FAIRFIELD — The red notices posted on the chain-link fence in front of the new $17 million clubhouse at 1118 Cross Highway are stop-work orders issued for the violation of state labor laws.
But for the New England Regional Council of Carpenters and the state, these modern-day scarlet letters represent more: a betrayal of honest work and fellow taxpayers.
The five letters were issued to the project for misclassifying employees as independent contractors on its project for the Patterson Club, a private country club.
According to Resa Spaziani, supervisor of the state Labor Department’s Stop Work Unit, the workers in this case were functioning as employees, but the company wasn’t paying them like employees.
There are advantages to doing this, she said, though they are illegal.
A company misclassifying employees can cut its costs by 30 percent, she said. Contractors also land in trouble because they sometimes list construction workers as office employees, which lowers their costs for workman’s compensation insurance, Spaziani said.
There is also a concern that the misclassified workers are being taken advantage of, she said. That’s especially true in this environment, in which the construction industry has lost nearly 20 percent of the jobs it had a year ago, leaving many workers desperate.
The cost goes far beyond the work on the jobs such as the Patterson Club, which has reported that the project is still on schedule to open early next year.
“It’s a concern to a lot of different departments,” Spaziani said. The red letters represent the loss of tax dollars; increased risk to the state’s workers’ compensation fund, which would have to pick up the bills if one of these workers got hurt on the job; and added stress to the social safety net because unemployment insurance is not paid for these workers.
Misclassified independent contractors don’t pay into unemployment insurance and aren’t eligible, so when they’re thrown out of work for long periods of time, they might have to turn to the churches and other food pantries for help.
Since the law allowing the department to review work sites and issue Stop Work Orders went into effect in 2007, the state has issued more than 300.
But Spaziani noted the department issued only two orders in 2007, so the remaining have all come in 2008 and 2009.
The Patterson has actually had very few problems, according to the Labor Department.
“It’s a very small site, compared to other sites we’ve done,” she said. “We’ve been on sites where, when we left, no body was left working. Milford, we had a site like that. People jumped over the fence.”
The violations cost the contractor $300 a letter, and work cannot resume on the project until the issue is corrected, she said. But it doesn’t mean the whole job is shut down. It’s just the work that the misclassified or underinsured employees were doing that can’t continue, she said.
Ted Duarte, an organizer for the carpenters union and a resident of Wolcott, has been protesting at the site on and off since the Stop Work orders were issued. He and a contingent of carpenters stationed themselves outside the club with a giant rat holding a golf club to express their disdain.
“We only got four middle fingers,” Duarte said of the passing motorists on Cross Highway. Most people have waved in support of the union, he said.
Duarte said the carpenters are concerned whenever these red letters pop up because it could mean a legitimate firm that’s following the rules, union or no union, was frozen out of the bidding.
Bob Kravitz, owner of Whitehawk Construction Services LLC, of Canton, said he bid to do the millwork installation at the Patterson Club, but didn’t get the job.
And it was the millwork installers who were cited by the state at the Patterson Club.
“I bid on a number of packages,” Kravitz said of his attempt to win the work. He said the selection process included showing the potential client the jobs he’s done at Yale University.
“But then the trail went cold,” he said. And the job went to someone else.
Kravitz said this is not the first time it’s happened. He’s lost jobs before to nonunion shops. Sometimes he ends up with the work anyway, he said, because the job gets botched. But, he said, it’s never as big a job as it would have been if he’d gotten the project in the first place.
The exact name of the company that hired the workers illegally is unclear. The stop-work notices on the job cite only the workers who were misclassified.
Duarte and Kravitz said that’s one of the problems they have with stop-work orders. Some companies escape. Instead of correcting the problem, the companies who hired the workers will just go out and hire new people to finish the job, according to Duarte.
Kravitz said it’s gotten to the point where he’s not bidding on nonunion jobs because he can’t compete.
He said the only way to really make the law stick and level the playing field is to start citing the general contractor on the jobs.
AP Construction is the general contractor on the site, but did not return a call for comment.
