Wage-theft investigator: Stop-work orders need to be easier to issue

The lead Wisconsin misclassification investigator says he’d like more authority to issue stop-work orders when officials find evidence that wage theft, payroll fraud and other abuses are taking place at a job site.

Mike Myszewski, the Wisconsin Department of Workforce Development section chief on worker classification, said the state procedure that allows investigators to issue stop-work orders in wage-theft investigations is too often “cumbersome.”

In fact, the department has yet to issue a stop work order as a result of a wage-theft investigation, Myszewski said.

Myszewski comments came during a meeting of the state’s task force on worker misclassification held in Oak Creek on Wednesday. The group began meeting monthly in August at the behest of an executive order issued by Gov. Tony Evers earlier this year. It now has until March to recommend ways to combat wage theft and other forms of abuses that deprive workers of wages and benefits and the state of tax revenue. Worker misclassification is thought to be rampant in the construction industry.

It’s not the state’s first time to try putting a stop to these sorts of abuses. In 2009, a similar task force issued recommendations that eventually gave rise to the state’s current efforts.

On Wednesday, the state task force heard from Patricia Smith, senior counsel for the National Employment Law Project. Smith had previously served as chief of New York’s Labor Bureau, leading efforts to crack down on misclassification there. She recommended that states share information between agencies, conduct public-information campaigns and pursue criminal charges against those who misclassify workers.

“Once this practice gains a foothold in the industry it begins to become a race to the bottom,” Smith said.

New York, she said, also has the ability to shut down a job site when investigators find evidence of wage theft.

Wisconsin investigators have that power, too, but the procedure is not straightforward, Myszewski said. Before a job site can be shut down, officials must first give contractors warning 24 hours in advance. That step by itself “usually gets compliance,” Myszewski said, but it also allows companies with misclassified workers to cover up abuses before they can be caught.

And if Wisconsin investigators were to issue a stop-work order, the affected contractors could immediately file an appeal by fax or email and keep working until a hearing were held before an administrative law judge, he said.

“In reality, it’s a very cumbersome process to use,” Myszewski said. “Ideally, from an enforcement standpoint, what I would like to see is a process where we could issue a stop work order on the work site when we encounter resistance or non-cooperation.”

Tim DeMinter — a task-force member and representative of the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers Local 383 — said making it easier to issue stop-work orders would help.

“If you have teeth you could maybe do something,” he said.