R.I. Labor Dept. issues ‘historic’ wage theft penalty
PROVIDENCE — The Rhode Island Department of Labor and Training has fined a Fall River, Mass., company $869,000 for wage theft, misclassifying employees, and falsifying payroll on three public works projects, and referred the case to the state attorney general’s office to review allegations of a kickback scheme.
This settlement with WL Builders, which includes penalties and wages owed to employees, is the second-biggest DLT has had in more than decade, according to department records.
WL Builders is owned by Wallyson Domingues De Almeida, a Brazilian national who employed other immigrants, and he admitted to the DLT that neither he nor his employees had green cards or documents authorizing them to work in the US.
Despite that, WL Builders was hired as a subcontractor on three multimillion dollar projects — Rhode Island College’s Horace Mann Hall renovations and additions, the Cumberland High School transitional building, and Cumberland Hill Elementary School — and paid employees far less than the law requires and misclassified them as “independent contractors,” according to a Feb. 16 decision signed by DLT hearing officer David Barricelli and adjudication administrator Suzanne O’Donoghue.
HV Collins Co., Inc., a Rhode Island-based company that provides general contracting, construction management, and design-build services in New England, is the general contractor on the three projects.
De Almeida testified in a deposition that a superintendent for HV Collins had offered to help him find construction work because he was new to the US — but told him to pay kickbacks of 10 percent.
De Almeida showed 37 checks he paid to the superintendent totaling more than $76,000, according to the DLT decision. He said he didn’t realize he was doing anything illegal, but thought the superintendent “was offering him help for a fee, as a friend,” according to the decision.
De Almeida also said that the superintendent directed him to falsify the payroll reports to HV Collins.
The DLT did not penalize either HV Collins or the superintendent, Edward Domestico, who has been in the construction field for decades. However, Barricelli referred the case to the attorney general’s office to review for possible violations of criminal laws against kickbacks and filing false forms.
“It appears to this Hearing Officer that, unfortunately, Domestico apparently identified De Almeida as new to this country, naive and unsophisticated in construction matters,” the decision said. “He masqueraded as a good Samaritan, saying he would extend a helping hand to De Almeida in starting a carpentry business, instead of helping him, he engaged in a scheme with De Almeida as an apparent unwitting participant.”
De Almeida testified that he met Domestico in December 2020 while working for another subcontractor to HV Collins on the construction for the police department in Freetown, Mass.
De Almeida testified that Domestico invited him to work on other builds for HV Collins: a $17.57 million project at Rhode Island College’s Horace Mann Hall that began in 2020; the $2.379 million project at Cumberland High School; and the $7.42 million project at the Cumberland Hill Elementary School, both of which began in 2021.
The DLT’s investigation began in December 2021, when the Rhode Island Foundation for Fair Contracting filed a formal complaint with the DLT’s Professional Regulation Prevailing Wage Unit, alleging that WL Builders wasn’t paying its workers the prevailing wage and falsified payroll records at the Rhode Island College site.
Then, DLT’s workplace fraud investigator reviewed the projects in Cumberland and found the same problems. He filed complaints against WL Builders in May 2023.
All three complaints went to a hearing on Sept. 18, 2023.
State law requires contractors and subcontractors on any publicly funded project costing $1,000 or more pay the prevailing wage to workers.
While De Almeida ended up hiring 15 employees, all immigrants from Brazil who didn’t speak English, he didn’t pay any of them the prevailing wage, according to the hearing officer’s findings.
The workers should have been paid an hourly wage rate of $33.55, with an hourly fringe benefit rate of $26.15. Instead, they were paid anywhere between $7.60 to $26.32 an hour, with no fringe benefits.
HV Collins paid WL Builders $743,493 for work on the three projects, according to invoices cited by the DLT. De Almeida paid his employees a total of $196,479.
Under the DLT’s decision, De Almeida must pay his 15 employees a total of more than $414,000 to make up their missing wages, and unpaid fringe benefits — plus 12 percent interest per annum.
De Almeida also was ordered to pay the state of Rhode Island more than $455,000 in fines for misclassifying employees, falsifying payroll, and not paying the prevailing wages.