When a group of friends from southern Wake County answered a craigslist ad this fall soliciting workers to help bury fiber cable for AT&T, they jumped at the chance of steady work and good wages.
Within a month, though, they say they found themselves fighting for money and medical care, ground-level players in the type of scheme that state regulators have been trying for years to combat.
The company that hired them, Georgia-based Synchronicity LLC, appears to have treated the workers as independent contractors rather than employees. Labor laws generally specify that workers who are directed and controlled by supervisors must be treated as employees.
One of the workers was injured and has been in a battle with the contractor to take responsibility for his mounting medical bills. Four others say they fought for weeks to collect the wages they were promised for cash payments at a lower rate.
They had turned earlier to labor officials for help, but none came.
“I’m just some dude who wanted a job,” said Ian Livingston, 20, one of the workers who tried to get the state Department of Labor to help him get paid. “They brushed me off so quickly. ... No one wants to listen to me.”
It’s been nearly five years since state officials vowed to crack down on employers cheating workers out of proper pay and protections. While some progress has been made, the schemes persist, and workers are sometimes left in the lurch. A recent state auditor’s report said regulators’ efforts to enforce the law against companies not carrying proper workers’ compensation insurance have been insufficient.
Across the Triangle, laborers are tackling a massive utility project that could bring steady employment and pay to workers for years to come. AT&T and Google are racing to install fiber cables designed to bring high-speed internet services to much of the region. The undertaking is requiring hundreds of workers to dig and bury cable on residents’ property, city officials who issued permits for the project said.
AT&T officials said the company follows labor and employment laws and requires its contractors to do so as well. A company spokesman said AT&T recently reminded its contractor, Ansco & Associates of Atlanta, of those obligations.
George Summers, president of Ansco & Associates, said the company is no longer using Synchronicity as a subcontractor. He declined to elaborate on the circumstances of that separation.
“Our understanding from what they have told us is that they (Synchronicity) were embarrassed this has come up,” Summers said on Dec. 1. “They have properly taken care of their people and their [workers’ compensation] case is being handled.”
A Synchronicity official in the Triangle said late last month that the company is still working in the state. He denied that there had been any payment issues with his workers.
A mangled hand
Livingston and two of his friends, Chris Feola and Derek Mims, said they wish now they had asked more questions when they were hired. Feola saw the ad on craigslist the weekend that Hurricane Matthew ended his job with a framing crew. The job seemed promising: $20 an hour.
Feola said he was hired on the spot and promised cash payments. He said he filled out a 1099 tax form, which companies use for contractors, not employees. The project manager urged him to recruit his friends to join the crew, he said. Within days, Feola said, he was driving the company’s truck and operating its machinery to dig trenches.
On Oct. 31, Feola and Mims were alone at a project near Cary less than a week after being hired. Mims, 19, said he was trying to guide a large drill on a Ditch Witch when his glove got caught on the machine, twisting and crushing his fingers. Feola rushed him to the hospital.
Doctors couldn’t save his pinkie finger. It took two surgeries to straighten three other fingers with pins and screws, Mims said. His doctor warned they may have to amputate another finger if he can’t regain movement after they remove his cast later this month.
When Mims and his mother sought help from Synchronicity officials to pay for Mims’ medical care, they said they were met with excuses and unreturned messages. Sylvia Jones, a field trainer who worked for Synchronicity, said she shuddered when she met Mims and Feola at the hospital that day and saw his hand.
“They shouldn’t have been out there by themselves,” said Jones, who said they had barely been trained on how to install the lines.
After the accident, Mims said he was given $50 in cash for his three days working for the company; he was given another $100 late last month. He has filed a workers’ compensation claim against Synchronicity but fears the company will try to avoid responsibility because he was treated as a contractor. Jones warned Mims that might happen; she said she was fired after trying to advocate for him.
“This is the worst experience I’ve ever had working for anybody,” Mims said.
A persistent problem
Several laws are designed to ensure workers are paid fairly and protected if they are hurt on the job. But in North Carolina, many companies have skirted the laws by treating workers as independent contractors who, by law, should be employees. The practice, called misclassification, saves companies 20 percent or more in taxes and workers’ compensation insurance.
The News & Observer has reported on the pervasiveness of the problem in North Carolina. State regulators worked in silos, failing to share information that would help crack down on companies that misclassified. Honest employers struggled to compete, and the state failed to collect millions in taxes. A N&O analysis in 2014 found that the labor scheme in the construction industry in North Carolina alone was costing the state and federal governments $467 million in taxes each year.
Regulators vowed to do better.
The state invested in technology that would allow agencies to share information to help detect companies breaking the law. A year ago, Gov. Pat McCrory signed an executive order creating a unit within the state Industrial Commission to field complaints about companies misclassifying employees as contractors.
Despite the reforms, the problems persist. The state auditor last month criticized the Industrial Commission’s efforts to find and rein in tens of thousands of companies operating without workers’ compensation insurance.
And despite additional training at the state Labor Department to try and identify worker complaints stemming from misclassification, it didn’t help the workers hired by Synchronicity.
“They completely blew us off,” said Katie Ryals, 21, another worker who tried to get help collecting her pay from Synchronicity. “With the Department of Labor, we were told, basically, we’re screwed.”
‘We don’t have money’
When payday, Nov. 15, came and went without any wages, Livingston, who had worked for two weeks, drove to the state Department of Labor’s main office in downtown Raleigh. Ryals, who said she had been there about a week, and Feola, who said he had logged three weeks, joined Livingston.
They say a receptionist handed them a pamphlet with a phone number to call for the agency’s Wage and Hour Division. The three friends huddled together on the sidewalk as Livingston dialed the number.
The call ended a few minutes later. Livingston said the labor official asked him what kind of tax forms the company had provided. When he told her that he filled out the tax form designed for independent contractors, Livingston said she cut the conversation short. She told him that since he was a contractor, not an employee, he would have to pursue the matter in small claims court.
“I was like, ‘But you are the Department of Labor,’ ” Livingston said in an interview. “I made it clear: ‘We can’t go to small claims court. We don’t have money.’ ”
Christine Ryan, administrator for the labor department’s Wage and Hour Bureau, said she had no record of Livingston’s inquiry because the department only logs complaints that intake operators deem have merit. She said that the exchange Livingston described, however, is not proper protocol.
Ryan said that the call center workers are told to watch out for instances in which a company may be improperly treating a worker as an independent contractor. They are supposed to ask questions about the work dynamic, such as supervision and ownership of the equipment, Ryan said. She said she would welcome another call from the workers and that she had prepped a supervisor at the call center to help.
“I don’t want the phrase ‘independent contractor’ to derail anybody,” Ryan said in an interview.
After striking out with the labor department, Livingston kept trying to get help. He called the city of Raleigh, which issued the permits for their work. He reached out to the Wake Sheriff’s Department, hoping detectives could investigate the matter as a theft. The friends consulted a lawyer.
Finally, Livingston called Ansco & Associates, an Atlanta company AT&T contracted with to do much of the work around The Triangle. Ansco & Associates, in turn, had hired Synchronicity.
Livingston said executives at Ansco and Associates vowed to investigate. An Ansco and Associates executive called Livingston Monday to assure him that he had told Synchronicity to settle the wage payments.
In an interview in late November, Synchronicity’s project manager Dan Dyer said that any allegations that he had not paid his workers were “false statements.”
“My workers have been paid,” Dyer said. “And I don’t have a problem with paying my workers. I never had that issue.”
About three hours later, Livingston said he and a few other workers were summoned by Dyer to same motel parking lot where the workers reported for work each morning in early November. Livingston said Dyer handed each of them some cash. In order to collect it, the company had each of them sign a letter saying “Synchronicity has fulfilled any and all financial responsibilities to me” and that they wouldn’t seek any more pay.
The wages were two weeks late. And Livingston’s share, $700, amounted to about $5 for each of the 140 hours he says he worked.
“I’m just so tired of fighting,” he said. “It just shouldn’t be so hard to get paid for the work you do.”
Locke: 919-829-8927 or @MandyLockeNews
Working on it
State’s efforts to curtail companies skirting labor and insurance obligations:
Workers’ compensation insurance
Since 2013, the state Industrial Commission has forced 1,300 businesses to buy insurance by using software that merges data from a few state agencies.
The commission primarily compared data from the state Division of Employment Security and the North Carolina Rate Bureau to find companies that had three or more employees but had not purchased workers’ compensation insurance as required.
A state auditor’s report issued last month said the commission’s efforts to address the uninsured-employer problem have fallen short. The audit found that by only mining data from a limited number of sources, the commission failed to capture companies not reporting employees to any state agency.
The audit reports that the number of businesses without proper workers’ compensation insurance could be as high as 52,000 and that 1,300 is only 2.5 percent of those companies potentially in violation. The progress has been stalled, in part, by the limited amount of data being mined. The commission plans to add more data soon.
Commission chairman Charlton Allen defended the agency’s fraud detection, saying that the auditor’s estimate of the number of businesses without the insurance is too high. The auditor criticized the commission’s response.
“...the Commission does not know how many businesses do not carry workers’ compensation insurance, and they will not know until they have the capacity to match and investigate all non-exempted businesses to businesses that carry workers’ compensation insurance,” the auditor wrote.
Last December, Gov. Pat McCrory signed an executive order establishing a unit within the state Industrial Commission to field and direct complaints of workers improperly treated as contractors.
The unit has no authority to investigate complaints independently but rather directs them to agencies that enforce the laws being violated.
The N&O first requested information on the unit’s progress on Nov. 21 and requested to speak to the unit’s director. A spokesman from the agency said officials were still processing the request.
The state Department of Labor fields complaints from employees who have not been paid. It only has jurisdiction over employees, not independent contractors.
Christine Ryan, administrator of the agency’s Wage and Hour Bureau, said staff has been trained on how to spot complaints from workers who may have been misclassified by their bosses. During the last year, Ryan said, her unit has referred a monthly average of six to 10 cases of potential misclassification to the state’s Employee Classification Section at the Industrial Commission.
The agency’s annual report said it collected $1.4 million in unpaid wages for 1,400 workers in fiscal year 2015, the most recent year available. The report did not disclose how much in wages from substantiated complaints was not collected.