Workers Prevail on Wages at ABIA Hyatt

Six subcontractors stiffed workers out of nearly $240,000

Workers Prevail on Wages at ABIA Hyatt

Thanks to persistence by the electricians' IBEW Union Local 520, dozens of workers who helped build the new ABIA Hyatt Place Hotel at Bergstrom Airport are taking home additional pay that they had earned – but never received. Accord­ing to accounting by the City of Austin Contract Compliance Office, the workers had been stiffed a grand total just shy of $240,000, because at least six subcontractors were not complying with prevailing wage requirements or other wage standards on the construction project, a public-private partnership between the city and the developer, ABIA HP LLC. Some were providing neither direct fringe benefits (e.g., health insurance, retirement) as required under the city's lease agreement, nor "in lieu" payments equivalent to those benefits; others were failing to pay for overtime hours.

When union representatives initially complained to the contract compliance officers about the underpayments, they say they were told that some workers were "apprentices" who didn't qualify for the higher pay – even though the lease agreement does not include that employee classification. In an April letter to Baldemar Maldonado of the city's CCO, IBEW Business Manager Matthew Friest­man wrote that in the absence of an "apprentice" classification, "everyone on the project must be paid at the [prevailing] wage rates" (as established by the U.S. Depart­ment of Labor). Eventually, the city concurred with the union's interpretation, and required contractors to comply.

Two city audits confirmed total underpayments of $239,624, of which over $228,000 has now been paid. About $126,000 was due 44 employees (mostly electricians) employed by two subcontractors who had not been paying the prevailing wage. Another $114,000, primarily for overtime, was due sheet-metal workers, carpenters, plumbers, pipefitters, and others now in the process of receiving payment. A third audit is reviewing records for four additional subcontractors. A city spokesperson said, "We are working to make sure these individuals receive appropriate back pay. Every worker should receive the wages they are entitled to."

According to IBEW Local 520 General Counsel Michael Murphy, this is not the first time that the city has dragged its feet on prevailing wage standards, even though both state law and a subsequent city ordinance provide for those standards on city projects. On the Green Water Treatment Plant project, Murphy said contractors argued that prevailing wages were only required on the "shell" of the project – and the city capitulated. Friestman's letter to Maldonado cites that disagreement as precedent, and complains that in both cases, "City staff bent over backwards to craft an interpretation of the relevant development agreement that allows developers to largely avoid the prevailing wage obligation."

At least in the Hyatt Hotel instance, it appears that solidarity succeeded, and the city and the contractors finally backed down.

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