City of Seattle

Ed Murray, Mayor


SUBJECT:   City investigating allegations of improper payment of wages to construction workers
3/4/2013  10:00:00 AM

City investigating allegations of improper payment of wages to construction workers

Allegations involve City-financed affordable housing projects

SEATTLE - The Seattle Police Department announced today it is conducting an active criminal investigation into allegations of improper payment and treatment of workers at affordable housing construction projects that have received City funding.

"Workers deserve fair and humane treatment on the job and a chance to build a better life for themselves and their families," said Seattle Mayor Mike McGinn. "These are very serious allegations, and the Seattle Police Department will aggressively pursue this investigation."

Based on information obtained by the City's contract analyst, allegations of inadequate payment of wages to workers was uncovered in August and September on two affordable housing projects under construction at that time. This was followed by document verification in October. Since then, additional allegations have been made regarding wages and worker conditions on two additional housing projects, expanding the investigation. While the City provides funding to these housing projects, they are developed, owned and operated by nonprofit housing providers.

Evidence was forwarded to the Seattle Police Department, which has begun a criminal investigation into these allegations. Because this is an active investigation, further details cannot be released at this time.

In 2006 the City was made aware of instances where workers were being improperly classified for the work they were performing, and not properly paid for that classification and the actual number of hours performed. In response, the City worked with labor unions and the Housing Development Consortium to create the Residential Prevailing Wage Rate Policy for all City-financed affordable housing developments. The goal of this policy is to ensure that workers are properly classified and receive prevailing wages for the work they perform. In 2007 the City began monitoring for compliance with that policy, visiting job sites to interview workers, reviewing daily sign-in sheets and certified payrolls, and other records. This monitoring process was responsible for uncovering these recent allegations at City-financed affordable housing projects.

Since the allegations surfaced, the Mayor's Office has been working with the Office of Housing, Department of Finance and Administrative Services, Office of Immigrant and Refugee Affairs, and Seattle Office for Civil Rights to evaluate systems in place for monitoring and compliance. The Mayor's Office has also brought to the table nonprofit affordable housing developers, trade unions and stakeholders to solicit their feedback. At the conclusion of the first round of discussions, stakeholders agreed to convene their members to develop ideas on how to address these issues in new ways. They will work collaboratively with the City to explore improvements to our compliance and monitoring requirements to help detect and prevent worker exploitation.

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