HomeMy WebLinkAbout07- Prevailing Wage Claim involving Dept. of Labor and Industry and Jacob Forsythe
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DEPARTMENT OF LABOR & INDUSTRY
EMPLOYMENT RELATIONS DIVISION
WAGE & HOUR UNIT
PO BOX 6518
HELENA MT 59601
STATE OF MONTANA
BEFORE THE COMMISSIONER OF LABOR AND INDUSTRY
WAGE AND HOUR UNIT
IN THE MATTER CONCERNING THE } Case No.: 333-2008
PREVAILING WAGE CLAIM INVOLVING THE }
DEPARTMENT OF LABOR AND INDUSTRY AND}
JACOB L. FORSYTHE: } DETERMINATION
}
Petitioner, }
and }
}
CONCRETE CONSTRUCTION }
}
Respondent }
}
I. SUMMARY OF CLAIM
On August 23, 2007, Jacob L. Forsythe (hereinafter "claimant") filed a claim with the Wage and
Hour Unit of the Montana Department of Labor and Industry. The claim was filed pursuant to 39-3-201 et
seq., MCA. The claimant alleged to be owed $1,302.00 for work performed during the period July 1, 2007
to August 3,2007. Evidence, including the sworn statement of the claimant has been submitted in
support of the claim.
Also, on August 23,2007, a request was sent to Concrete Construction (hereinafter "employer")
asking for a response to the validity of the claim. The letter stated that if the employer disagreed with the
claim, to include a copy of time cards for July 1, 2007 to August 3, 2007 as well as a copy of his [the
claimant's] payroll ledger showing the gross amount earned, withholdings and net pay received. The
employer was instructed to submit a written reply postmarked by September 4,2007.
On August 30,2007, since the claim involved construction work on a prevailing wage project,
specifically the Milwaukee Road Rail Trail Project in Bozeman, Montana, the claim was transferred to the
compliance specialist.
On September 6,2007, Mr. Scott Parsons (owner of Concrete Construction) contacted the
Department by phone and stated he had not received the claimant's calculation note, which accompanied
the wage claim form. Also on September 6,2007, the compliance specialist faxed the note to the
employer and granted an extension until September 12, 2007 for the employer to respond.
On September 13, 2007, the employer responded to the wage claim in writing postmarked
September 12, 2007.
DETERMINATION -1
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Also on September 13, 2007, the employer's response was sent to the claimant with instruction to
respond by September 24,2007.
On September 18, 2007, the claimant responded to the employer's response.
On September 21, 2007, the compliance specialist asked for clarification and sent the claimant
certified payroll records submitted by the project's general contractor, time cards submitted by the
employer and hours worked submitted by the claimant. The claimant was instructed to respond by
October 1,2007.
On September 24,2007, the claimant responded to the compliance specialist request for
clarification.
On September 27,2007, the compliance specialist sent the employer the claimant's response to
the employer's response to the wage claim and the claimant's response to the compliance specialist's
request for clarification. The employer was also informed of penalties applicable to underpayment of
wages associated with a prevailing wage project. The employer was instructed to "provide any additional
information or comments" by October 9, 2007.
On October 15, 2007, the employer had not responded.
The findings of fact and conclusions of law, which follow, are based upon an analysis of the
record as a whole, including all documentary evidence received, and all pertinent regulations.
II. FINDINGS AND DETERMINATION
The Department of Labor and Industry, State of Montana has jurisdiction in the matter of this
wage claim.
The City of Bozeman is a "public contracting agency" as defined in the Administrative Rules of
Montana, Section 24.17.103(17). The Milwaukee Road Rail Trail project is a "public works contract" as
defined in Section 18-2-401 (11), MCA and is subject to the "standard prevailing rate of wages" as defined
in Section 18-2.401 (13), MCA.
The Milwaukee Road Rail Trail project is subject to the "Montana Prevailing Wage Rates Heavy
Construction 2005" effective March 10, 2006. According to the published rates, the basic hourly rate plus
fringe benefit for a worker performing tasks associated with the classification of Laborer Group 2 is
$22.84 ($17.34 basic hourly rate + $5.50 fringe benefit = $22.84).
The claimant contends in his wage claim that he worked for the employer a total of 101 hours on
the above referenced project and that he received $920.00. The claimant's calculation note attached to
the wage claim states, in part:
"He... handed me cash. The total amount should have been approximately $2,222.00. He
submitted payroll so I don't kn~w what taxes have been paid, but I have received $920.00 which
was paid in two separate times...."
The claimant arrived at the total amount claimed in the wage claim, $1,302.00, apparently by
subtracting $920.00 paid from the total amount considered due $2,222.00 ($2,222.00 ~ $920.00 =
$1,302.00)
DETERMINATION - 2
1 The employer in response to the claimant's contentions stated, in part:
2
3 "We were lucky enough to get the bid at our beautiful new Public Library, a good contract with 2
4 busy months ahead of us. I needed him there.. .Jake no longer works with me. I have enclosed
5 his last two time cards as I received them from him. One I have paid him the other I have not as
6 it is still less than the money I have advanced to him. I have no way to prove that I have
7 advanced him money, but I know that if you ask him about it, he will probably tell you the truth. "
8
9 The employer attached copies of two unsigned, undated time cards, one (with the name "Jake"
10 written at the top) showing a total of 29.5 hours divided between 17 hours, apparently worked on a project
11 for Yung Construction, and 12.5 hours, apparently designated as having been worked at the "Library." A
12 notation is made under the time card on the copied sheet stating "Paid." The only date appearing on this
13 time card is included in the last entry where it indicates "Sat 7-7-07." (Presumably, other days and hours
14 recorded on this time card were worked prior to Saturday July 7,2007 and the time the claimant
15 remembers being paid in his response to the request for clarification discussed below.)
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17 The other time card without a name at the top apparently indicates 31.5 hours worked only on the
18 Library project. (The Library project is synonymous with the Milwaukee Road Rail Trail project.) A
19 notation is made under this time card on the copied sheet stating "unpaid."
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21 In the claimant's response to the employer's information, the claimant stated, in part:
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23 ". . .I was paid for both time cards he [the employer] submitted to you. I was given $420.00 in cash
24 for the week that I worked at the Library and Yungs. I thought that was right, because it was two
25 different pay scales. The one that he said is unpaid, that week he said my pay was $517.00. He
26 kept the $17.00, because he bought me lunch a couple oftimes...back to the advances, once we
27 had like 9 hrs in one week and he said no matter what our hours we would receive $300.00 a
28 week.. .[there was] no talk about paying him back...if you do the math we ended up close to
29 even...which I was over paid by $225.00.../ don't care, you can deduct that from my
30 claim.. .here 's the dirty piece of paper that I wrote my hours on. I received no payroll checks he
31 paid in cash so I have no stubs.. .. "
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33 The claimant's attached "dirty piece of paper" indicates he performed work on the above
34 referenced project July 20, 23, 24, 25, 26 and August 1, 2007 at 8.5 hours, 4 hours, 9.5 hours, 9 hours,
35 7.5 hours and 4 hours, respectively for a total of 42.5 hours of unpaid hours.
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37 In addition to the information submitted by the claimant and the employer, the project's general
38 contractor (DLM Contracting, Inc. of Bozeman, Montana) submitted certified payroll records that the
39 employer presumably had been required to submit to DLM. The claimant's name and payroll information
40 is listed on the records, along with several other employees.
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42 The compliance specialist asked the claimant to clarify the payroll information provided by each
43 party. The claimant responded, in part:
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45 ".. .the time card he said he paid he must have. I remember getting some cash at the beginning
46 of the month, because weill don't remember being broke. The two times I was paid were strictly
47 for the Library. Looking at the certified payroll it didn't add up, because there's a missing time
48 card. But, then I looked at myoId notes, and it came together. Between the fih and 1 th, I
49 worked 28 hrs, which is the time shown in the certified payroll. Regardless of the dates, I was
50 paid $420.00 on the 1th. He started paying us on Thursdays. Between the 13th and 19th, I
DETERMINATION - 3
1 worked 31.5 hrs as shown on the time card for which I was paid $500.00 on the 19th. But, he did
2 alter the time card. I was left there to paint rebar and that's his handwriting for Thursday. As far
3 as I remember, I had 32 hrs. I didn't miss work until getting paid became an issue. Since I have
4 the math in front of me of what was supposedly paid and the actual amount per hr I was suppose
5 to be paid I have the math done to the exact amount of what I was suppose to get and what I did
6 get."
7
8 The claimant stated that for the certified payroll period identified as ending 7/20/2007 in which he
9 worked 28 hours, he received $420.00. The claimant stated for the certified payroll period identified as
10 ending 7/27/2007 in which he worked 31 hours, he received $500.00.
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12 The claimant contends he is yet to be paid for 42.5 hours "from between the 20th of July to the 1 st
13 of August," as described above.
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15 The compliance specialist sent the employer, as referenced above, the claimant's response to
16 information originally provided by the employer in addition to certified payroll information submitted by
17 DLM Contracting and the claimant's response to the compliance specialist's request for clarification. The
18 letter was sent September 27,2007. The employer was requested to submit a response in writing by
19 October 9,2007. The employer did not respond.
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21 First, Section 18-2-412(a), MCA provides a contractor or subcontractor may "pay the amount of
22 fringe benefits and the basic hourly rate of pay that is part of the standard prevailing rate of wages directly
23 to the worker or employee in cash." However, ARM, Section 24.17.147(2) states: "All contractors,
24 subcontractors and employers shall classify each employee who performs labor on a public works project
25 according to the applicable standard prevailing rate of wages for such craft, classification or type of
26 employee established by the commissioner, and shall pay each such employee a rate of wages not less
27 than the standard prevailing rate."
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29 Secondly, just as the burden of proving that an individual is exempt and not subject to overtime
30 coverage is on the employer claiming exemption, so too is record-keeping responsibility placed on the
31 employer under state and federal law. See Roan v. Rosebud County, 627 P.2d 1222, (Mont 1980). In
32 instances where an employer has failed to keep time records on employees subject to the law, the courts
33 have held that the employee need only prove the extent of overtime worked as a matter of just and
34 reasonable inference. In Garsio v. Department of Labor and Industrv, 172 Mont. 182,562 P.2d 473
35 (Mont 1977), the Montana Court adopted the standard set forth first in Anderson v. Mt. Clemens Pottery.
36 328 U.S. 680 wherein the U.S. Supreme Court held:
37
38 .....where the employer's records are inaccurate or inadequate and the employee cannot
39 offer convincing substitutes, a more difficult problem arises. The solution, however, is not to
40 penalize the employee by denying him any recovery on the ground that he is unable to prove the
41 precise extent of uncompensated work. Such a result would place a premium on the employer's
42 failure to keep proper records in conformity with his statutory duty; it would allow the employer to
43 keep the benefits of an employee's labors without paying due compensation as contemplated by
44 the Fair Labor Standards Act. In such a situation we hold that he has in fact performed work for
45 which he was improperly compensated and if he produces sufficient evidence to show the
46 amount and the extent of the work as a matter of just and reasonable inference... "
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48 The Montana court then went on to set a procedure for determining how to address no records, or
49 inadequate records. In doing so, the Montana court adopted the reasoning of the Michigan Supreme
50 Court wherein that court, in Purcell v. Keegan, 103 N.W. 2d 494 held:
DETERMINATION - 4
1 "When the employee shows, as he did here, that he did in fact perform overtime work for which
2 he was not properly compensated and produces sufficient evidence to show the extent and
3 amount of such work as a matter of just and reasonable inference, the burden shifts to the
4 employer to come forward with evidence of the precise amount of work performed or with
5 evidence to negate the reasonableness of the inference to be drawn from the evidence of the
6 employee. And if the employer fails to produce such evidence, it is the duty of the court to enter
7 judgment for the employee, even though the amount be only a reasonable approximation. "
8
9 Finally, the Administrative Rules of Montana, Section 24.17.301 requires: "All Contractors,
10 subcontractors or employers performing work on public works contracts shall make and maintain for a
11 period of three years from the completion of work upon such public works projects, records necessary to
12 determine whether the prevailing rate of wage and overtime has been or is being paid to employees upon
13 public works projects.
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15 According to the payroll record submitted by the general contractor, for the payroll period
16 identified as ending 7/20/2007, the claimant was to be paid $639.52 for 28 hours worked, presumably at
17 the prevailing rate for Laborer Group 2, listed on the payroll at $22.84 per hour. The claimant states he
18 was paid $420.00 in cash.
19
20 The employer did not submit a payroll ledger as requested nor subsequently dispute the
21 claimant's contentions concerning dates or pay amounts. Absence definitive employer payroll records
22 establishing amounts paid and in light of the foregoing discussion of Garsjo, the compliance specialist
23 finds the claimant was underpaid for 28 hours worked for the payroll period identified as ending
24 7/20/2007.
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26 Also, according to the payroll record submitted by the general contractor, for the payroll period
27 identified as ending 7/27/2007, the claimant was to be paid $708.04 for 31 hours worked at the prevailing
28 rate for Laborer Group 2, listed on the payroll at $22.84. The claimant states he was paid $500.00 in
29 cash.
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31 Again, the employer did not submit a payroll ledger as requested nor subsequently dispute the
32 claimant's contentions concerning dates or pay amounts. Absence definitive employer payroll records
33 establishing amounts paid and in light of the foregoing discussion of Garsjo, the compliance specialist
34 finds the claimant was underpaid for 31 hours worked for the payroll period identified as ending
35 7/27/2007.
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37 As mentioned above, the claimant indicates he performed work on the above referenced project
38 July 20,23, 24, 25, 26 and August 1, 2007 at 8.5 hours, 4 hours, 9.5 hours, 9 hours, 7.5 hours and 4
39 hours, respectively for a total of 42.5 hours unpaid.
40
41 Once again, the employer did not submit a payroll ledger as requested nor subsequently dispute
42 the claimant's contentions concerning these claimed unpaid hours. Absence definitive employer payroll
43 records establishing amounts paid and in light of the foregoing discussion of Garsjo, the compliance
44 specialist finds the claimant was not paid for hours worked for 42.5 hours worked during six days between
45 and including July 20 and August 1,2007.
46
47 As stated above, the employer is required to maintain "records necessary to determine whether
48 the prevailing rate of wage and overtime has been or is being paid.. .upon public works projects." The
49 compliance specialist spent an inordinate amount of time trying to impartially make sense of the facts in
50 this case. As with the question of time worked, the question of payroll advances could easily be
determined through the examination of complete and accurate payroll records with appropriate notations.
DETERMINATION - 5
DETERMINATION - 6
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Absent those records, it is impossible for the compliance specialist to make a determination on any credit
the employer may have received because of advances in pay.
It is further found that the prevailing rates were not paid in accordance with 18-2-401 et seq.,
MCA. Since the employer failed to pay the prevailing wage, 18~2A07, MCA requires penalties be
assessed. First, a penalty of $25.00 for each day Jacob L. Forsythe was underpaid which has been
estimated to be 14 days totaling $350.00. In addition, a penalty of $279.65 which represents 20% of the
delinquently paid prevailing wages and fringe benefits is assessed and payable to the Department of
Labor and Industry. Also, a penalty for audit costs is assessed in the amount of $41.98, and payable to
the Department of Labor and Industry. (See attached spreadsheet for wage and penalty calculations.)
III. RESOLUTION
This matter may be resolved by submitting a company check, cashiers check, or money order in
the amount of $2,069.89 as determined above made payable to the Employment Relations Division, P.O.
Box 6518, Helena MT, 59604 within the time specified below. NOTE: Appropriate state and federal
withholdings should be made from the requested wage portion only and an itemized statement
submitted.
IV. APPEAL RIGHTS
The employer or the employee may either appeal this Determination or request a
Redetermination. Either request must be in writing, to the attention of Tonya McCormack, Bureau Chief,
Labor Standards Bureau, Employment Relations Division, P.O. Box 6518, H lena, M ,59604. The
appeal (Hearing), or request for Redetermination must be postmarked by . Q. 0
You must set out the reason for the request including any new or additional in ormation that would alter or
affect the original Determination.
If your appeal/redetermination request is faxed, according to 24.16.7517, ARM the fax needs to
be received by 5:00 p.m. on or before the above stated date and the original document must be received
within 5 days of the facsimile or the appeal/redetermination request will not be recognized as timely.
If an Appeal, Request for Redetermination, or payment is not made by the above postmarked
date, this Determination will be final to the Wage and Hour Unit, and an Order on Default will be issued in
the amount of the Determination.
O..j~ c:u..
I'r /1.
Dated this .J day of
.2007.
~t~
Randy Siemers
Compliance Specialist
DETERMINATION - 6
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**************
CERTIFICATE OF SERVICE
The undersigned does hereby certify that a true and correct copy of the foregoing Determination
was served upon the following on the ~day of Oc....1:o.h.ah ~ ,2007, postage paid and
addressed or delivered as indicated:
CONCRETE CONSTRUCTION
ATTN MR SCOTT PARSONS
3680 MAGENTA ROAD
BOZEMAN MONTANA 59715
JACOB L FORSYTHE
815 N 5TH #12
BOZEMAN MONTANA 59715
CITY OF BOZEMAN
A TTN BRIT FONTENOT
PO BOX 1230
BOZEMAN MONTANA 59715 4751
CITY OF BOZEMAN
ATTN SARA FOLGER CTEP LPA
20 E OLIVE ST
BOZEMAN MONTANA 59715 4790
DLM CONTRACTING
40 SPANISH PEAK DRIVE
BOZEMAN MONTANA 597186940
CT A ARCHITECTS
ATTN EIRIK HEIKES
12 N 23RD ST
BILLINGS MONTANA 59101 2467
9>~VV\ 1\tA~
. ~
DETERMINATION.7
. ~
~
MilWAUKEE RD RAIL TRAll- BOZEMAN
WORKWEEK
ENDING
EMPLOYEE
TYPE
OF WORK
07/2Q12OO7 JACOB L. FORSYTH E LABORER
07127/2007
07120-07126
0810 112007
Concrete Construction
Jacob L f ars}'1he
\.Vage Calculations
OClooer 12, 2007
S
M
TOTAL
HOURS
OT
HOURS
PW
RATE
REG
HOURS
T
W
TH
S
F
6.00
6.00
4.00
8.00
TRAVEL
FRINGE OR
BENEFITS ZONE PAY
9.50
8.00 4.00 28.00 28.00 000 17.34 550
9.00 9.00 7.00 31.00 31.00 0.00 17.34 5.50
9.00 7.50 8.50 38.50 38.50 0.00 17.34 5.50
4.00 4.00 4.00 0.00 17.34 5.50
4 GO 2.00 3 C{'
1400
300
2.00
$2,318.26 TOTAL EARNED
$920.00 TOTAl PAID
$1,396. 26 TOTAL DUE
279.65 20% PENALTY ON DELINQUENTLY PAID WAGES ANOJOR FRINGE BENEFITS
350.00 $25 PER DAY PENALTY FOR EACH DAY EMPLOYEE UNDERPAID WAGES ANDlOR FRINGE BENEFITS, ESTIMATED AT 14 DAYS
41.98 AUDIT COSTS DUE AND PAYABLE TOTHE DEPARTMENT
$2,06989 TOTAL ADDITIONAL WAGES AND/OR PENALTY DUE FROM EMPLOYER
REG
RATE
22.84
22.84
22.84
22.84
OT REG WAGES ADDITIONAL
RATE FOR All HRS \" OT WAGES
26.01
26.01
26.01
26.01
639.52
706.04
679.34
91.36
TOTAL
WAGES
0.00
0.00
0.00
0.00
639.52
706.04
679.34
91.36
$2,318.26
WAGES
PAID
420.00
500 00
0.00
0.00
$920.00