When he took a construction job at the massive Port Covington development project rising on Baltimore’s Middle Branch waterfront, José thought it would be legitimate employment.
Instead, he and other workers found themselves being paid with company checks – which bounced in one case – rather than payroll checks with tax withholdings and deductions for retirement, workers comp, etc.
For several weeks earlier this year, José says he worked overtime at his metal stud exterior framing job, but did not receive time-and-a-half overtime – just his $840 weekly pay.
“It’s not correct, what they are doing. They are abusing the workers,” said José, who spoke through a translator and did not want to give his real name for fear of losing his job.
“I would like to get social security benefits when I get old. I would like to be paid correctly,” said the worker, who had told his story to a labor union, the Eastern Atlantic States Regional Council of Carpenters (EAS).
The union made José and other workers available to The Brew as part of their campaign to call attention to alleged wage theft, worker misclassification, and construction industry tax fraud faced by workers at Port Covington.
The union is focusing special criticism on Port Covington because the project, initiated by Under Armour founder Kevin Plank, was allocated more than $650 million in public tax increment (TIF) financing from Baltimore City.
“This was supposed to be a community investment, something that would benefit the whole community. The workers there should not be treated like this,” said EAS spokesman Frank Mahoney.
He pointed to the Community Benefits Agreement crafted to help sell the deal to a skeptical public in 2016.
“We’re asking the public to get involved and write letters about this, and we’re asking Mayor Brandon Scott to step in as well. There needs to be some enforcement,” Mahoney said yesterday as union supporters held up signs at the intersection of Hanover and Cromwell streets in South Baltimore.
“Tax fraud” and “Pay me my overtime,” the signs said.
Lamar Mutts, a council representative with the union, said he talks to a lot of workers like José who are unable to speak up because they are afraid and in many cases undocumented.
“You can see the pain in their eyes, they need these jobs, they have to put up with it,” Mutts said. “These companies are cutting corners. It’s an underground enterprise – a criminal enterprise.”
Subcontractor: “News to me”
After enduring a series of delays, Plank’s Port Covington project is now abuzz with construction activity.
Weller Development, the lead developer of the project, declined through a spokesman to comment on the union’s allegations.
But Jose’s account drew a surprised response from the owner of the Baltimore-based drywall company whose labor broker dealt with the worker.
“This is completely news to me,” said HDL Construction owner José Ruiz, who said his labor broker, AHG LLC, has been working for him for many years “and we never had any problems before.”
HDL is a subcontractor for CBG Building Company, formerly known as Clark Builders Group, which describes itself as the third-largest multi-family builder in the country.
Ruiz promised to look into the allegations, adding, “I’m sure we are complying with all the rules.”
On their Port Covington Why website, union leaders are also denouncing the developer for hiring “controversial Baltimore figure Kevin Johnson and his company, Commercial Interiors, to work on the project.”
When labor broker Sergio Blanco pleaded guilty last year to a “theft scheme” in connection with a construction project at Morgan State University, the union pointed out that Commercial Interiors was a subcontractor on the project and had been spotlighted in the past by labor groups for alleged wage theft.
Workers were forced to kick back $200 every week to keep their jobs, according to testimony at a court hearing in which Blanco was sentenced to six months in jail and led away in handcuffs.
Johnson’s company did not respond at the time to questions about its labor practices from The Brew.
Yesterday’s EAS event was held in conjunction with the national “Tax Fraud Days of Action” organized by the United Brotherhood of Carpenters and Joiners of America. Payroll fraud is a national problem, union leaders say, pointing to one study that estimates an $8.4 billion annual loss to federal, state and local governments when employers misclassify workers as independent contractors.
“These actions inflict substantial harm on workers, who fail to receive overtime pay and are denied their legal rights to earned unemployment insurance, workers compensation, Social Security and Medicare benefits,” according to the 2020 study by the Institute for Construction Economic Research.
Government needs to crack down on the employers engaging in these unethical practices, William Sproule the Executive Secretary/Treasurer of the Eastern Atlantic States Council of Carpenters argues.
“The lax enforcement of laws prohibiting employee misclassification provides tremendous financial incentive to these industry crooks,” Sproule said in a recent op-ed.
Dirty and Not Safe
José, who spoke with The Brew via Zoom, said the money he earns on his $21-an-hour job has to go a long way, helping to support his mother, daughter here in the Baltimore area, as well as other family members back in Honduras.
José came to the U.S. in 1998, and most recently worked in a southern state, where he said his employer paid workers properly.
By comparison, José said, when he began the job at Port Covington, he was not asked to fill out a job application, an I-9 Employment Eligibility form or a W-4 Employee’s Withholding Certificate.
After the recent bounced check, he was paid with an online payment app that he’s not sure came through.
The job site, he also said, is “dirty and not safe.” Through the translator, he recounted how workers have at times not been provided with safety glasses and proper helmets.
“I had to cut metal with a saw that was not the right kind,” he said. “It was really risky.”
Over his many years in construction, José said he has been burned by working an under-the-table job like the one he has now. In one case, he had filed his income taxes, but when his employer’s practices came to light, “I had to pay $2,600 to the IRS.”
All this makes him determined to avoid jobs like the Port Covington project:
“I have always tried to find a better place to work – one with pay stubs.”