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Rochester wage theft case poses test for new state law

July 8, 2019

ROCHESTER, Minn. (AP) — A group of Rochester-area construction workers are pursuing a wage theft claim, testing a new state law that aims to clamp down on companies that don’t pay for labor.

Minnesota Department of Labor and Industry officials said the law, which went into effect July 1, doubles the number of state investigators probing wage theft cases, which will increase site examinations.

Six workers allege Ed Lunn Construction duped them out of thousands of dollars in wages after working the majority of 2018 on a $40 million, city-funded affordable housing project in Rochester that’s now filling with residents, the Star Tribune reported.

Their complaint, aided by the Minneapolis workers’ rights group Centro de Trabajadores Unidos en la Lucha (CTUL), stemmed from their work on the 208-unit River Glen Apartments.

Lunn denies any culpability, contending a subcontractor that employed the men took the wages and fled the state.

“It is confusing to Ed Lunn Construction why it is being singled out by CTUL primarily when there was no contractual relationship with any of the above entities or individuals,” Lunn’s attorney, Adam Houck, wrote in an e-mail.

Lunn contended he has not only offered settlements, but he was also willing to mediate or arbitrate the pay disputes. So far, just one of the groups has agreed to a settlement, Houck noted.

Under the new law, the inspectors will likely prioritize industries most known for producing the wage theft claims, such as restaurants, low-wage work or construction. Claims typically occur when companies don’t pay overtime, pay below the minimum wage, subtract wages for short breaks or damage to property, or misclassify workers as independent contractors.

State officials said an estimated $11.9 million is kept from 39,000 Minnesota workers every year.

Rochester City Council Member Shaun Palmer, who worked 40 years in the construction industry and now represents the area where the River Glen project is situated, said figuring out the employer-employee relationships within a construction site is infamously challenging work.

Despite its regularity, wage theft allegations often get ignored. The River Glen workers failed to get the attention of Palmer, even after staging a public protest in downtown Rochester in May.

Palmer said he knows people who worked on the River Glen development, including Lunn, but he’s “literally never heard of one” instance of wage theft in the construction industry.

“I can’t believe that on a commercial site like this that somebody could get away with that,” he said.

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Information from: Star Tribune, http://www.startribune.com

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