In coordination with National Apprenticeship Week, Local 139 hosted the Fall Externship Days on November 13-15th at the newly expanded Coloma Training Center. Over the three days, over 1200 students, educators, and parents from more than one hundred school districts, as far away as Ashland and Racine, learned about what it takes to become an Operating Engineer. 

Governor Evers, DWD Deputy Secretary Pam McGillivray, and Bureau of Apprenticeship Director David Polk were among the special guests that visited the Coloma event as the State of Wisconsin celebrated its’ own apprenticeship milestone of 16,384 enrolled apprentices. There are currently 1,243 Local 139 apprentices, making it one of the largest construction trade apprenticeship programs in the state. 

Thank you to the members that helped make this day a success and the companies that participated in the contractor panel:

• J.P. Cullen & Sons, Inc.

• Integrity Grading & Excavating, Inc.

• Lepke Trucking & Excavating

• Mathy Construction Company

• Michels Corporation

• Walbec Group, Inc. 

Here is what one CTE Instructor had to say about this valuable hands-on exploration event:

“Nearly all of our students had the opportunity to operate at least one. We had several students that were very excited after we left and are considering future career paths presented on Wednesday.” 

Students also had the opportunity to learn about the Certified Pre-Apprenticeship program for high school students, through Destinations Career Academy (DCA). Forty percent of the DCA part-time enrolled students are taking the Operating Engineers pre-apprenticeship coursework. 

To learn more about any of these workforce initiatives, please contact Laura Cataldo at laura.cataldo@bakertilly.com 

Press Release

United States Attorney’s Office Middle District of Florida

November 3, 2023

Link: https://www.justice.gov/usao-mdfl/pr/honduran-nationals-sentenced-multi-million-dollar-wire-and-tax-fraud-scheme

The following are excerpts from the press release. Emphasis is added.

Jacksonville, Florida – Chief United States District Court Judge Timothy J. Corrigan has sentenced Omar Wilkin Santos-Calix and Oscar Rene Santos-Santos, both Honduran nationals and both illegally present in United States, to 24 months in federal prison for conspiracy to commit wire fraud and conspiracy to commit tax fraud. The court also ordered Santos-Calix to pay restitution to the IRS in the amount of $3,245,161 and entered a money judgment against Santos-Calix in the amount of $897,870, representing the proceeds of the wire fraud. The court ordered Santos-Santos to pay restitution to the IRS in the amount of $1,773,429 and entered a money judgement against Santos-Santos in the amount of $490,634, representing the proceeds of the wire fraud.

According to court documents, Santos-Calix and Santos-Santos established a shell company that purported to be involved in the construction industry. They obtained a workers’ compensation insurance policy in the name of the shell company to cover a minimal payroll for a few purported employees, then “rented” the workers’ compensation insurance to work crews who had obtained subcontracts with construction contractors on projects in various Florida counties as well as contractors in other states.

As part of the scheme, the contractors issued payroll checks for the workers’ wages to the shell companies and Santos-Calix and Santos-Santos cashed these checks, then distributed the cash to the work crews after deducting their fee, which was typically about 6% of the payroll. During the scheme, both defendants cashed payroll checks totaling approximately $19 million, with their fees totaling over $1 million. Neither the shell company nor the contractors reported to government authorities the wages that were paid to the workers, nor did they pay either the employees’ or the employer’s portion of payroll taxes – including Social Security, Medicare, and federal income tax. According to the IRS, the amount of payroll taxes due on wages collected by Santos-Calix and Santos-Santos totaled $5,018,590.

The scheme also facilitated the avoidance of the higher cost of obtaining adequate workers’ compensation insurance for the numerous workers on the work crews to whom Santos-Calix and Santos-Santos “rented” the workers’ compensation insurance. The two policies that the defendants purchased and then “rented” out was for an estimated payroll of $175,000, and the insurance company issued policies for a premium of approximately $21,000. Had a workers’ compensation insurance policy been purchased for the actual payroll totaling approximately $19,000,000, the policy premium would have totaled about $2.5 million.

“Through their actions, these defendants attempted to create an environment that favored cheaters,” said IRS-CI Acting Special Agent in Charge Tara K. Reed. IRS-CI prioritizes cases involving individuals who seek to hurt tax-compliant individuals and businesses. Through our partnership with HSI and the United States Attorney’s Office, we will continue to identify bad actors and work together to vigorously investigate and prosecute these payroll tax and worker’s compensation insurance schemes.” 

With DOL Independent Contractor rule imminent, report is the first ever state-by-state breakdown of how many workers are being shortchanged by their employers 

NEW POLLING: Americans of all backgrounds are concerned about misclassification

Washington, D.C.—The Century Foundation (TCF) today released a first-of-its-kind report on how many construction workers are being misclassified or paid off the books, costing taxpayers and workers billions of dollars in lost revenue, wages, and benefits. The TCF study estimates that nationwide, between 1.1 and 2.1 million construction workers were misclassified or paid off the books in 2021 This represents between 10 percent and 19 percent of the construction industry’s workforce.

The study comes just weeks before the U.S. Department of Labor is expected to release its final rule that will realign the definitions of employee and independent contractor back into compliance with decades of Supreme Court and federal court decisions, effectively reversing a Trump-era change. Employers have a legal obligation to provide various benefits and protections to their employees and pay certain taxes on their behalf. But when employers misclassify workers as independent contractors, they can significantly cut their labor costs because they avoid those obligations. Workers misclassified as independent contractors are generally not protected by laws against sex, race, and age discrimination or sexual harassment.

“The construction industry is awash in worker misclassification, a practice that hurts workers, honest employers, and local governments alike,” said TCF Fellow and co-author of the report Laura Valle-Gutierrez. “Misclassification denies construction workers their legal rights and shortchanges these workers by $12 billion a year in lost wages and benefits nationwide. Misclassification also puts law-abiding employers at a significant cost disadvantage and amounts to tax fraud by corporations that skirt the law.”

The report finds that employers that misclassify workers cheat their workers by more than $12 billion a year from a combination of underpaying them on wages and shortchanging them on contributions for legally required benefits. Moreover, misclassification costs the nation’s taxpayers between $5 and $10 billion per year. The TCF study reveals that rates of misclassification in the construction industry are highest in Vermont, followed by Washington, D.C., Connecticut, Mississippi, Arkansas, and Georgia. In the report, TCF researchers emphasize that their estimates “possibly—if not likely—undercount the extent of worker misclassification in the construction industry.”

“I have felt firsthand how misclassification has hurt the working class,” said Jair Rodriguez, a member of the United Brotherhood of Carpenters (UBC) from Central Islip, New York. “Cheating contractors being able to pay less than the area standards and paying cash have been hurting me and my family, by me having to pay higher taxes and taking away good union jobs from those who are highly skilled, work safely and efficiently, and pay their taxes.”

A new survey of 2,200+ adults done by TCF and Morning Consult found that three in five Americans — including 75% of independent contractors — think that contractors are undercompensated when considering the full range of benefits offered to employees. A plurality of adults express deep concern that employers that misclassify workers avoid paying their fair share of taxes; skirt requirements to provide legal protections to employees; and benefit from an unfair cost advantage over honest, law-abiding employers. Lastly, more than two-thirds of Democrats (69 percent) and a majority of Republicans (56 percent) say they would be more likely to vote for a candidate with a plan to address worker misclassification. 

“Misclassification is an intentional decision by employers to deprive workers of fair wages, benefits, and protections. No industry is immune from corruption, abuse, and illegal labor practices,” said Connecticut Attorney General William Tong. “This important report underscores what we hear from workers every day—misclassification, wage theft, and worker exploitation is a serious problem in the construction industry here in Connecticut and across the nation. It is one of the reasons we expanded our Connecticut False Claims Act earlier this year, and why I have joined with attorneys general across the country calling for strong, unambiguous federal labor laws and robust enforcement.”

The Century Foundation (TCF) is a progressive, independent think tank that conducts research, develops solutions, and drives policy change to make people’s lives better. We pursue economic, racial, gender, and disability equity in education, health care, and work, and promote U.S. foreign policy that fosters international cooperation, peace, and security. TCF is based in New York, with an office in Washington, D.C. Follow the organization on Twitter at @TCFdotorg and learn more at www.tcf.org.

A record 16,384 apprentices to participate in state program to ‘earn while they learn’

MADISON — Gov. Tony Evers today, together with the Wisconsin Department of Workforce Development (DWD), celebrated “National Apprenticeship Week” by announcing that Wisconsin’s Registered Apprenticeship Program has reached a record 16,384 enrolled apprentices, an all-time record in the program’s 112-year history and surpassing last year’s record-high participation. Gov. Evers announced the new record during the Apprenticeship Career Day and Fair held by WRTP | BIG STEP of South Central Wisconsin and the Building Trades Council of South Central Wisconsin at the Plumbers Union Local 75 Training Center in Madison. The governor’s “National Apprenticeship Week” proclamation is available here.

“For over a century, Wisconsin has been a national leader in apprenticeship, which will continue to play a critical role in addressing our state’s generational workforce challenges and building a 21st-century workforce for a 21st-century economy,” said Gov. Evers. “Today, apprenticeships are more popular than ever for workers seeking a pathway into high-demand, family-supporting careers and employers seeking highly skilled talent. It’s exceedingly important that we invest in apprenticeships and getting folks the skills and training they need to participate in our workforce while continuing to be a model of innovation and flexibility to meet evolving workforce needs.”

Wisconsin Apprenticeship pairs structured, on-the-job training with classroom instruction, allowing apprentices to be paid to “earn as they learn.” Wisconsin was the first in the nation with a registered apprenticeship program and is unique among the 50 states in requiring employers to pay their apprentices for both time worked and time spent in required classroom instruction. This recognizes the importance of a dual training system that combines skills obtained on the job site with technical knowledge in the classroom. 

Thompson has served as AASHTO vice president since January.

Thompson’s three goals for his AASHTO presidency include helping communities realize the full promise of the Infrastructure Investment and Jobs Act, improve safety and reduce traffic deaths, and find new ways to attract and retain talented workers.

AASHTO represents the interests of the Departments of Transportation in all 50 states, Washington, D.C., and Puerto Rico.