A new report alleges that significant investments in affordable housing by the D.C. government are being tarnished by “rampant” wage theft and employee misclassification in the construction industry, harming workers, law-abiding businesses, tenants and the District at large.
According to the report, D.C. construction workers who are misclassified as “independent contractors” rather than employees are likely to earn an average of over $15,000 less per year, compared to what they should have earned if properly classified. Misclassification also makes workers ineligible for certain legal protections.
In addition, says the report, such misclassification enables some contractors in the District to reduce their labor costs by more than 16%, helping them to underbid and undercut employers that follow the law.
“Lifting D.C. residents out of housing insecurity, while simultaneously pushing D.C. workers further into poverty, is not the answer.”
– Sarah Bessell, Supervisory Counsel, Washington Lawyers’ Committee
“Lifting D.C. residents out of housing insecurity, while simultaneously pushing D.C. workers further into poverty, is not the answer.”
– Sarah Bessell, Supervisory Counsel, Washington Lawyers’ Committee
Produced by the Washington Lawyers’ Committee for Civil Rights and Urban Affairs, the report — A Rotten Foundation: Wage Theft in the District of Columbia’s Affordable Housing Construction — surveyed wage theft litigation involving D.C. affordable housing unit construction projects over the past decade.
Key findings include:
- The majority of cases implicate public sector or public works construction projects funded by Mayor Muriel Bowser’s Housing Production Trust Fund, which has seen an investment of more than $1.4 billion over the past decade.
- Wage and hour violations have been documented across a range of construction trades in the District.
- Some contractors appear to be repeat offenders, with allegations that they engaged in wage theft across multiple D.C. affordable housing projects.
- Most wage cases are settled, indicating that some contractors may consider enforcement penalties to simply be a cost of doing business.
“Lifting D.C. residents out of housing insecurity, while simultaneously pushing D.C. workers further into poverty, is not the answer,” said Sarah Bessell, Supervisory Counsel at the Washington Lawyers’ Committee. “D.C. agencies should make a concerted, coordinated effort to eradicate wage theft and, in the case of housing-related agencies, prevent repeat offenders from working on the District’s affordable housing projects.”
The report urges the D.C. Council to increase penalties and enforcement for wage theft in the construction industry, and beef up oversight of D.C.-funded affordable housing projects. Specific recommendations include:
- Strengthening D.C.’s wage theft laws to increase penalties for worker misclassification.
- Restricting repeat offenders from working on public projects.
- Prioritizing the use of union contractors when awarding grants and loans for affordable housing projects.
View the full report, including an appendix that details D.C. affordable housing projects with wage theft violations.