MANCHESTER, N.H. – A city dry-wall contractor was sentenced to 18 months in federal prison and ordered to pay the Internal Revenue Service more than $780,000 for his role in an under-the-table payroll scheme.

Cruz E. Galvan, 39, who operated Four Star Drywall, was ordered to pay the IRS restitution totalling $786,553. Authorities said he had paid $100,000 of that amount several weeks before being sentenced Tuesday in U.S. District Court.

According to U.S. Attorney Emily Gray Rice, Galvan pleaded guilty to one count of federal employment tax evasion, admitting to a scheme to dodge payment of federal employment taxes on wages he paid to his employees.

During his plea hearing, Galvan admitted that from April 2010 until December 2012 he paid employees with vouchers instead of with checks. The employees were then instructed to present the vouchers to a local check-cashing business to which Galvan had previously provided funds with instructions to pay the vouchers in cash.

He acknowledged he did not report the wages he paid to the IRS, evading federal income tax withholding and Social Security, Medicare and federal unemployment taxes.

Immigration proceedings are underway to deport Galvan, who authorities say is in the country illegally, after he serves his sentence.

City police, the IRS, the U.S. Department of Homeland Security and the U.S. Department of Labor, Office of Inspector General, investigated the case, which was prosecuted by Assistant U.S. Attorney Bill Morse.

Source: Union Leader

In preparation for the upcoming holiday, Local 200 of the Indiana/Kentucky/Ohio Regional Council of Carpenters (IKORCC) volunteered to assist in the assembly of Valentine’s Day care packages for military members.

Earlier this year, Brenda Bishop Young of Buckeye Military Families reached out to Local 200 regarding its third annual Operation Sharing Hearts project. The project focuses on assembling and sending 50 Valentine’s-themed care packages to service members who are deployed and stationed overseas.

In addition to presenting Buckeye Military Families with a $500 donation, five Local 200 members and their families were more than happy to assist with Operation Sharing Hearts and dedicated a Saturday and a total of 20 volunteer hours to the project. Assembled at the Local 200 office, eachcare package contained Valentine’s Day cards, candy, batteries, sports and auto magazines, toiletries and small Valentine’s Day cakes.

“I have to thank Local 200 for the use of their office – the facility was perfect for our event,” commented Bishop Young. “The help we received from their members was so awesome! They jumped in and made us feel right at home. I know this is a long-standing relationship we can look forward to in years to come.”

Michael Freeman, IKORCC Representative and Local 200 Recording Secretary and Political Advisor, commented, “We have four veterans in our Columbus office. Having served in the military, it makes me so proud to be involved with an organization that truly cares about our nation’s heroes – veterans and active duty alike. Being stationed away from family and friends can be very tough, and we know how much a small gesture like these care packages will be appreciated. They’re also a small token of our appreciation for everything our military does for our country.”

Buckeye Military Families is the Ohio chapter of Semper-Fi Sisters, which consists of individuals with a loved one who served or is currently serving in the military. Their mission is to support the families of those currently serving, the service member themselves and Ohio veterans.

One of the primary schemes of corrupt contractors is using subcontractors and labor brokers that pay employees off-the-books or as 1099 subcontractors to evade paying employment taxes, workers’ compensation premiums, overtime and wages. When faced with law enforcement, corrupt contractors use that subcontract relationship as a shield against accountability. But when looked at closely, the contractor often times acts like an employer of the workers just as much as the subcontractors or labor brokers. It is a growing trend and construction is not the only industry facing the problem.

In response, the US Department of Labor issued an Administrative Interpretation (AI) of joint employment under the Fair Labor Standards Act (FLSA). Joint employment under the FLSA makes the contractor and subcontractor or labor broker separately and jointly liable for unpaid wages and overtime if the contractor is also acting as an employer of the workforce. The AI does not change the law, it provided guidance on existing law and gives notice to employers that the USDOL will use joint-employment findings more often.

Dr. David Weil, Administrator of the USDOL Wage & Hour Divisions wrote, “As the workplace continues to fissure, and as the employment relationships continue to become more tenuous and murky, we will continue to identify where joint employment applies and hold all employers responsible.”

In a press release supporting the USDOL’s action, General President Doug McCarron said, “This action by the Labor Department lets cheating contractors know that they can’t continue to hide behind their labor broker subcontracts.”

Initially, many of unions were taken by surprise by the non-union sector’s developing economic clout. In the absence of a comprehensive counter-strategy, a number of locals and district councils adopted wage concessions in order to stay competitive with the non-union sector. Non-union employers effectively undercut that tactic by simply driving their own pay rates down further. At the same time, the ABC grew in political sophistication and became one of the linchpins of the “New Right” that propelled Ronald Reagan to the presidency in 1980.

“Our organization was set up to deal with the industry as it was in post-World War II North America,” said UBC General President Doug McCarron when he was elected in 1995. “But the industry has changed drastically since then, and we must change with it.”
Since his election, McCarron has reorganized the Brotherhood’s priorities and its structure. He set organizing as the union’s number one priority and has redirected its resources to get that job done. The union’s localized and often politically-motivated structure has also been restructured and streamlined to reflect today’s regional and national construction industry, as well as to ensure that union leaders are more accountable to members for the job they do.

The ultimate goal of these structural changes is to organize and reorganize every carpenter and contractor in North America and set the standard for wages, benefits, and working conditions on every jobsite. It is an ambitious goal, and one that will take a long-term effort to complete. But it can be done through organizing.

The UBC faces a complex and challenging future. New tools and materials and new methods of construction are entering the industry at an accelerated rate. In many ways, the carpenter of the 1990s is no different from the carpenter of the 1880s. But all indications are that the dawn of the 21st century will bring much more rapid technological innovation. Increasingly, the on-site carpenter is more an “installer” than a “fabricator” with the development of prefabricated materials, modular components, and panellized building sections. The multi-faceted general contractor is giving way to the construction manager whose subcontractors expect their carpenters to restrict their skills to more highly specialized tasks, such as concrete forms, framing, drywall, ceilings, finish work, etc. Union apprenticeship and journeyman-enhancement training programs have addressed these new developments while at the same time maintained a high level of all-around craft competence that union journeymen will always need.

Ultimately, maintaining and extending a strong union for carpenters will depend on combining an awareness of the dynamics of the future with the finest traditions of the past. The days of “country club” unionism that provided job security to members by keeping membership numbers down and the unorganized out are over. The UBC’s growth in the future rests on its ability to reach out and open its doors to all working carpenters.

Just as Peter J. McGuire built the Carpenters Union in the 19th century by organizing all carpenters, today’s leaders must rebuild this union in the 21st century in much the same way. They must embody that same spirit of inclusion in order to organize the unorganized and mobilize current union members to talk to their non-union brothers.

In 1882, W.F. Eberhardt of Philadelphia’s UBC Local 8 (which remains strong to this day), wrote a letter to the Carpenter. He outlined the efforts of his local’s members to contact every single carpenter in the city on a ward-by-ward basis. He described how those pioneering volunteer carpenter-organizers held regular meetings across the city to bring the unorganized carpenters into the new union. Today, more than 116 years later, the Brotherhood is using a “new” model much like the outlined by Eberhardt. Every district, council, and local in the union currently boasts an active volunteer organizing committee that uses today’s modern techniques and technologies, as well as old-fashioned one-on-one contact, to spread the still-relevant message of unionism to every non-union carpenter in their area. The American workforce may look different today–more multi-cultural, multi-racial, and multi-lingual. But the underlying principle of organizing all the men and women who make their living at the carpentry trade is exactly the same as it was in 1881, when 36 carpenters met in Chicago to improve their lives, their futures, and their trade.

Photo source: FreeImages.comGeorgeBosela

Jon Bel Edwards was elected Governor of Louisiana. He appointed Executive Secretary-Treasurer Jason Engels to his economic development transition team. The team will make recommendations on job training and workforce development. Recently, Jason appeared on New Orleans News 8 in a three-part series exposing payroll fraud in the Louisiana construction industry.