Skilled Construction Trades and Respected Contractors
Building Wisconsin Together ®

Welcome to Construction Business Group's Industry Updates. This monthly e-newsletter will help us communicate the important initiatives that we have underway and relevant updates on issues that impact Wisconsin's construction industry.  

Message from Executive Director Robb Kahl


The Cautionary Tale of Rooftop Solar

By now most of us have been approached about putting solar panels on our home or have seen our neighbors pursue this option. Be aware that unlike your regulated public utility energy provider, these rooftop solar providers face far less regulation and oversight. Unlike a regulated public utility, any unwitting consumer or employee left high and dry by a rooftop solar company will likely find themselves with little opportunity for recourse. Take for example Sun Badger Solar of Waukesha. State and federal workplace regulators are working to collect back wages owed to dozens of former employees of Sun Badger and are dealing with hundreds of consumer complaints for work paid for and unfinished after the company went out of business in March.


In July the U.S. Department of Labor filed a civil lawsuit against the company seeking payment of nearly $350,000 in unpaid wages owed to 95 former employees in Wisconsin, Minnesota and Illinois. Separately, the Wisconsin Department of Workforce Development is seeking $430,000, including wages, accrued paid time off and other compensation against the company. Whether the employees will be paid will be determined by the result of an auction in August of Sun Badger's remaining assets.


Just a year ago, Sun Badger was a well-regarded company with a stellar Better Business Bureau rating. By January 2023, employees were told by letter that they were furloughed through mid-March to allow the company time to get its finances in order. They were never called back to work, and the company largely stopped communicating with its employees and customers.


Even as it struggled, Sun Badger continued to sign up new customers, dozens of whom made down payments of $10,000 or more for work that was never done. By early May, the State Department of Agriculture, Trade and Consumer Protection had received 149 complaints about the company, most of them from customers who complained they paid deposits of $10,000 or more for work that was incomplete or, often, never started. Combined, those customers are seeking repayment of nearly $3 million, according to state records.


To add to Sun Badger’s legal troubles, the Wisconsin Department of Revenue filed a tax lien in February seeking a little more than $98,000 in taxes and interest.


According to the Auctioneer directing the sale of the company’s assets, liquidation of Sun Badger's assets is highly unlikely to cover the claims of its employees, customers, and government agencies.

Building Wisconsin Together®

Fall Externship Days - November 13-15

In coordination with National Apprenticeship Week, Local 139's Training Center is once again hosting Externship Days on November 13-15 from 9am-2pm each day. Pre-registration is required. This is an ideal opportunity for high school students, educators and parents to learn more about apprenticeship and the Operating Engineer career path.


The day includes:

  • Tour of the training center
  • Practice on the equipment simulators
  • Hands-on exploration with the mini-excavators
  • Overview of Destinations Career Academy Pre-Apprenticeship, Youth Apprenticeship and Registered Apprentice
  • Practical advice and insight from contractors


We encourage you to share the registration link with students, parents and educators that would benefit from this exploration opportunity: Register for Local 139 Fall 2023 Externship

Contractors interested in participating in the fall event should contact Laura Cataldo for more information.

Industry News

ARTBA report: Industry adds 19,000 more jobs, many more employees still needed

Highway and bridge builders across the country added nearly 20,000 more jobs in April 2023 compared to the previous year, but need even more skilled workers to meet project demands.

 

That’s the latest from the American Road and Transportation Builders Association’s (ARTBA) Chief Economist Dr. Alison Black.

 

Black wrote this week that the 19,300 additional new employees accounted for about 10% of all new jobs in the construction industry as a whole.


“One sign of the higher demand for workers is the amount of time existing employees spend on the jobsite,” Black said in her ARTBA article. 

Highway and bridge contractor employees worked an average of 43.7 hours per week in April, compared to 41.6 hours in April 2022. This additional 2.1 hours is twice as much time as put in by general construction workers (+1 hour) and private sector employees overall (+.09 hours), according to Black’s report.

 

“These industries are expected to continue to add jobs in the next few months as highway and bridge construction work continues to grow,” Black concluded.



Full Article

Michigan House approves work zone speed cameras; concept still prohibited in Wisconsin

One of Wisconsin’s neighbors is a step closer to potentially creating safer work zones.

 

Late last month, the Michigan House of Representatives approved a pair of bills which would allow the state to use automated traffic enforcement cameras in work zones. The measures passed with 61% support.

 

State police would be allowed to install and use radar and cameras to catch vehicles going 10 or more miles-per-hour over the posted speed limit.


A first offense would produce just a written warning, but a second offense could cost drivers up to $150. Third offenses (and beyond) would cost up to $300. 

 

Tickets go to whoever registered the car, but owners can file an affidavit if they were not driving at the time.


The bills would require police to provide a clear picture of the license plate stamped with a location, date, and time. Police would also have to place a sign one mile from the start of a work zone where cameras would be used.

 

At least 12 other states allow such cameras either statewide or specifically in work zones, including Illinois and Indiana. Wisconsin law currently prohibits their use.

 

Michigan’s bill still needs approval from the state Senate and governor.



Framing contractor charged with insurance fraud

By Brian Johnson

BridgeTower Media Newswires

 

A Minnesota framing contractor has been charged in Hennepin County District Court with workers’ compensation fraud, one of a dozen such cases referred to the Minnesota Department of Commerce so far this year.


Jose Merino, owner of JMC Framing LLC and JMC Contracting LLC of Inver Grove Heights, faces two counts of theft by swindle stemming from a Minnesota Department of Commerce investigation that began in March 2019.


From 2017 to 2019, Merino allegedly “engaged in a scheme to evade workers’ compensation insurance premiums” and made “multiple misrepresentations in his applications for workers’ compensation insurance,” the investigation revealed, according to court documents.


Those actions allegedly allowed the defendant to “obtain coverage for which he would not otherwise have qualified, coverage that did not sufficiently cover potential risk due to the nature of his business, and pay significantly reduced premiums,” according to the court filing.


Merino couldn’t be reached for comment.

 

Mo Schriner, communications director for the Minnesota Department of Commerce, said the Commerce Fraud Bureau received 29 workers’ compensation/premium evasion referrals in 2022 and has fielded 12 so far in 2023.


Historically, the Commerce Fraud Bureau has had the authority to conduct investigations into workers’ compensation fraud, such as the Merino case, if there was a “nexus to insurance fraud,” Schriner said in an email.


“These types of cases are most readily identified when contractors fail to disclose the true number of their employees to their insurance company, thus evading workers’ compensation insurance premiums,” he added.


Last year, the Minnesota Legislature authorized the department to open investigations “when there is an allegation of wage theft, regardless of whether insurance fraud is purported to have been committed,” Schriner noted.


In Merino’s case, according to the court filing:

 


  • At least six workers were injured on the job while working for Merino on various jobsites throughout the Twin Cities. The workers reported their injuries to Merino, but the defendant didn’t report the injuries to his workers’ compensation insurance policy.


  • Between July 6, 2018, and Feb. 26, 2019, the defendant concealed more than $3 million in payroll to two different insurance companies, which resulted in more than $340,000 in unpaid premiums due to the companies.

 

Two years ago, workers filed a class action lawsuit against Merino. The lawsuit alleges that Merino failed to pay overtime wages to workers who put in 50 to 60 hours a week while working for the defendant on a large apartment project in the Twin Cities.


As co-director of the Centro de Trabajodores Unidos en Lucha (CTUL), a Minneapolis-based worker advocacy group, Merle Payne tracks wage theft-related cases in the Twin Cities.


In the past three and a half years, Payne said, the Twin Cities has seen at least nine cases where “construction labor brokers have been charged criminally for labor trafficking, sexual assault, wage theft, theft by swindle, and more.”


Speaking in general terms, Payne said labor brokers often misclassify workers as independent contractors or pay them in cash in order to avoid paying workers’ compensation.



Payne said he’s pleased to see workers’ compensation cases moving forward, but “the part that feels a bit frustrating is that the human consequences of this are not a piece of [the criminal investigation]. It’s much more about, ‘How is the insurance company being screwed over?’”



Construction Business Group | 608-240-4170 | www.cbgwi.com
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