Ethics Watch: Report suspicions of trade contractors not paying proper wages

If a subcontractor craft worker told you – or if you learned – that he or she was not being paid proper wages, what would you do? Is that something you should be concerned about? Here is why this issue is getting more attention, and why you do need to care about it.

The situation

A subcontractor craft worker on one of our projects called our ethics hotline to report that his employer did not make that worker’s required pension contributions. These pension contributions were a component of the wages and benefits the subcontractor counted for compliance with state prevailing wage laws. This situation can affect Skanska because the prime or general contractor can be held responsible for payment of back wages if a subcontractor can’t pay its workers.

The U.S. Department of Labor’s Wage and Hour Division has increased its focus on ensuring that contractors are complying with wage and hour laws. As such, we are seeing an increase in the number of federal and state investigations on this topic, and we have directly received several complaints pertaining to wages from craft workers.

The outcome

Because of the call to our ethics hotline, we collected certified payroll reports and other documents to assist the Labor Department in its ongoing federal audit of the subcontractor.

What can we do to ensure craft workers are paid proper prevailing wages and benefits?

1. Collect certified payroll reports weekly from subcontractors of every tier working on your project.

2. Make sure the number of workers, hours worked and overtime is accurately reflected on the certified payroll.

3. Verify worker classifications are correct for the work each individual is performing.

4. Check that the wages and benefits paid meet or exceed the prevailing wages for that classification.

5. Consider field interviews which can confirm if workers are receiving the proper wages and benefits.

Final thoughts

We are in a better position when we discover a wage issue or if it is reported to us than if we find out through a government agency. We expect – and require – that workers on Skanska projects receive the wages to which they are entitled.

Even if your project is not subject to state or federal prevailing wage laws, all craft workers are covered by the federal Fair Labor Standards Act. The FLSA requires overtime pay at a rate not less than one and one-half times the regular rate of pay for each hour craft workers work beyond the standard 40-hour week. The regular rate of pay must meet the higher of the applicable federal and state minimum wages.

Keep in mind that sometimes workers are fearful of potential retaliation if they raise a question about wages. If you have reason to believe that workers are not being paid in accordance with laws, bring it to the attention of your manager, or an ethics and compliance officer. It is the right thing to do!

Have an ethics question? Either talk to your supervisor, human resources or legal representative, or an ethics and compliance officer. To report an ethics breach, contact one of those professionals, call Skanska’s confidential ethics hotline at 877-516-3385 or use the ethics hotline link on OneSkanska.

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One Response

  1. In the Carolinas some workers, generally tier subcontractor employees, are paid by the piece. It’s common practice for drywall installers to be paid by the board. It is a system rife with opportunity to short-change the worker on the amount of work performed and consideration for hours worked more than 40. But the worst part is the pressure to produce. In my experience, folks who work under this system calculate risk differently because their income, and their job, is dependant on contunuous production.
    “Injury Free” is not a part of this system.

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