Labor advocates call on Twin Cities developers to agree to independent monitoring

By: - May 12, 2022 4:33 pm

Pedro Carbajal, a construction worker and CTUL member, says developers must take action to crack down on wage theft, labor trafficking and other abuses by their subcontractors during a news conference on May 12, 2022 in Minneapolis. Photo by Max Nesterak/Minnesota Reformer.

Workers and labor advocates are calling on the largest residential developers in the Twin Cities to take greater responsibility for preventing wage theft and other labor violations on their construction projects by signing onto a new independent monitoring program.

Under the program, called “Building Dignity and Respect,” developers would sign legally-binding contracts to uphold basic worker rights on their jobs sites and allow for independent investigators to monitor for compliance. Developers would also agree not to work with subcontractors that violate the program’s labor standards and don’t adequately rectify the violations.

The effort, modeled after a program for agricultural workers, is being led by the worker advocacy group Centro de Trabajadores Unidos en la Lucha (CTUL) and its affiliate, the Building Dignity and Respect Standards Council.

“We know that we’re not going to change this industry by getting rid of just one (bad) subcontractor,” said Daniel Sanchez, a construction worker and CTUL member, in Spanish through an interpreter during a Thursday news conference.

“Developers need to work with us to put an end to wage theft and other abuses,” he said.

Sanchez says he is currently trying to reclaim more than $110,000 in unpaid wages from a construction company. He’s one of thousands of Minnesota construction workers thought to be victims of wage theft each year — violations that are rarely addressed by government authorities.

Nearly half of 76 construction workers surveyed by CTUL in 2019 said they had experienced wage theft.

Across the state, an estimated 30,000 construction workers — nearly one in four workers — are misclassified as independent contractors or paid off the books, according to an estimate by the Midwest Economic Policy Institute. This keeps workers from receiving basic protections, including overtime and workers compensation insurance.

Minnesota Attorney General Keith Ellison points to an illustration of the layers of subcontractors common on construction projects. “The person at the top of that ladder deserves dignity, deserves respect and deserves to be paid fairly,” Ellison said during a news conference on May 12, 2022 in Minneapolis.

Attorney General Keith Ellison joined workers and labor advocates on Thursday, calling on contractors to pay workers fairly and highlighting his office’s efforts to come after those that don’t.

“If I get reports that workers are being stolen from and if we can prove that it’s true, we will take enforcement action,” Ellison said. His office’s anti-wage theft division has recovered more than $250,000 in unpaid wages for workers.

Minnesota lawmakers ratcheted up the penalties for wage theft in 2019, enacting one of the nation’s toughest laws in the country, making wage theft in excess of $1,000 a felony subject to up to $100,000 in fines and 20 years in prison.

Since the law passed, however, no one has been convicted criminally with wage theft.

Ellison’s office has referred cases for criminal investigations, according to a spokesman, but has not disclosed details of the cases.

Labor experts and state leaders blame a lack of criminal investigatory power for the absence of any prosecutions. Police and local sheriffs departments are for the most part ill-equipped to  conduct monthslong investigations into complicated, white collar crimes, while state investigators at the Bureau of Criminal Apprehension have limited resources to pursue complaints.

The Building Dignity and Respect program, run by a similarly named local non-profit, seeks to end workers’ reliance on government regulators to investigate their claims.

Should a developer sign on to the program, they and the subcontractors they hire would be legally bound to uphold certain human rights standards. Workers would receive training on their rights and would be able to file complaints with Building Dignity and Respect.

If the program’s investigators determine there was a violation — such as a subcontractor didn’t pay a worker time-and-a-half for overtime — they would propose a resolution to be negotiated with the subcontractor. If they can’t agree on a resolution, the two parties would enter arbitration. Subcontractors that don’t resolve the complaints and come into compliance would no longer be eligible to bid on projects by participating developers.

Persuading developers to voluntarily agree to a legally-binding program is a tall order, and no developer has yet to agree.

Leaders from CTUL sent letters to nearly a dozen large developers asking for a meeting to discuss the proposal: Continental, Dominium, Doran Properties Group, Enclave Companies, Hall Sweeney Properties, MWF Properties, Perkins and Levin, Roers Companies, Solhem Companies, United Properties and Yellow Tree.

They heard back from just Yellow Tree and met with the company’s leaders twice in recent months to discuss the program.

Members of CTUL and the carpenters union also pitched the idea to the leaders of the Vikings’ development arm MV Ventures, for their sprawling, multi-use development in Eagan, but were rebuffed.

More than 25 workers on that project have filed complaints with the state Department of Labor and Industry claiming more than $100,000 in wage theft, as the Reformer reported this month.

While Building Dignity and Respect has yet to find a developer to sign on, such a program is not without precedent.

It’s based on a model developed in the 1990s and 2000s by tomato pickers and activists in Florida. They won better labor standards through pressuring large fast-food franchises like Taco Bell to only buy from growers that adopted a code of conduct.

Although many fast-food executives initially scoffed at the demands, the Campaign for Fair Food eventually persuaded Yum! Brands, McDonald’s, Whole Foods and Walmart to agree to legally-binding agreements that have improved wages and working conditions for farm workers across the country.

Workers and labor activists believe the same model can improve working conditions in the non-unionized construction sector, which — like the agricultural industry — is dominated by Latino immigrant workers.

“If they can do it there. We can do it here,” said Pedro Carbajal, a CTUL member and construction worker, in Spanish through an interpreter.

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Max Nesterak
Max Nesterak

Max Nesterak is the deputy editor of the Reformer and reports on labor and housing. Previously, he was an associate producer for Minnesota Public Radio after a stint at NPR. He also co-founded the Behavioral Scientist and was a Fulbright Scholar to Berlin, Germany.