​​​​​​​Washington DC Attorney General Settles Misclassificaiton Claims with Cleaning Company and Drywall Contractor

The Office of the Attorney General for the District of Columbia announced the settlement of claims of misclassification against two companies: a cleaning compnay and drywall contractor. 

Settlements With Cleaning Company & Construction Company Compensate Workers Who Were Deprived of Overtime Wages & Paid Sick Leave

WASHINGTON, DC – Attorney General Brian L. Schwalb today announced that two companies – cleaning business Commercial Real Estate Consulting Group and drywall contractor T&A Construction – will cumulatively pay more than $193,000 to misclassified DC workers who were deprived of wages and benefits. As part of separate settlements that resolve allegations that these companies failed to comply with the District’s wage and hour laws, the companies will also pay more than $145,000 in civil penalties to the District and will correct their practices to ensure compliance with District law moving forward.

“The Office of the Attorney General won’t allow companies to profit at the expense of their workers—or gain an unfair advantage over their competitors by flouting the law,” said AG Schwalb. “We are committed to protecting DC workers, ensuring collection of DC taxes, unemployment insurance premiums and workers’ compensation payments, and ensuring a level playing field for all District businesses. Community tips are a critical part of these investigations, and I encourage anyone who believes that a District business is violating workers’ rights to contact our office.” 

Details of the cases are below:

T&A Construction, LLC 
T&A Construction, LLC (T&A) is a Virginia-based drywall contractor that conducts business in the District. An OAG investigation revealed that between 2018 and 2021, T&A improperly retained subcontractors to supply workers for projects across DC, and these subcontractors improperly misclassified scores of construction workers as independent contractors rather than properly classifying them as employees. As a result, these workers were deprived of paid sick leave and other work benefits. This misclassification affected construction workers at the following worksites: 2000 L Street NW, One M Street SE, 1515 New York Avenue NE, Washington, and 655 15th Street NW.

T&A stopped these misclassification practices in 2021 and now relies on workers properly classified as employees. To resolve OAG’s investigation into prior wage and hour violations, T&A will:

  • Pay $100,000 to harmed workers: Workers who were previously misclassified as independent contractors will receive compensation.
  • Pay $125,000 in penalties to the District.
  • Stop doing business with subcontractors that previously misclassified workers: T&A is prohibited from doing business with the subcontractors that misclassified workers on the above listed worksites without OAG’s approval.

The full settlement agreement is available here.

This matter was handled by Assistant Attorney General Jude Nwaokobia, former Assistant Attorney General Michalette Haywood, Assistant Section Chief Randy Chen, and Section Chief Graham Lake.

Commercial Real Estate Consulting Group, LLC
Commercial Real Estate Consulting Group, LLC (CRECG) is a Virginia-based commercial cleaning company that does business in the District. After receiving a tip from the Latino Economic Development Center, OAG opened an investigation into allegations that CREG had misclassified workers providing cleaning services at commercial worksites in the Wharf development, failed to pay overtime wages, failed to provide required paid sick leave, and failed to provide timely final paychecks to workers who left the company. CRECG cooperated with OAG’s investigation and took corrective action.

To resolve allegations that CRECG violated the District’s Wage Payment and Collection Law, Minimum Wage Revision Act, and Sick & Safe Leave Act, the company will:

  • Pay $93,109 in restitution and damages to workers: Cleaning workers will receive restitution and damages for overtime wages and paid sick leave they are legally owed.
  • Pay a civil penalty of $21,00 to the District. 
  • Ensure compliance with District law moving forward: CRECG will implement policies and practices to ensure compliance with all District wage and hour laws moving forward, and will submit proof of compliance to OAG. CRECG has also committed to accurately classifying workers as employees.

The settlement agreement is available here.

This matter was handled by former Investigator Amelie Clemot and Assistant Section Chief Randy Chen.

What Is Worker Misclassification?
Misclassification is a form of wage theft that reduces costs for companies at the expense of employees. Misclassifying employees as independent contractors deprives them of rights that employees are entitled to, such as the minimum wage, overtime compensation, and paid sick leave. Illegal misclassification also deprives the District of tax revenue, unemployment insurance premiums, and workers compensation contributions. District construction companies that misclassify workers unlawfully avoid at least 16.7% in labor costs compared to law-abiding companies, providing an unfair advantage over their competition.

OAG’s Efforts to Protect Workers
In 2021, OAG established the Workers’ Rights & Antifraud Section, which is dedicated to fighting wage theft and protecting District workers. Since gaining wage theft enforcement authority in 2017, OAG has secured over $18 million for workers and the District by bringing investigations and lawsuits against employers who violate District law. OAG’s wage theft enforcement efforts have focused on industries with high populations of vulnerable workers, such as construction, restaurants and hospitality, healthcare, and the gig economy. OAG also released a report about how worker misclassification hurts workers, undercuts law-abiding businesses, and cheats taxpayers. Click hereto view a more comprehensive list of OAG’s legal victories standing up for workers’ rights.

Source: ​​​​​​​Attorney General Schwalb Resolves Two Wage Theft Investigations, Securing $338K in Worker Restitution & Penalties

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