Labor finally has a Kansas City Council that is listening to them. After recently passing an ordinance that would add prevailing wage to all incentivized projects, several council members, the Mayor and the City Manager attended a forum hosted by organized labor, Minority Contractors Association and the KC Hispanic Association Contractors Enterprise as well as union and non-union contractors, to expose the “Labor Brokers” who are exploiting undocumented workers on many of Kansas Cities job sites where tax payer dollars are being invested.

The forum, held at the Mohart Center on Linwood and 31st street, included several undocumented workers who voiced they had been exploited by one particular broker who runs a company called Decal. Victims told members of the City Council, Mayor and City Manager how they were hired as 1099’s or were even helped to fill out paperwork so that they could set up LLCs and act as subcontractors on these jobs. The undocumented workers explained they were told when they submitted their invoices that they would only get 10 to 20% of the money they were owed, and only if they went to another job and started whatever scope of work they were asked to do.

Shawn Delgado with IUPAT DC 3 facilitated the meeting.

The contractor in question, Decal Construction, was certified by the City as a minority contractor (MBE) so contractors could turn a blind eye to their abuses as long as their bids were low enough. Of course, when challenged as to how they let this predator contractor abuse his workforce, they are quick to tell you that the City certified them so that is on the city. And they are right. How could Kansas City let a company like this remain certified? They have no work-force, a criteria for certification. They have to be able to self-perform their own work. The company was certified by the City in 13 different scopes of work and didn’t have one employee.

MAJOR CONTRACTORS USING “LABOR BROKERS” TO LOWER PROJECT COSTS

Decal has been awarded contracts with several PIEA projects (Planned Industrial Expansion Authority is a state agency that abates or redirects Kansas City taxes for projects in Kansas City, MO) including 1901 Oak for approximately $4 million dollars and 27th Troost for $2 million dollars. Both of these are run by Millhouse, an out of town developer. They also have an $800,000 contract with Centric on a PIEA project located at 64th Paseo as well as a Centric project called Armour Corners where he has a $750,000 contract on a PIEA project. In addition, they have a $2 million dollar contract with Uptown Lofts at 36th Broadway and a $2.5 million dollar contract with the Yards Apartments. Both are PIEA projects. Just this small sampling shows he has contracts that equal nearly $12 million dollars.

Kevin O’Neill, Kansas City, MO City Councilman 1st District At Large, has been visiting incentivized job sites through his many years as publisher of the Labor Beacon and now that he is on the Kansas City Council he is pressuring city officials to crack down on “Labor Brokers” who have been breeding like cockroaches within the construction industry for years. “They prey on the vulnerable and count on the fact that these hard working men and women who have no voice, no grievance procedure and no representation, will say nothing about the money they are owed. And they were right, up until now.”

During the forum we learned that the “Labor Brokers,” and there are many- not just one, pay many of these workers by cash. And another way they prey on these workers is paying them by check and since many of the workers have no bank account and little ID, they are sent to a Pay-Day Loan to cash their checks. In many cases the “Labor Brokers” own the Pay-Day Loan, and when they come to cash their checks they are told the cost to cash the check could be as much as 50 to 70% of their pay. They are left with no other option. In one case a worker who quit, found out after he left, the “Labor Broker” used his social security number to make thousands of dollars of payroll payments. That young man now owes the IRS over $100,000. Others who performed work with their own crews are owed hundreds of thousands of dollars that the company refuses to pay.

“I feel terrible for these guys who have worked so hard and yet are owed so much money and will in all probability never see much of it, if any. They are so angry and so badly want to end this treatment that they came to the forum to have their voice heard in spite of repercussions they and their families could face. They want their message heard” O’Neill stated. “But I can tell these guys to their face that people are listening. And these people can definitely make change if they want to. I for one, will introduce a wage theft bill very soon that will hold these contractors accountable who use these kind of “Labor Brokers.” And the punishment will be severe and expensive.” O’Neill added, “I certainly intend to force changes in the Human Resource Departments certification process. We cannot certify companies like these. And HRD needs to have a higher priority of enforcing our rules and regulations and that starts by getting on these job sites and asking the right questions. Since we have enacted a prevailing wage directive, it should be easier for HRD to request payroll documents and other critical information.”

 Members of the City Council, Mayor and City Manager attended and listened to the alleged abuses of the sub-contractor who is certified by the city’s HRD Department. The meeting shed light on the shady practices by “Labor Brokers” on many of the city projects which were awarded tax breaks by the numerous city incentive agencies.

“I would say lastly, the city is losing millions in taxes that should be coming by way of earnings taxes on these wages. We are losing a substantial amount of revenue to the fraud taking place. We need to stop that now.” O’Neill concluded.

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