Here’s another potential way to assess the changing state of the economy: track the complaints streaming into the Connecticut Department of Labor’s Division of Wage and Workplace Standards. The overall number now hovers around 4,000 complaints per year, down from a high of 5,000 five years ago.
And the types of issues also are somewhat telling.
“Right now we get a lot of complaints about hostile work environments, which we can’t do anything about,” said division director Gary Pechie, who has been with the department 36 years. “Employers have the upper hand now because they know there’s a big pool of workers out there. If an employee doesn’t like something, they can find somebody else to do the job.”
An increasing number of employers also are trying to save money by claiming that workers are independent contractors rather than employees.
“For example, a drywall company can’t have 50 people putting up drywall and call them independent contractors,” Pechie said. “They’re really employees, but the company is trying to avoid paying payroll taxes, unemployment taxes and workers compensation. We fan out across a job site and interview workers, getting basic information like their name, who they work for, how they’re paid and whether they have a Social Security number. Then we run the name of the company through a database to find out if they have workers compensation insurance.”
If they discover companies that should have insurance but don’t, inspectors can shut the worksite down. “It can get pretty dicey because some of these places are in bad parts of town and people run away from you,” Pechie said.
The bulk of the division’s investigations involve wage issues, including employers not paying overtime, minimum wage, vacation time, commissions, or fringe benefits. Statutes require that employers maintain basic payroll records, which investigators have a right to inspect at any time during normal business hours.
Employers who violate the law face financial penalties, or in some cases even criminal prosecution.
“Normally we don’t have anyone arrested unless they flat out refuse to pay or won’t cooperate, but we do issue about 40 arrest warrants a year,” Pechie said. Inspectors can also ask the state Attorney General to file suit and shut a company down until it comes into compliance.
Owners of legitimate businesses typically are cooperative when an inspector makes an inquiry “because they know that if they make a good faith effort to comply with the law, we’ll work with them,” Pechie said. “We certainly don’t try to punish employers, and there’s no better feeling than helping an employer navigate through a difficult situation.”
