HARRISBURG — After signing a plea agreement on Tuesday, Glenn O. Hawbaker, Inc., will pay more than $20 million in stolen wages to over one thousand Pennsylvania workers.
Attorney General Josh Shapiro said the theft violated the Pennsylvania Prevailing Wage Act and the federal Davis-Bacon Act.
Hawbaker received an estimated $1.7 billion in government contracts between 2003 and 2018, making it one of the largest contractors to complete projects on behalf of the Commonwealth. Shapiro said this is the largest prevailing wage criminal case in U.S. history.
“A month ago I met with some of the men and women who had their wages and retirements stolen by Hawbaker — and I told them that we will do everything we can to get them every cent they are owed under the law,” said Shapiro. “A few minutes ago, I was able to tell them that we made good on that promise.”
The Pennsylvania Prevailing Wage Act and the Davis-Bacon Act were enacted to protect workers by making sure all contractors working on state- or federally-funded projects pay the same wage rates, based on the determination of state and federal agencies. Contractors are permitted to satisfy a portion of the required wage by providing so-called fringe benefits, such as health care and retirement contributions to employees.
Hawbaker pleaded to four felony counts of stealing wages from its workers. According to the lawsuit, the company used money intended for prevailing wage workers’ retirement funds, health and welfare benefits to contribute to retirement accounts for all Hawbaker employees — including the owners and executives —and also subsidizing the cost of the self-funded health insurance plan that covers all employees.
The company disguised its scheme by artificially inflating its costs by millions of dollars each year and claiming credit for prohibited costs.
“I’ve heard directly from contractors that follow the law that this enforcement helps their business, and exposing these flagrant examples of wage theft and misclassification will deter employers from engaging in the same illegal schemes,” said Shapiro. “That’s why my office and our partners in law enforcement are committed to this work.”
Hawbaker was sentenced to five years’ probation and agreed to pay a total of $20,696,453 in restitution to 1,267 affected workers.
Shapiro said if any Pennsylvanians who want to report wage theft at their workplace can contact his office through email, at firstname.lastname@example.org.