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9 Sep 2023

Steven Greenhouse, The Guardian

USA: Worker advocates call for building developers to join ‘Building Dignity’ & ensure contractors comply with code of conduct to stop abuses against construction workers

See all tags Allegations

"Building Dignity: can a code of conduct stop abuse of US construction workers?", 9 September 2023


Inside a second-floor dorm room-to-be, Gonzalez said he typically worked 10-hour days, six days a week doing drywall, and was paid $220 a day, often in cash. “There’s no overtime pay, no benefits,” Gonzalez said, noting he sometimes worked 13-hour days.

Two co-workers...aw six teenagers – they guessed 13, 14 or 15 years old – scurrying out of a van and into the building to do clean-up work.

Upset by such scenes, worker advocates – from Minnesota’s attorney general to immigrant worker centers – have voiced alarm that many Twin Cities construction workers are toiling under hugely exploitative conditions.

Sometimes labor contractors disappear without paying workers the two weeks’ pay owed them.

...many workers are misclassified as independent contractors, not as employees, and their employers cheat them and the government by not paying overtime or social security, workers’ compensation and unemployment insurance taxes.

...several labor unions and a prominent workers center, the Centro de Trabajadores Unidos en la Lucha (CTUL)...founded the Building Dignity and Respect Standards Council, a group they want Minneapolis-area building developers to join.

By joining, developers would pledge to ensure that their contractors and subcontractors comply with a code of conduct that calls for a $20 minimum wage, paying time-and-a-half for overtime, paying workers’ comp and unemployment insurance taxes, not misclassifying workers and never threatening workers or using child labor...

One study found that over 30,000 Minnesota construction workers (23% of the total workforce) are misclassified as independent contractors and paid off the books. The study said misclassified construction workers earn $29,700 less a year (36% less) in wages and benefits than they should. Moreover, the study found that Minnesota loses $136m annually in tax revenues due to construction payroll fraud, including $65m in income taxes and $58m in workers’ compensation premiums...

By misclassifying workers, employers can cut costs per worker by 30% by not paying overtime or social security and Medicare taxes or unemployment insurance and workers’ comp premiums.

Union officials say that in the Twin Cities, non-union contractors do half the multi-family residential construction and often pay less than half what unionized contractors pay. Most non-union contractors used to be law-abiding, union officials say, but now most systematically break wage-and-hour laws...

In 2018... Ricardo Batres was accused of not paying overtime even though he sometimes forced people to work 70-hour weeks and was accused of forcing workers to live in overcrowded housing with no hot water. The indictment also accused him of threatening to deport and even kill workers if they complained to public authorities. When a worker severely hurt his back, Batres ordered him to tell hospital officials he wasn’t injured on the job. Batres ultimately pleaded guilty to labor trafficking and was sentenced to 270 days in prison.

CTUL talked with immigrant workers to help gather evidence against Batres. That frightful case spurred CTUL, the carpenters and two other unions to create the Building Dignity council in 2020...In June 2022, CTUL sponsored a protest march by construction workers and their allies that sought to pressure three developers – Solhem, Yellow Tree and United Properties – to join Building Dignity, with CTUL asserting those developers had used law-breaking labor brokers. So far, no developers have joined...

Yellow Tree and Solhem did not respond to the Guardian.

CTUL is planning another protest march on 12 September to again press Yellow Tree, Solhem and United Properties to join...

Asked why it has declined to join Building Dignity, United Properties told the Guardian that it “is firmly committed to adhering to the highest ethical standards with integrity, honesty and good faith in all areas”. It added, “We expect our [contractors] to uphold these same principles.”

Solhem has proposed building up to 600 apartments at a former lumber yard in Northeast Minneapolis, but some neighborhood groups have vowed to block the project unless Solhem joins Building Dignity. Elliott Payne, the city councilman who represents that area, said Solhem’s owner told him that unions were trying to bully him, that he ran a clean, safe operation and that he would not open his books up to a third party he did not trust.

But Payne cautioned Solhem, saying: “I can’t support a project where workers face abuses. I’m hearing stories of workers getting injured on job sites and sexual harassment and assault.”

Ellison, Minnesota’s attorney general, said: “Ultimately if you don’t have something like the Building Dignity Council, you end up with a race to the bottom. We need to keep good contractors, and if you make them compete with people who are cutting corners and doing the wrong thing, they will feel pressure to do the same thing. This makes it extremely difficult for everyone, especially for fair, law-abiding contractors.”