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PA Construction Company to Pay $20.7 Million to Settle Criminal Charges for Violating Prevailing Wage Laws

by | Aug 6, 2021 | Wage And Hour Claims

Harrisburg, PA – Edelson Lechtzin LLP attorneys are co-counsel for plaintiffs in a class-action lawsuit against Glenn O. Hawbaker, Inc. (“Hawbaker”), a construction firm based in Centre County, Pennsylvania, alleging violations of Pennsylvania’s Prevailing Wage Act (“PWA”).

The Criminal Case Against Hawbaker

On August 3, 2021, Hawbaker entered a plea of “no contest” to charges that it improperly diverted funds for fringe benefit programs for their prevailing wage workers. Hawbaker was sentenced to pay a combined $20.7 million to 1,267 harmed employees.

Pennsylvania Attorney General Josh Shapiro criminally charged Hawbaker with four counts of theft by failure to make required deposits of funds following a three-year investigation into allegations that the company had stolen millions of dollars of fringe benefits payments from its workers in violation of the PWA and the federal Davis Bacon Act.

Attorney General Shapiro said that the company had engaged in a “massive, unprecedented fraud” and that its workers “had their retirements stolen from them” to enrich company executives. According to AG Shapiro, this is the largest prevailing wage case in the nation’s history.

Prevailing wage laws are supposed to ensure that all companies working on state-funded construction projects pay their workers equivalent wages. (A detailed explanation of prevailing wage laws can be found here.) The criminal charges against Hawbaker assert that the company ripped off its employees by misallocating funds intended for prevailing wage health and retirement benefits and, instead, deposited the money in other company accounts. These practices allowed defendants to offer anti-competitive pricing in their bids for state-funded construction projects. As a result, they diminished the size of their employees’ retirement savings.

The Class Action on Behalf of Hawbaker Employees

The class action also alleges that Hawbaker stole millions from employees by misrepresenting wages and costs associated with public works projects to “both its workers and public works contracting authorities.”

In prevailing wage projects funded by the government, part of employees’ wages can be paid through fringe benefits like health insurance. The lawsuit claims that Hawbaker failed to sufficiently fund these benefits, which caused the company to underpay their prevailing wage workers by not meeting contract requirements.

Hawbaker promised their employees – and represented to public officials – that they were fulfilling prevailing wage requirements through these fringe benefits programs. But in actuality, they were contributing much less. They misallocated the earned and promised funds to other parts of the company.

These practices violate the PWA as the true value of the wages paid by Hawbaker were far less than the amounts the company owed its employees. The lawsuit seeks to recover unpaid wages and penalties for the hardworking employees, who had their pay and benefits stolen by Hawbaker.

The case is James C. King v. Glenn O. Hawbaker, Inc., Civil Action No 2021-957 (Centre County Court of Common Pleas).

Can Hawbaker Employees Join the Class Action?

Knowing your rights as an employee is essential to ensuring that your employer is not violating protections given to you under federal and state law.

Contact the attorneys at Edelson Lechtzin LLP for a free consultation at 844-895-4899 (toll-free) or email us at [email protected]. You can also fill out the form on this page.

Do I Have to Pay Attorney’s Fees?

No. Attorneys typically handle wage and hour claims on a contingent fee basis. This means that the lawyers don’t get paid fees unless they get a money for you.

Edelson Lechtzin LLP is a national class action law firm with offices in Pennsylvania and California. In addition to cases involving wage theft, our lawyers focus on class and collective litigation in cases alleging violations of the federal antitrust laws, securities fraud, retirement plans, consumer fraud, and dangerous and defective drugs.