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HomeContractingDC AG resolves $731,000 wage-and-hour investigations against construction/property management companies

DC AG resolves $731,000 wage-and-hour investigations against construction/property management companies

DC Attorney General Karl A. Racine says that two companies, Manganaro Midatlantic LLC and Nomadic Real Estate Investments, will pay a total of $731,000 to resolve allegations that they violated District wage-and-hour laws and, in Nomadic’s case, unlawfully discriminated against prospective tenants through the use of criminal background checks.

“Every day, my office fights to make sure DC workers are paid the wages they are owed and are given the benefits they deserve,” Racine said in a Dec. 8 statement. “The District’s laws are in place to protect all residents and ensure everyone has access to essential human rights, such as housing. Just as we did today, my office will use every tool at our disposal to hold companies accountable and make sure that District residents, including returning citizens, are not denied fair housing opportunities.”

To date, the Office of the Attorney General (OAG) says it has secured more than $11 million for workers and the District through its workers’ rights enforcement actions.

The following material is from a news release issued by the AG’s office.

OAG’s Investigation of Manganaro

Manganaro is a construction company that specializes in drywall work and operates throughout the mid-Atlantic region, including the District. OAG’s investigation alleged that Manganaro and numerous subcontractors, in violation of the District’s Workplace Fraud Act (WFA), misclassified hundreds of construction workers as independent contractors when they should have been classified as employees. When workers are misclassified as independent contractors, they are denied rights that are entitled to employees, such as minimum wage, overtime, and paid sick leave.

As a result of OAG’s action, Manganaro must:

  • Pay $575,000 in total to the District and affected workers. This amount includes $345,000 in restitution, which will be paid out to affected workers, and $230,000 in civil penalties, which will be paid to the District. A claims process will be separately established to notify and distribute restitution to affected workers.
  • Implement improved compliance measures. Manganaro will implement compliance improvements, including requiring its subcontractors to submit certified payrolls to confirm compliance with the WFA, conduct randomized audits to ensure compliance, and submit annual reports to the District for the next four years regarding subcontractor compliance.

A copy of the settlement agreement is available here.

OAG’s Investigation of Nomadic

Nomadic provides property management and maintenance services in the District. OAG began investigating Nomadic in 2020, looking into allegations that it was engaging in improper employment practices including denying employees overtime pay and sick leave. The investigation was jointly conducted by members of the Workers’ Rights and Antifraud Section, Civil Rights Section, and Office of Consumer Protection.

After conducting a thorough investigation, OAG alleged Nomadic violated District employment, consumer protection, and civil rights laws by:

  • Improperly classifying some employees as exempt from minimum wage and overtime laws and failing to provide them with overtime wages they were owed, in violation of the District’s Minimum Wage Revision Act (MWRA).
  • Improperly conducting criminal background checks on applicants prior to making a conditional offer of housing, in violation of the District’s Fair Criminal Record Screening for Housing Act (FCRSHA) and the Consumer Protection Procedures Act (CPPA).
  • Facilitating source-of-income discrimination by property owners in violation of the D.C. Human Rights Act (DCHRA).
  • Failing to keep proper records of employee’s hours worked and to provide required notices, also in violation of the MWRA.

This case highlights limitations on how criminal background checks can be used during the housing application process, as the District’s Fair Criminal Record Screening for Housing Act (FCRSHA) mandates that such checks may only be conducted after conditional approval by the property owner and must be sufficiently limited in scope.

As a result of OAG’s action, Nomadic must:

  • Pay $131,061.18 to 78 employees denied overtime wages (which reflects more than the amount of overtime wages improperly withheld).
  • Pay $24,938.82 in civil penalties to the District.
  • Properly classify employees as exempt and non-exempt consistent with DC law and ensure that nonexempt employees receive earned overtime wages.
  • Maintain detailed records of hours worked by each employee, as required by DC law.
  • Only conduct criminal background checks after a housing applicant has received conditional approval by the property owner and ensure all background checks are limited in scope as required by DC law.
  • Conduct training for staff and update the employee handbook on the FCRSHA and the DC Human Rights Act requirements.

This injunctive relief will ensure Nomadic’s compliance with District antidiscrimination and employment laws going forward.

A copy of the settlement agreement is available here.

Mark Buckshon
Mark Buckshonhttps://washingtonconstructionnews.com
Mark Buckshon is the publisher and interim editor of Washington Construction News. He is also president of the Construction News and Report Group of Companies. He combines a journalism and business background, and has published construction trade publications for more than 30 years, after an earlier career in journalism, which culminated when he lived through the transition from Rhodesia to Zimbabwe in 1978-80 as a sub-editor for the Bulawayo Chronicle and a correspondent for a Canadian news service.

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