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L&I: Light-rail contractor owes over $800K in unpaid wages

Texas-based Penhall faces largest WA prevailing wage citation in recent years


SEATTLE (March 26, 2021) — A contractor on a Sound Transit light rail project has been cited for shorting more than three dozen workers hundreds of thousands of dollars in wages. After a lengthy investigation, the Washington State Department of Labor & Industries (L&I) recently cited Penhall Company. L&I ordered the firm to pay more than $800,000 in unpaid wages, interest, and fines.

Texas-based Penhall, with an office in Tukwila, failed to pay appropriate wages and overtime to 37 workers for work on the Sound Transit East Link Extension. In all, the employees are owed $648,609.68 in wages and interest. The balance, more than $150,000, includes fines for failure to pay prevailing wage and filing falsified certified payroll reports. It’s the largest citation L&I’s Prevailing Wage Program has issued in recent years. Penhall is appealing the notice of violation.

“Workers should be paid what they’ve earned, and in this case the company didn’t pay the correct wage for the work these employees were doing,” said Jim Christensen, L&I’s Prevailing Wage Program manager.

Incorrect classification resulted in the wrong pay

The investigation started after a Penhall employee filed a complaint with L&I in February 2019. State investigators found that workers were inappropriately classified for the job they were doing, and as a result paid at a rate too low for their work. Penhall paid the workers $38.57 in hourly wages and benefits as laborers, when the workers should have received $58.69 an hour as surveyors. One worker is owed nearly $100,000 in wages and interest.

The investigation covered the period from July 2017 to December 2019. L&I placed a lien on the project as a way to enforce payment on the wages. In most cases, contractors submit payroll records when they are requested by L&I. In this instance, Penhall required L&I to obtain them by subpoena.

Kiewit Corp.-Hoffman Construction is the prime contractor for the $3.6 billion East Link Extension between Seattle and South Bellevue. Service is slated to begin in 2023.

Tougher state law

As a result of a state law passed in 2019, violators of prevailing wage law are now required to pay interest on unpaid wages. The law also increased penalties for wage and reporting violations.

“The law strengthened enforcement as a way to discourage violations of the state’s Prevailing Wage Law,” Christensen said. “The easiest way for contractors to avoid these citations is to simply follow the law. We have plenty of training and assistance to help with that.”

Prevailing wage training and resources available from L&I include a variety of training modules, a recently revised booklet on prevailing wage law, and a revised website with specific information for contractors, workers, and other audiences.

L&I enforces the state’s prevailing wage law, which protects workers by setting wages for specific work. It covers workers on school, roads, and other types of public projects. The law also helps ensure that contractors have a level playing field when bidding on public projects.

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