DLT announces $1.3M in civil penalties for 2 workplace fraud cases

THE DEPARTMENT OF LABOR and Training announced the results of two workplace fraud cases against two companaies that resulted in $1.3 million in civil penalties and nearly $1 million in back wages for about 200 workers.
THE DEPARTMENT OF LABOR and Training announced the results of two workplace fraud cases against two companies that resulted in $1.3 million in civil penalties and nearly $1 million in back wages for about 200 workers.

CRANSTON – The R.I. Department of Labor and Training announced the outcomes of two fraud cases investigated with the Underground Economy and Employee Misclassification Task Force resulting in $2.3 million in back wages and civil penalties, the organization announced Monday.

The two cases resulted in nearly $1 million in back pay for 200 workers, and civil penalties of a combined $1.3 million. Both companies wrongly misclassified workers as independent contractors.

“When companies cheat, it harms the employees they’ve underpaid and hurts everyone else, too — all of the businesses and taxpayers that are playing by the rules and helping our economy grow,” said Gov. Gina M. Raimondo. “These cases and outcomes are about ensuring fairness so that workers, employers and all Rhode Island taxpayers can benefit.”

In a complaint against Greenwich-based Valet Connection Inc., it was found that the company wrongly misclassified 167 drivers between January 2013 and May 2015. The company was ordered to pay $258,235 in wages owed plus interest of $116,735 to workers, a civil penalty equal to twice the wages owed ($516,471) and a misclassification penalty of $83,500.

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The second complaint, against C & D Industrial LLC, a Central Falls company, followed allegations the company was underpaying wages on seven public projects from January to March 2015. State law dictated the company had to pay its workers prevailing wages on publicly funded projects costing $1,000 or more. C & D Industrial admitted the violation and must pay $728,377 in wages owed to 35 workers, a $728,377 civil penalty and a $35,000 misclassification penalty.

“Governor Raimondo has made the enforcement of workplace fraud one of DLT’s top priorities,” said DLT Director Scott Jensen. “By coordinating efforts across state government to identify and stop fraudulent employment activities and by cracking down on violators, we are protecting the health, safety and benefit rights of workers and helping law-abiding employers get the fair shot at success that they deserve.”

Led by DLT, the misclassification task force includes the Office of the Attorney General, Department of Business Regulation, Division of Taxation, Department of Public Safety and Workers’ Compensation Court. The Contractors’ Registration and Licensing Board assists in some capacities.

Chief Labor Standards Investigator Wendy Antonelli, Labor Standards Investigator Joseph Szrom and Labor Standards Examiner Angela Dennett led the investigation into Valet Connection Inc. Chief Prevailing Wage Investigator Lisa Tirocchi and Senior Prevailing Wage Investigator Mark Ryan led the investigation of C & D Industrial.

Chris Bergenheim is the PBN web editor.

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