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Workers on Vikings development claim over 0,000 in wage theft

Workers on Vikings development claim over $100,000 in wage theft

Guillermo Macario-Alcocer was out of money and living in the basement of a church in south Minneapolis when he got a lead on some construction work.

A volunteer at the church told him to call a man who in turn told him to go to the new Vikings training facility in Eagan that Monday at 6 a.m.

It was early January 2021 and despite the freezing temperatures, workers were busy on the first apartment buildings on the Viking Lakes complex, a sprawling multi-use development that also includes the NFL team’s new headquarters, training facility and hotel.

Macario-Alcocer found the office trailer and was hired on the spot by a subcontractor called Absolute Drywall. He started that morning sweeping floors, hauling out garbage and carrying sheets of drywall for the new luxury apartment buildings.

He was offered $15 an hour with plenty of hours: 10 to 12 hours a day, six days a week. With time-and-a-half for overtime, he should have been making at least $1,000 per week.

Macario-Alcocer was never actually paid that much, according to three months of pay stubs reviewed by the Reformer. Even after the boss told him he was getting a raise to $18 an hour and then $20 an hour, his paycheck stayed the same: about $800 a week.

When he asked about it, the boss told him taxes go up when wages go up.

The paystubs show his hours trending down as his hourly rate went up as he worked on Absolute Drywall projects across the state. Some weeks they showed he worked just 19 hours although Macario-Alcocer says he never worked less than 50 hours a week.

Over the time that Macario-Alcocer worked for Absolute Drywall, he says he suffered from three injuries on the job, including a hernia, for which he would defer surgery for a year for lack of insurance and paid time off.

Macario-Alcocer is one of more than 35 workers who have filed complaints against two subcontractors with state labor authorities for wage theft, according to the carpenters union. At least 25 of those worked on the Viking Lakes project.

The workers were organized by the North Central States Regional Council of Carpenters, which is motivated both by improving working conditions and thwarting contractors that undercut union bids with low wages and unfair labor practices.

Wage theft costs the state upwards of $136 million a year in lost tax revenue, according to one estimate by the Midwest Economic Policy Institute.

And while Minnesota passed one of the toughest wage thefts laws in the country in 2019, it has yet to enforce it.

Carpenter union officials say they have been forced to do their own investigations to bring justice to the workers.

The state Department of Labor and Industry said it does not confirm open investigations.

Nicole Blissenbach, the deputy commissioner of the Minnesota Department of Labor and Industry, said the agency has made criminal referrals in response to their civil investigations of wage theft in the past.

Wage theft, however, is a notoriously complex crime to investigate. Contractors and workers often don’t keep good records of the hours they worked or even how much they were paid. Often claims have to be recreated after the fact based on estimates of how much time workers spent on the job.

Workers on the Viking Lakes project interviewed by the Reformer tell similar stories of working upwards of 12 hours a day, six days a week yet not being paid what they’re owed.

Pedro Victoriano, 28, installed siding at the Viking Lakes project for a subcontractor called Property Maintenance and Construction, which is a subcontractor of Advantage Construction, the company hired by the Vikings’ property development firm, MV Ventures.

Victoriano says he was told he would earn $25 an hour. Victoriano says he was paid in cash and believes he is still owed more than $10,000.

Alfredo Meraz, 48, was one of the highest paid workers for Property Maintenance and Construction, making about $28 an hour. He also says he was paid in cash and estimates he is owed more than $20,000.

Together, the workers for Absolute Drywall and Property Maintenance and Construction say they are still owed more than $100,000 in wages for their work on the Viking Lakes apartments as well as hundreds of thousands more on construction projects across the state over the past two years.

The workers have risked retaliation to file complaints with the state’s Department of Labor and Industry against the two subcontractors in hopes of being made whole and setting an example for other developers.

Lester Bagley, executive vice president for public affairs for the Minnesota Vikings, said they are not aware of any unfair labor allegations at the Viking Lakes project.

“All selected subcontractors are legally entitled to bid and perform work in Minnesota. They also signed agreements ensuring fair labor practices for workers at the site and requiring strict compliance with all federal and state labor, benefit, workers’ compensation and wage laws,” Bagley wrote in an email to the Reformer.

Reached by phone, Advantage Construction owner Chris Amiot said he was aware of an “inquiry” into labor violations at the Viking Lakes project but didn’t know the specifics. He said his company didn’t have anyone on payroll at the project and subcontracted the work to Property Maintenance and Construction. He then hung up and did not return calls seeking more information.

Leo Pimentel, the owner of Property Maintenance and Construction, denied the workers’ allegations.

“PMC is unaware of any current investigation from the Minnesota Dept of Labor and Industry (DOLI).  We have not been contacted by them nor informed of any type of complaints you have mentioned.  We feel that what you have mentioned above is unsubstantiated and any article published related to this would be done at your own risk,” Pimentel wrote in an email.

Daniel Ortega, the owner of Absolute Drywall, did not return multiple calls requesting comment. A former accountant for the company reached by phone said the company always paid workers appropriately for their hours. He left for a new job before work was complete at the Viking Lakes project, but said they submitted weekly payroll sheets to MV Ventures and didn’t employ people without documentation showing they can legally work in the United States.

“The labor unions are upset that they didn’t get the job and they’re going to try anything they can to tarnish the name of (Ortega’s) company,” the former employee said, who would not give his name on the record.

***

The Viking Lakes luxury apartments, Monday, May 2, 2022 in Eagan, Minnesota. Photo by Nicole Neri/Minnesota Reformer.

Wage theft is so common in construction, labor experts say it amounts to a business model.

Nearly a quarter of construction workers in Minnesota — about 30,000 people — are misclassified or paid off the books, according to an estimate by the Midwest Economic Policy Institute. Such actions can keep workers from receiving basic protections, including overtime and workers compensation insurance.

Labor leaders say the prevalence of wage theft has made it all but impossible for reputable contractors to stay in business, and so the construction industry is divided into two distinct tiers.

The higher tier is made up of unionized workers, who work on safer job sites and earn high wages, health benefits and pensions. Despite costing developers more, the trade unions have remained competitive in the state on commercial projects and projects with government money, which requires that workers make prevailing wages.

The lower tier, which dominates residential construction, is made up of workers who earn lower wages with no benefits and are often cheated out of overtime pay. Because many of these workers are Latino immigrants and may not have work authorization, they are easily exploited and intimidated with threats of deportation.

The 2019 wage theft law makes stealing more than $1,000 in wages a felony subject to up to $100,000 in fines and 20 years in prison.

But no employer has been charged for wage theft.

Employers seldom face consequences for cheating workers out of pay and benefits. When they do, the penalties are rarely severe enough to force a business to change, let alone an industry.

Absolute Drywall, for instance, continued to operate and only faced lax penalties after being cited for multiple labor violations. In 2016, the state Department of Labor and Industry found Absolute Drywall misclassified workers and was fined $1,000.

That same year, the U.S. Department of Labor found the company employed a 14-year-old hanging drywall, in violation of child labor laws. The teenager sometimes worked more than 50 hours a week.

This case prompted a second investigation and the U.S. Department of Labor determined the company misclassified workers, which allowed it to avoid paying overtime, health insurance and payroll taxes. The company was ordered to pay some 27 workers over $100,000 in unpaid wages.

Absolute Drywall owner Ortega told federal investigators that workers wanted to be independent contractors so they wouldn’t have to keep track of the hours they worked.

There were no penalties in either case, according to a U.S. Department of Labor spokeswoman.

In 2018, Absolute Drywall was sanctioned yet again by the state Department of Labor and Industry for submitting “false and misleading information” to state regulators and using subcontractors that hadn’t properly registered their companies with the state. The company was fined $6,000.

Executives of the Vikings and MV Ventures, which acted as the general contractor on the Viking Lakes project, knew about these previous violations, because they are public records and representatives of the Carpenters Union told them.

***

Guillermo Macario-Alcocer believes he’s still owed thousands of dollars in wages for his work on the Viking Lakes projects and developments across the state. Photo by Max Nesterak/Minnesota Reformer.

Macario-Alcocer didn’t know about Absolute Drywall’s history of labor violations when he showed up to the Vikings construction site in 2021 looking for a job.

On his first day at the Eagan development, he was excited.

The opportunities for someone like Macario-Alcocer are limited. He doesn’t speak English, and can’t read or write.

But he’s a hard worker, honest and religious, said Jorge Duran, an organizer with the carpenters union who helped Macario-Alcocer bring his complaint to state regulators.

Since coming to the Twin Cities some 23 years ago, Macario-Alcocer mostly worked in restaurants. Construction work promised higher wages if he stuck with it.

“I was worried there wouldn’t be another job because it was my first construction job,” Macario-Alcocer said through an interpreter.

Macario-Alcocer said he was injured a little over a month after he started. He was pushing a large cart of trash and scrap drywall at a Faribault project when the cart got caught in a doorway and slammed back into his chest.

The next thing he knew he was on the ground in pain and asked his coworker to call their supervisor. He was told to go back to work.

When he got home that night, he went to a clinic in south Minneapolis where a doctor told him he would need surgery for a hernia and to rest for at least a few weeks.

Macario-Alcocer says he wasn’t able to get the surgery because he couldn’t afford it and he couldn’t get the time off work. He was called back to work after three days.

Macario-Alcocer says Absolute Drywall gave him around $300 for the injury, about as much as he could earn in three days of work. About a year later, he got the surgery in February and now has a bill, reviewed by the Reformer, for $16,870.

The second time he was injured was about a week after the hernia, this time at the Vikings project. He says he was pushing a cart laden with nine sheets of drywall when it got caught on a dumpster and the sheets — more than 500 pounds — came crashing down on his foot.

He didn’t go to the world-class Twin Cities Orthopedic Center just down the road. He didn’t leave the job site at all. After catching his breath, he called his supervisor to ask to go home but was told to keep working.

More than a year later, Macario-Alcocer says his leg still bothers him.

Macario-Alcocer was told to keep working even after a third injury, when hundreds of pounds of drywall fell on his chest at a job site in St. Paul.

After that, his time at Absolute Drywall came to an end. When he called to find out where they needed him to go next, he was simply told there was no more work.

***

A sign advertises open space for lease on the sprawling Viking Lakes development Monday, May 2, 2022 in Eagan, Minnesota. Photo by Nicole Neri/Minnesota Reformer.

The cheap labor that Macario-Alcocer provided to subcontractors on the Viking Lakes project ultimately meant cheaper costs for the project’s developer and owner of the Vikings, the Wilf family.

The Wilf family fortune was built over the past two generations by buying, building and managing apartment buildings, first in New Jersey and now in more than 30 states. The Wilf’s Garden Communities control 60,000 apartments across the country, mainly in the Northeast, California and Florida.

Until recently, the Wilf family hasn’t had a residential real estate footprint to speak of in Minnesota, despite brothers Zygi and Mark and their cousin Leonard buying the Minnesota Vikings in 2005 and building a new $1.1 billion stadium in downtown Minneapolis.

Minnesota taxpayers — mostly those who buy cigarettes and gambling pull tabs — covered $498 million of the cost. The year after it was completed, the value of the Vikings franchise — and with it the Wilfs’ personal wealth — shot up 38%.

Viking Lakes is part of the Wilfs’ first foray into residential construction in the state, built around the brand loyalty to the Vikings.

The heart of the development is the 277,000-square-foot practice facility — the Twin Cities Orthopedic Performance Center — and team headquarters, which opened in 2018. The center includes 16 treatment and training tables, exam rooms, and electric based cryotherapy chamber, a kind of freezing sauna.

The Viking Lakes project also includes office space, for which they’ve recruited other sports institutions. The United States Tennis Association Northern moved its offices to Viking Lakes, as did the Minnesota RØKKR, an official Call of Duty League franchise.

Eventually, the development could include more than 1,000 luxury apartments.

The Vikings worked exclusively with union contractors on the stadium, TCO Performance Center, TCO Eagan’s medical office building and sports medicine center and the Omni Viking Lakes Hotel, said Bagley, the Vikings executive. Union leaders say the Vikings couldn’t have built those projects without them since they required highly skilled workers.

Representatives from MV Ventures — the development arm of the Vikings franchise — reached out to the building trades before putting out bids for the new apartments they were planning. They didn’t guarantee they’d hire union contractors, but they invited them to bid on the work, said Adam Duininck, the carpenter union’s government affairs director.

But when MV Ventures released the names of their subcontractors, the construction unions and worker rights groups were incensed.

“The (Vikings) ownership group chose the worst subcontractors that we track around the region,” Duininck said. “It was honestly a betrayal of trust.”

Two subcontractors in particular stood out to union leaders: Absolute Drywall and JL Schwieters Construction.

Just three years prior, JL Schwieters Construction paid $125,000 to settle a racial harassment lawsuit filed by the U.S. Equal Employment Opportunity Commission. Two former Black employees alleged a white supervisor called them a racial slur, made a noose out of electrical wire and threatened to hang them, according to the lawsuit.

After the Vikings announced the subcontractors, the carpenters union and the worker advocacy group Centro de Trabajadores Unidos en la Lucha (CTUL) responded with a public shaming campaign.

They stood outside the entrance to the Eagan practice facility with a banner saying Vikings owners are profiting from companies that subject their workers to racial harassment, wage theft and child labor.

They blasted the Wilfs in the press for pledging millions toward “social justice causes” while using subcontractors with records of exploiting and harassing Black and Latino workers.

Vikings management responded by threatening to sue the carpenters union for defamation, Duininck said.

Duininck reached out and over multiple conference calls, he and the union’s general counsel Burt Johnson tried to persuade the Vikings to change course. On the calls were Vikings lobbyists Bagley and Dave Johnson, as well as MV Ventures executives Gary Gleason and Don Becker.

Duininck and Johnson said they told the Vikings leaders that they expected labor abuses on the apartment project. They also tried making a civic appeal to the Vikings executives, reminding them they have a relationship with taxpayers and fans because of the public money invested in the stadium.

“They just said ‘Nope, we’re just trying to make the math work,’ ” Duininck said.

The immediate financial benefits of cheaper, nonunion labor can be significant: A skilled union carpenter earns around $65 an hour including wages and benefits. Many workers for Absolute Drywall and Property Maintenance and Construction earned around $25 an hour with no benefits.

Finally, they pitched an alternative: free independent monitoring to ensure workers’ rights were being protected on the job site.

MV Ventures declined.

The relationship between the union representatives, worker advocates and the Wilfs soured.

Duinink said when they later showed up at the work site to speak to workers, they were turned away — a rare rebuff to union leaders in Minnesota.

“That’s not how we’re treated at most job sites,” Duininck said.

***

The sprawling Viking Lakes development is seen from the Omni Viking Lakes hotel Monday, May 2, 2022 in Eagan, Minnesota. Photo by Nicole Neri/Minnesota Reformer.

Historically, wage theft has been treated as a civil matter, not a criminal one, with the onus on state regulators or workers to collect evidence, find a lawyer and sue to try to win back the wages they’re owed.

That’s why the 2019 law, passed with bipartisan support, was heralded as one of the toughest wage theft laws in the country.

“Up until this bill, if you robbed a bank, you went to jail. If you robbed your employees, it was a civil fine so you went to the Bahamas,” said former Democratic state Rep. Tim Mahoney, a retired union pipefitter from St. Paul.

The law also bolstered the government’s civil investigations: It gave the attorney general explicit authority to investigate civil violations of wage theft and directed millions in additional funding to the state’s Department of Labor and Industry for seven new employees to investigate claims.

The main reason no one has been charged with felony wage theft, according to prosecutors, labor leaders and lawmakers, is a lack of investigatory power.

State investigators with the Department of Labor and Industry do civil, not criminal  investigations, so it largely falls to local police or county sheriffs departments which are more focused on violent crime.

“When the law took effect on August 1, there wasn’t a police officer in the state of Minnesota who thought it was their job to investigate wage theft,” said Johnson, the carpenters’ union attorney.

The state agency that is well positioned to investigate wage theft and other financial crimes — the Commerce Fraud Bureau — is limited to investigating insurance fraud (and is funded solely by a surcharge on insurance companies).

“There’s just a whole slew of white collar crime that is not being sufficiently looked at,” said Rep. Zack Stephenson, DFL-Coon Rapids, who has a bill to broaden the Commerce Fraud Bureau’s authority and funding.

The bureau investigated Ricardo Batres, who pleaded guilty in 2019 to labor trafficking and insurance fraud for denying his employees workers’ compensation and health benefits.

He admitted to forcing people without legal work authorization to work for his construction company sometimes in dangerous conditions that led to injuries.

“I insisted this guy had to do time,” said Hennepin County Attorney Mike Freeman, who oversaw the prosecution. “And the word spread pretty quickly in the construction world: If you play around like this, it’s not just going to be a civil fine, (you’re) going to do time.”

He was sentenced to four months in the workhouse.

The 2019 law makes it easier for prosecutors to charge employers with wage theft rather than having to prove labor trafficking or insurance fraud or theft by swindle.

Freeman insists he is considering bringing charges in more cases, but declined to give any more details.

Attorney General Keith Ellison and the Department of Labor and Industry, with its seven new investigators, say they have ramped up civil enforcement of wage theft. They’ve publicly touted their work on the issue in recent years.

Ellison won a $230,000 settlement last year with the restaurant group Bartmann Companies, which had to pay back pay, overtime and damages to more than 200 workers.

Ellison’s office also brought a case that forced Loving Care Home Services, a home health company, to pay nearly $40,000 in unpaid overtime wages and damages to 60 workers. The company did not have to pay any penalties.

The attorney general’s office didn’t refer either case to criminal investigators since they didn’t find enough evidence to prove “intent to defraud,” said spokesman John Stiles. The Attorney General’s office has referred other cases for criminal investigation, Stiles noted, but said he cannot provide specifics.

Meanwhile, the Department of Labor and Industry in 2019 recovered about $550,000 in unpaid overtime wages and damages from Baywood Home Care.

Last December, the agency celebrated recovering $334,000 in back wages for 33 construction workers employed by AE2S Construction, which did not pay workers the prevailing wage set by the state on a project partially funded with public money.

Deputy Commissioner Blissenbach declined to say if they made criminal referrals in those cases.

Because of their limited resources, Blissenbach says they choose to focus on large, high-profile cases, which means numerous small complaints aren’t investigated.

***

Jorge Duran, a union representative for the North Central States Regional Council of Carpenters, talks about the routine wage theft experienced by workers in construction on Tuesday, April 19, 2022 at his desk in Saint Paul. Photo by Nicole Neri/Minnesota Reformer.

When negotiations with the Vikings broke down, the union sent Jorge Duran to talk to workers.

He’s a bear of a man who dresses like he’s undercover even when he’s at his home base in the Carpenters Union hall in St. Paul: dark glasses, baseball hat, and, occasionally, a dayglow safety vest.

Duran, 53, is a union investigator with years of experience in a dozen states. He’s half Mexican and bilingual, which, along with his swaggering charisma, allows him to connect with the large Latino workforce in construction.

He meets workers by sneaking onto job sites or knocking on car windows when workers take their lunch breaks.

“I introduce myself and build trust with these guys,” he said. “I try to be on the same level as them, so they can feel comfortable. They’ve already been coached by their companies not to talk to us, so it can be hard to build that communication.”

He educates them to let them know it’s a long process and requires diligent documentation of wage theft and other labor violations, and that it will take time to recoup any money owed.

He started connecting with workers at the Viking Lakes project in 2021. One by one, Duran convinced dozens of workers to come forward and report their wage theft complaints to the Department of Labor and Industry.

Even when complaints are resolved, some workers never see the money. One investigation involving 50 workers dragged on so long, they lost nearly 20 workers who moved on or lost interest in pressing their claims, Duran said.

Only 16 people were actually paid, because another 16 never claimed their money that is still sitting with the attorney who handled the case, he said.

The union is filling a gap in investigatory prowess left by law enforcement and state agencies. Along with the workers group CTUL, the Carpenters Union was also instrumental in the prosecution of Batres and another high-profile case against a company called Merit Drywall.

They organize the workers and serve them up to state regulators, even scheduling interviews at the union hall between investigators and workers.

Their motivation is two-fold: stick their fingers in the eyes of contractors that undercut their bids and grow their base of members.

Since beginning organizing workers on the Viking Lakes project, a number of workers have joined the union, earning higher wages, benefits and a pension.

Macario-Alcocer might join the union one day. In the meantime, after weeks without work, he has a job again on a cleaning crew.

He hopes to get the thousands of dollars he’s owed in wages, but for now, he’s grateful he’s now getting paid for the hours he works.

Reporting contributed by Ricardo Lopez, Colleen Connolly and Lori Felipe-Barkin.

Workers on Vikings development claim over $100,000 in wage theft