Sandy cleanup workers treated as independent contractors
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Three of the men hired to help clear the Long Island Rail Road of downed trees were classified as independent contractors, a common method employers use to get around paying workers prevailing wage rates, prosecutors and labor department officials said.
Salaam Saffiy, 46, a former Miami resident who now lives in Philadelphia, worked for Custom Tree Care, a Topeka, Kan.-based subcontractor for Huntington-based Looks Great Services Inc., clearing the railroad.
Saffiy, William Moore and Troy Roberts said they became suspicious of what they would be paid after they were told by Custom Tree Care to fill out a 1099 tax form, the IRS instrument used by corporations to document payments to independent contractors.
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Saffiy, who like Moore and Roberts signed the form, said he grew more concerned after his first full week's paycheck for $850 was smaller than he expected and there was no accompanying paperwork showing the number of hours he worked or benefits earned.
Worker misclassification deprives the government of revenue and puts law-abiding contractors at a disadvantage because it forces them to compete against firms that illegally cut payroll costs, according to experts.
Under New York State labor law, "laborers, workers and mechanics" are entitled to prevailing wages. By misclassifying employees as independent contractors, employers get out of having to pay prevailing wages.
In 2011, the Joint Enforcement Task Force on Employee Misclassification appointed by Gov. Andrew M. Cuomo found 19,600 instances that year of employee misclassification and $412 million in unreported wages statewide. In 2010, the White House estimated that increased enforcement nationally could yield in the next decade $7 billion in revenue and penalties.
Saffiy said he helped remove mountains of debris in New Orleans after Katrina struck in August 2005 and after other major disasters in the Gulf States. Because of his experiences he and the workers he traveled with to Long Island for Sandy expected they would be paid New York State prevailing wages.
Custom Tree Care CEO Greg Gathers declined to be interviewed for this story. A spokesman for Looks Great Services referred questions to Custom Tree Care and declined to make the company's president, Kristian Agoglia, available for an interview.
Saffiy said two weeks into the work that he, Moore and Roberts received ATM cards and were told by the company supervisor that's how they would now be paid. The men were instructed they could make withdrawals from their card weekly. They received no further paperwork from the company showing an hourly wage breakdown, overtime payments, or whether benefits were paid and taxes taken out.
By Nov. 13, the workers had learned from the state labor department the rate they should have been paid -- about $1,665 for a 40-hour workweek, including benefits. Saffiy and his co-workers said they worked at least 12-hour days, seven days a week, and qualified for overtime payments.
"I knew the pay I was supposed to get and I kept telling the supervisor, 'Hey man, we're supposed to get prevailing wage,' " he said.
Under the state's Construction Industry Fair Play Act, passed in 2010, workers are considered company employees unless a worker is free from direction and control in performing the job; the work to be performed isn't part of the usual work done by the business that hired the individual; or the worker has an independently established business.
Tension between management and employees was constant during the LIRR cleanup, said Aaron Mathis, 34, of Topeka, Kan., who worked for Custom Tree Care and who supplied copies of his payroll records to Newsday.
"They were saying it wasn't a prevailing wage job," said Mathis, who has sole custody of his 6-year-old son. "They just acted like we didn't know what we were talking about."
Roberts, 36, a fifth Custom Tree Care worker from Houston who hasn't filed a wage verification complaint with the state department of labor, said he drove three days to New York with Saffiy and Moore, 41, of Orange, Texas. He was looking forward to $27 an hour to recoup the money he'd already spent on travel costs.
"That's the only reason I went there to New York," Roberts said. "I wouldn't have gone 5,000 miles for $9 an hour."