$596,000 in Stolen Construction Worker Wages, and the Bigger Case That Nobody Filed
The U.S. Department of Labor just recovered $596,443 for 31 workers on two affordable housing developments in Washington, D.C.
The scheme was rudimentary, and openly known to the employees. J. Solano HVAC LLC and its owner promised sheet metal workers and pipefitters the full prevailing wage by check, then required them to hand back everything above $30 an hour. The company also misclassified skilled tradesmen as lower-skilled laborers, shorting them on base rates, holiday pay, and fringe benefits.
THE STANDARDS. The Davis-Bacon and Related Acts (40 U.S.C. §§ 3141–3148) require contractors on federally funded or assisted construction to pay locally prevailing wages and fringes, and to classify workers by the work actually performed. The Copeland "Anti-Kickback" Act (40 U.S.C. § 3145; 18 U.S.C. § 874) makes it a crime (up to five years) to induce a worker to give back any part of that compensation "by any manner whatsoever." A verbal deal to return wages qualifies. Its regulations also require weekly certified payrolls, signed under penalty of perjury.
THE PENTALTY. Back wages and fringe benefits, plus three-year debarment of the company and its owner from federal contracts for willful violations.
WHAT WAS LEFT ON THE TABLE. This was a Wage & Hour Division investigation. But where federal dollars support a project, every certified payroll is a sworn statement made to get those dollars paid. That is the classic predicate for a False Claims Act case. With the right relator ("whistle blower") 31 U.S.C. § 3729 offers treble damages, per-claim civil penalties, and a whistleblower share of 15–30%. A very different number than back wages.
Colorado has its own version: the Colorado False Claims Act, C.R.S. § 24-31-1201 et seq., which reaches contractors who defraud the State on State-funded projects.
Construction defects are the wrong most people associate with bad contractors. They are not the only one: and payroll clerks, foremen, and competing bidders often see the rest first.
