Attorney General Josh Shapiro said the theft violated the Pennsylvania Prevailing Wage Act and the federal Davis-Bacon Act.
Hawbaker received an estimated $1.7 billion in government contracts between 2003 and 2018, making it one of the largest contractors to complete projects on behalf of the Commonwealth. Shapiro said this is the largest prevailing wage criminal case in U.S. history.
“A month ago I met with some of the men and women who had their wages and retirements stolen by Hawbaker — and I told them that we will do everything we can to get them every cent they are owed under the law,” said Shapiro. “A few minutes ago, I was able to tell them that we made good on that promise.”
The Pennsylvania Prevailing Wage Act and the Davis-Bacon Act were enacted to protect workers by making sure all contractors working on state- or federally-funded projects pay the same wage rates, based on the determination of state and federal agencies. Contractors are permitted to satisfy a portion of the required wage by providing so-called fringe benefits, such as health care and retirement contributions to employees.
Hawbaker pleaded to four felony counts of stealing wages from its workers. According to the lawsuit, the company used money intended for prevailing wage workers’ retirement funds, health and welfare benefits to contribute to retirement accounts for all Hawbaker employees — including the owners and executives —and also subsidizing the cost of the self-funded health insurance plan that covers all employees.
The company disguised its scheme by artificially inflating its costs by millions of dollars each year and claiming credit for prohibited costs.
“I’ve heard directly from contractors that follow the law that this enforcement helps their business, and exposing these flagrant examples of wage theft and misclassification will deter employers from engaging in the same illegal schemes,” said Shapiro. “That’s why my office and our partners in law enforcement are committed to this work.”
YourErie.com received an official statement from Glenn O. Hawbaker, Inc. It reads:
“Hawbaker is pleased to bring this process to a conclusion and focus on the future. Our company’s decision to plead no contest avoids protracted litigation, which could have jeopardized the livelihoods of our dedicated employees. We continue to believe that we followed all requirements regarding fringe benefits. The fringe benefit practices challenged by the Office of Attorney General were based upon advice provided by the company’s former attorneys. Hawbaker has always intended to properly pay all of its employees. Through the years, both state and federal regulators extensively reviewed our Prevailing Wage Act and Davis Bacon Act practices on jobs and did not find any wrongdoing. This led us to believe we were properly following all laws, and we did not plead guilty. We fully cooperated in this process and proactively addressed concerns raised by the attorney general’s office. As stated by the attorney general, we are making past and present employees whole.This process will be conducted under the direction of an independent monitor. We now look forward to continuing to deliver outstanding service to our customers and providing opportunities for our dedicated team members.”Glenn O. Hawbaker, Inc.
Hawbaker was sentenced to five years’ probation and agreed to pay a total of $20,696,453 in restitution to 1,267 affected workers.
Shapiro said if any Pennsylvanians who want to report wage theft at their workplace can contact his office through email, at firstname.lastname@example.org.
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