The Massachusetts Attorney General’s Office (AGO) has announced a settlement with Avatar Construction Corporation, a Watertown-based firm, along with its owner, Nazar Vincent. This settlement addresses allegations of wage theft involving the underpayment of workers on five municipal construction projects located in Cambridge, Lawrence, Saugus, and Watertown.

As part of the settlement, Avatar Construction has agreed to pay $320,000 to the Commonwealth, which will enable the state to distribute approximately $172,000 in restitution to affected workers.

The AGO’s lawsuit, initiated in March 2023, accused Avatar of using 68 fraudulent payroll documents, created by its subcontractor, Gonza Construction, Inc. of Worcester, to falsely certify compliance with the Massachusetts Prevailing Wage Law. Investigators found that workers on these projects received less than half of their entitled wages. The payroll forms were not only fraudulent but also contained significant errors.

The Massachusetts Prevailing Wage Law mandates minimum wage rates for specific classifications of workers engaged in public construction projects and requires the submission of weekly certified payroll records. Misrepresentation of these records, particularly without ensuring their accuracy, constitutes a violation of the law.

This case follows a similar judgment against BPI Construction Corporation last fall, where the company was ordered to pay nearly $1 million for prevailing wage violations. The AGO highlighted that contractors can be held liable for the actions of their subcontractors, especially if they facilitate wrongdoing through negligence.

The AGO's actions were prompted by a complaint from Plumbers Union Local 12 and stemmed from a collaborative effort between the AGO’s False Claims Division and Fair Labor Division to address ongoing wage theft issues.

Perspective from Construction Owners

For construction company owners, this case underscores the critical importance of compliance with labor laws and the potential consequences of wage theft. The financial repercussions, such as significant settlements and reputational damage, can be substantial. Owners must ensure that all subcontractors adhere strictly to prevailing wage laws to avoid legal repercussions.

Takeaways:

Vigilance in Payroll Practices

‍Construction firms should regularly audit their payroll processes to ensure compliance with prevailing wage laws.

Subcontractor Oversight

‍Owners need to maintain oversight over subcontractors to ensure they are following legal requirements.

Collaboration with Labor Unions

‍Engaging with labor unions can provide insights and support in navigating compliance issues and addressing worker concerns.

Legal Awareness

‍Staying informed about the evolving legal landscape regarding wage laws can help prevent violations and protect against potential lawsuits.