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Plea reached in first-ever common construction wage prosecution

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The Marion County Prosecutor’s Office has reached a plea agreement in a common construction wage violation involving an Indianapolis contractor, believed to be the first prosecution of this kind in Indiana.

White River Mechanical Inc. worked as a subcontractor on two Indianapolis Public School projects. A grand jury investigation in March 2011 showed that several employees of White River Mechanical were underpaid for work on the public school projects. The company incorrectly listed skill levels and pay rates on company payroll records and misrepresented the status of employees on required reporting to IPS.  

What used to be known as the prevailing wage law, Indiana Code 5-16-7, the Common Construction Wage Act requires any entity awarded a contract for public work – and any subcontractor of the construction – to pay no less than the predetermined common wage rate as set by a committee in each county. Employees are divided into three classes – unskilled, semi-skilled, and skilled.  A contractor or subcontractor who knowingly fails to pay the rate of wages commits a Class B misdemeanor. Changes were made to the law during the 2011 session of the Indiana General Assembly that went into effect July 1.

As part of the plea agreement, White River Mechanical will pay a $1,000 fine and submit to an audit by the Indiana Department of Labor to determine the amount it owes to current and former employees. The prosecutor’s office estimated that the amount of unpaid wages and benefits is more than $50,000.

“Today we are sending a message that we will abide by and enforce the Common Wage law in Marion County,” said Prosecutor Terry Curry.  “Contractors who undercut the Common Wage law are taking advantage of their employees, their peers, and the public by not paying their workers the amount that is required and set by law.  At the same time, they are competing unfairly against those companies who play by the rules and pay their employees the correct and fair wage they are owed.”

The Indiana Department of Labor reported that this is the first time this kind of violation has been prosecuted in Indiana.

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