Last Wednesday, representatives from the Connecticut Department of Labor (DOL) found two of the subcontractors running the Davenport construction project to be in violation of proper worker’s compensation practices. Both Leon Construction and Qui Construction were given stop-work orders based on their failure to provide compensation benefits to workers and for misrepresenting those individuals as independent contractors. While Qui Construction has been cleared and has resumed construction, Leon Construction remains an open case and cannot return to work until cleared by the DOL.
The stop-work orders stipulated that both firms cease all business operations for the worksite or face a daily penalty of $1,000. However, the stop-work orders were issued to only two subcontractors, so the overall construction project, led by general contractor PAC Group LLC, was not shut down.
The renovation of the former Davenport Campus Center, led by Project Manager and Construction Services Consultant Alan Rubacha and PAC Group, began in October of 2008. The building is set to re-open this upcoming fall as the Allbritton Center for the Study of Public Life, which will hold a Quantitative Analysis Center, faculty offices, and Instructional Media Services, as well as the Shapiro Creative Writing Center.
Although PAC Group leads the building’s construction, certain jobs have been subcontracted out to various firms, such as Leon and Qui. Leon Construction was subcontracted for taping and installing dry wall, while Qui Construction was hired to handle demolition, framing, and drywall on the project.
During a routine inspection, the DOL found that the two subcontractors had hired their workers as independent contractors. The concern is that the firms were attempting to sidestep state law by classifying individuals as independent contractors rather than employees. This allows firms to avoid a requirement in the Workers’ Compensation Act that compels them to provide worker’s compensation and other benefits to employees.
In June of 2007, the Worker’s Compensation Act was amended, strengthening the power of the DOL to take action against firms found to be misrepresenting employees as independent contractors or to those found improperly compensating employees. Effective October 1, 2007, Public Act No. 7-89 allows the DOL to issue stop-work orders to firms in violation of these regulations.
This change in the law has affected a number of companies, said Resa Spaziani, a supervisor for the Division of Wage and Work Place Standards.
According to Joyce Topshe, Associate Vice President for Facilities, representatives from the DOL also visited the North Haven campus of Quinnipiac University on Wednesday and conducted a similar investigation.
On Thursday, a conference call between University administrators, Spaziani, a representative from PAC Group, and a representative from Qui Construction was organized to resolve the issue. Based on established practices and processes, neither PAC Group nor the University had the ability to fully examine the relationships between subcontractors and those they subsequently contract. Consequently, according to David Pesci, Spaziani did not believe there was negligence on the part of PAC or the University.
“The DOL rep stated that PAC and Wesleyan have been responsive and moved quickly to resolve the situation,” Pesci wrote in an e-mail to The Argus.
To resolve the situation, Qui opted to put the workers needed to complete the project on their payroll. The workers will then receive the necessary workmen’s compensation coverage. This decision was verified by the DOL on Friday. The stop work order placed on Leon Construction, however, still remains intact.
“Qui construction has been resolved, but Leon construction remains open,” Spaziani said. “Qui Construction can go back to work, but Leon Construction cannot.”
By the end of the week, it was suggested that the employees from Leon Construction be placed on Qui’s payroll to resolve the situation. However, the two subcontractors have not yet come to an agreement. With the stop work order for Leon still in place, then, the firm cannot return to work on the Davenport construction site until they have been cleared by the DOL.
“We certainly would not accept them working here if they’re not following the proper rules and regulations,” Rubacha said.
Rubacha explained, however, that he would not like to see Leon Construction removed from the project as long as the issue can be resolved with the DOL.
“We don’t want to break up the team,” Rubacha said. “Ultimately what I want to see is that everyone get work and that everyone get paid.”
Although the stop work order still remains in place for Leon Construction, it will not postpone the opening of the Allbritton Center, explained Rubacha. At this point, all demolition, 40 percent of framing, and half of the mechanical and electrical rough-in are complete.
“This will have no impact on the date projected,” Rubacha said. “That’s the least of our concerns with this issue. Our biggest concern is that workers are treated fairly. Second is that folks have an opportunity to be productive and make money.”