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DLI seeks $2.4 million in back wages, damages from construction companies that worked on Viking Lakes project

$2M wage theft case against Minnesota construction companies just tip of iceberg, union says
$2M wage theft case against Minnesota construction companies just tip of iceberg, union says 02:29

MINNEAPOLIS — This is more than just a Grinch, and according to officials it's the largest wage and hours case ever investigated by state labor officials.

"The number of employees who were affected, the fact that it spanned over 19 different sites, and the fact that there was this amount of wages," Nicole Blissenbach, Commissioner of the Department of Labor and Industry, told WCCO. "Approximately $1.2M is money that should've been in people's pockets."

The DOLI is seeking $1.2 million in back wages and an additional $1.2 million in liquidated damages from Property Maintenance & Construction LLC and Property Maintenance and Construction Inc. (PMC) and Advantage Construction Inc. (Advantage). The companies are alleged to have withheld that pay from 25 workers building drywall in apartment complexes under construction across the metro.

According to court documents, many of the employees were paid in cash, or off the books, and were not given earning statements, which is required by state law.

"It's common in the construction industry to have different layers for the work that needs to be done," Blissenbach explained. "This case is us saying we're out there, we are investigating, we are using resources we have been allocated to ensure our laws are being followed."

MORE: 3 Minnesota housing developers accused of using contractors with bad labor practices

A joint WCCO and CBS News investigation dug into the data on reported wage thefts from state departments of labor, and found the total value of known cash withheld by employers is roughly $1.5 billion. Multiple labor officials, however, told CBS News the real number could be closer to $50 billion.

In Minnesota, specifically, data analyzed by CBS News from DOLI counted 745 claims of wage theft since 2010 with the total amount owed being $6,559,247.36.

The median amount for each case, moreover, was $886.50, the equivalent of about the average monthly mortgage payment in Minnesota, and also equivalent to about five weeks worth of groceries.

"I would describe it as just the tip of the iceberg," Richard Kolodziejski, Director of Government Affairs at North Cntral States Regional Council of Carpenters, explained to WCCO. "There are a lot of companies who are still operating with a wage theft business model out there."

WCCO reached out to PMC for comment.

Advantage Construction released the following statement on Wednesday:

"We strongly disagree with the Department's conclusion that Advantage Construction was the "joint employer" of certain employees that worked for one of its subcontractors, and we believe the Department's joint employer determination is legally and factually unfounded and incorrect.  Advantage Construction did not employ any of its subcontractor's employees and had no knowledge or have any involvement with its subcontractor's alleged violations of law.  Advantage Construction has objected to the Department's determination and will be vigorously defending itself in the contested case proceedings.  The company takes these matters very seriously and is committed to making sure that all of its actual employees are treated fairly and properly in all respects."

Viking Lakes in Eagan is among the 19 sites where the alleged wage theft took place. MV Ventures, the construction project manager at Viking Lakes, sent the following statement:

"On Tuesday, December 19th, we became aware of the Minnesota Department of Labor and Industry's (DOLI) Notice and Order for Hearing that includes the Viking Lakes Residences as one of 19 construction projects across Minneapolis-St. Paul in which Advantage Construction and Property Maintenance & Construction are accused of violating wage laws. As we have stated throughout this process, MV Ventures fully supported DOLI opening this investigation, and we are pleased DOLI's Order acknowledges MV Ventures' complete and prompt compliance with the investigation and document requests. While we understand the accused subcontractors are contesting DOLI's Order, the findings are disturbing in that they indicate a deliberate effort by these subcontractors to deceive both their employees and the multiple developers who led these Twin Cities projects. If the Office of Administrative Hearings upholds DOLI's findings, Advantage Construction not only intentionally violated the law but also breached its contract with MV Ventures and should be held fully accountable as outlined in DOLI's Order."

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