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June 5, 2020 | NORTHWEST LABOR PRESS
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...Wage theft
From Page 1
stucco, and install weather-proof-
ing foam around doors and win-
dows. The work took place at a
six-story 110-unit luxury apart-
ment building, 35 Club Apart-
ments, named for its address at 35
Club Road in Eugene.
In November, an ODP em-
ployee on the project reached out
directly to Local 82. To commu-
nicate with the Spanish-speaking
worker, Business Manager Kent
Sickles called in José Avalos, an
organizer for sister union Cement
Masons Local 555. Avalos inter-
viewed two ODP workers and
shared what he learned with
Mario Silva, a Seattle-based spe-
cialist employed by OPCMIA to
investigate cases of wage theft
throughout the Pacific Northwest.
Silva says pay stubs provided by
the two workers were all he
needed to show that ODP was vi-
olating federal law.
Since 1931, a federal law
known as Davis-Bacon has re-
quired contractors to pay the local
prevailing wage on federally
funded construction projects. The
law is meant to prevent the gov-
ernment’s purchasing power
from driving down local wage
rates. The idea is that the public
interest is best served by having
the work done right, with contrac-
tors who compete based on qual-
ity and efficiency, not on who can
get away with paying workers the
lowest. The Labor Department
determines annually what the pre-
vailing wage is in each area for
each construction craft specialty.
Workers on the 35 Club Apart-
ments project were entitled to be
paid the prevailing wage because
the U.S. Department of Housing
and Urban Development (HUD)
had guaranteed a 40-year $26.5
million loan on the project. ODP
employees, as plasterers, were
supposed to be paid $32.22 an
hour plus $16.58 an hour in fringe
benefits. Because ODP doesn’t
provide workers fringe benefits,
it was supposed to pay workers
the combined $48.80 an hour.
But the ODP employees Ava-
los talked with never saw wages
that high. One was being paid
$25.99 and another $34.45, their
pay stubs showed. And that was
actually a big pay bump for them:
On previous projects, ODP had
paid $15 an hour. And that wasn’t
all, according interviews the
union conducted with workers.
The workers were not paid over-
time they were supposed to be
paid, and had to pay their em-
ployer in cash for hotel rooms
where they slept five to a room.
They also told Avalos they were
given just one 30-minute break
per 10-hour day.
Avalos helped the workers fill
out and sign official complaint
forms in English, and Silva
turned the evidence over to an in-
vestigator at the Wage and Hour
Division office in San Francisco.
HUD and the Wage and Hour
Division of the U.S. Department
of Labor investigated and found
that ODP had misclassified its
workers, paying them at the rate
for laborers instead of the rate for
plasterers. Investigators also de-
termined that the cash payments
for the hotel violated a federal law
called the Copeland Act, which
bars employers from taking kick-
backs from workers on federally-
funded projects. There was more.
When the plasterers worked more
than 40 hours a week, they
weren’t paid time and a half as
federal law requires. And Port-
land area workers weren’t paid
for the extra two hours of drive
time it took to get to Eugene.
Of the nine workers, five co-
operated and received checks
ranging from $3,708 to $33,244.
Reached by phone, ODP
owner Oscar Palacios agreed he
had paid some workers at the la-
borers rate, but said that’s because
they did some laborer worker and
weren’t qualified to do stucco
work unsupervised. Palacios did-
n’t document what they were do-
ing every hour on the job, he said.
“I could have hired an attorney,
and paid maybe 15 or 20 grand
more and fought it, but I don’t
have time to fight,” Palacio told
the Labor Press. “I made good
money on the project.”
Sickles, the Local 82 business
manager, said he hoped to find
good union jobs for the workers,
but only one of the five could
pass E-verify, the voluntary gov-
ernment program that verifies
that employees have the legal
right to work in the United States.
Members of the union-signatory
contractors association Associ-
ated Wall & Ceiling Contractors
of Oregon and S.W. Washington
use E-Verify, and it’s required for
contractors on federal construc-
tion projects.
“All my employers follow the
rules,” Sickles said. “That’s the
reason this upsets me.”
Wage theft doesn’t just harm
workers, it also cheats the state of
tax revenue and workers’ comp
contributions, and it’s unfair to
competitors who play by the
rules, says Victor Roach, presi-
dent of Western Partitions Inc.,
the family-owned and proudly
union company that was under-
bid by ODP Systems.
“When contractors get away
with cheating, it’s kind of a race
to the bottom,” Roach said. “If
that happened everywhere, it
would put us out of business.”