Boise's Building Materials Holding Corp. denies wage fraud charges

Pablo Nunez, a carpenter by trade, says he is accustomed to working 10-hour shifts, sometimes six days a week, on home-building sites throughout Southern California. But legally mandated overtime pay was almost as unheard of at job sites, he says, as visits from labor inspectors.

"The only person getting overtime might be the brother of the foreman," Nunez said.

The Corona resident is among 85 residential construction workers from California, Nevada and Arizona who will share $242,301 in unpaid wages after settling a federal lawsuit in September against a major construction subcontractor, Building Materials Holding Corp. of Boise. The settlement was reported last week.

The lawsuit, brought with the help of the Laborers' International Union of North America, alleged that the company and its subsidiaries systematically failed to pay employees for hours worked, did not provide overtime pay or breaks, and kept workers off the clock while they traveled between job sites and waited for materials to arrive.

In June, BMHC filed for bankruptcy.

Industry officials call wage theft an aberration.

"It is essential that builders and subcontractors take care of their employees and follow employment and labor laws," said Julie Senter, a spokeswoman for the Building Industry Association of Southern California. "And we're confident the vast majority of the industry does just that."

But advocates say the case illustrates how wage fraud is pervasive in the home-building industry, which relies heavily on immigrant labor, often hired through subcontractors. What is unusual in this case, they say, is that the workers found a legal recourse. Most victimized laborers don't have the know-how to sue, experts say.

A recent study surveyed more than 4,000 low-wage workers in Los Angeles, New York and Chicago and found that employees in home construction and other industries are routinely victims of wage theft. In one finding, the study, by scholars from the University of California, Los Angeles, the City University of New York and other institutions, said that 76 percent of eligible workers surveyed were not paid the overtime mandated in federal law.

Government enforcement of wage guidelines has been ineffective, the study found. The number of federal inspectors enforcing minimum wage and overtime laws declined by almost one-third between 1980 and 2007, researchers said, while the nation's labor force grew by more than half.

Wage theft was the norm in the home-construction industry even during the housing boom years, according to labor activists. But the practice worsened as home sales ebbed. As the bottom fell out of the market, many workers endured slashed hours and pay cuts as a prelude to unemployment.

"It wasn't just the homeowners affected by all this; it was also these workers who were building the homes and creating wealth for others," said David Zacarias, organizing director for the Laborers' International Union of North America.

The union, which is attempting to organize the largely nonunion home-construction industry, says it has a half-million members.

Jose Ivan Carpio, who is among the plaintiffs in the lawsuit, said he worked three years for a BMHC subsidiary building condominiums in Orange County, earning as much as $14 an hour. Like others, he never received overtime, although he regularly put in 10 or more hours a day, often working Saturdays.

Carpio said that as the industry slumped, his pay was slashed to $10 an hour and his hours cut. He was recently laid off and is working irregularly, living on savings and unable to send money back to his wife and two children in Mexico.

"We helped this company make a lot of money," said Carpio, 29, "but we saw very little of it."