plus interest, WA officials say
A transit system contractor must pay nearly $650,000 in unpaid wages and interest to 37 employees, Washington officials said.
Penhall Co., a concrete provider with an office in Tukwila, must also pay $150,000 in fines “for failure to pay prevailing wage[s]” to employees who worked on the Sound Transit East Link Extension and filing falsified payroll reports, according to a news release from the Department of Labor and Industries.
“Workers should be paid what they’ve earned, and in this case the company didn’t pay the correct wage for the work these employees were doing,” Jim Christensen, the department’s Prevailing Wage Program manager, said in the release.
Penhall did not immediately respond to a request for comment from McClatchy News, but the release notes that Penhall is appealing.
Sound Transit said in a statement that it is “dismayed” by the alleged violations.
“Our contractors are required by state and federal law to submit certified payroll and certify that the information they provide is accurate,” Rachelle Cunningham, a spokesperson for Sound Transit, told McClatchy News in an email. “We are dismayed that this contractor did not meet its obligation to its employees and to Sound Transit. We will work with all parties to ensure that workers on Sound Transit projects are paid the correct prevailing wage for the work they perform.”
The investigation began in 2019 after a Penhall employee filed a complaint with L&I, the release says. Investigators discovered the company had inappropriately classified workers for the jobs they were performing, resulting in wages lower than what they should have been paid.
“Penhall paid the workers $38.57 in hourly wages and benefits as laborers, when the workers should have received $58.69 an hour as surveyors,” the department says. “One worker is owed nearly $100,000 in wages and interest.”
The investigation covered the period from July 2017 to December 2019, according to the release. The department placed a lien on the project to ensure workers were getting paid, and while most contractors submit payroll records when requested, Penhall had to be subpoenaed to do so, the release says.
The records submitted to the department didn’t list any of the workers on the L&I audit, according to the violation notice.
According to that notice of violation the department issued on Feb. 11, sent to McClatchy via email by Matthew Erlich, a spokesperson for L&I, the company owes a total of $802,961.42, which breaks down to:
$501,758.70 in unpaid prevailing wages
$146,850.98 in interest for unpaid prevailing wages
$100,351.74 as a civil money penalty for failure to pay prevailing wages
$54,000 for the certified payroll records violation
A state law passed in 2019 requires prevailing wage violators to pay interest on unpaid wages and increased penalties for false reporting and wage violations, according to the release.
“The law strengthened enforcement as a way to discourage violations of the state’s Prevailing Wage Law,” Christensen said. “The easiest way for contractors to avoid these citations is to simply follow the law.”
This story was originally published March 25, 2021 at 5:15 PM with the headline "Contractor must pay employees $650,000 in back wages plus interest, WA officials say."