Construction workers claim wage theft at Sheldon ISD project

The new C.E. King High School opened about a year ago, designed like a college campus to accommodate a rapidly growing student population in the Sheldon Independent School District. The nearly three-year construction project cost $146 million.

It may also have cost Juan Carlos Valladares and Eduin Hernandez at least 16 percent of their annual income.

Valladares and Hernandez, who did painting on the project, said in statements filed with the Sheldon ISD board that a subcontractor, Allenko Finishes of Houston, failed to pay them the prevailing wage — the minimum required for public construction projects. The workers and the union that helped bring their claims also say that Sheldon ISD failed to thoroughly investigate.

Valladares’ and Hernandez’s efforts to get back pay show the hurdles that workers face when they believe they’ve been shortchanged on the job. The cases are hardly unusual: study by the University of Texas and Workers Defense Project, an advocacy group, found that one in five construction workers are victims of wage theft, the practice of denying workers pay or benefits rightfully owed them.

This dispute revolves around job classifications. Sheldon ISD and Allenko deny that Valladares and Hernandez were underpaid, noting they were classified as laborers and received $12 an hour, 19 cents above the prevailing wage for that job. But had they been classified as painters, the two workers would have received nearly $4 an hour more.

Laborers are defined as workers who lift and haul materials, help with cleanup and other unskilled or semi-skilled work, according to project documents. A painter is a worker who “prepares wall surfaces and applies paint.”

Over the seven months they worked on the project, Valladares and Hernandez said in statements filed with Sheldon ISD, they prepared and sanded surfaces, rolled paint onto walls and ceilings and finished the trim with brushes. Both Hernandez and Valladares said they were told they would be painters when they were hired, and they painted every day.

Allenko’s attorney, Mo Taherzadeh, said the workers were properly classified, noting that picking up a brush does not make a worker a painter.

“I just don’t think that’s how it works,” Taherzadeh said. “Then there would be no (laborers) in the painting industry.”

He said what makes someone a painter is the quality of the work, but could not provide specific standards or qualifications, such as certain number of years of experience. He declined to comment on how many of Allenko’s workers on the C.E. King job were classified as painters.

The combined $11,000 that the two workers claim they lost in earnings is barely a rounding error in the budget for the 580,000-square-foot, state-of-the art facility. But for Valladares and Hernandez, the extra money could mean making rent, keeping up with car payments or keeping on the utilities.

“It would make a big difference economically,” Hernandez said. “It would help me become a little more stable.”

On HoustonChronicle.com: Construction workers pressure University of Houston over contractor’s alleged wage theft

‘Not an isolated incident’

Valladares and Hernandez began working on the project in February 2019 and June 2019, respectively. Allenko declined to disclose the value of the contract and the number of painters on the job. The school district said it did not have that information about the subcontractor in its records.

Allegations of wage theft were first raised by the International Union of Painters and Allied Trades, which said it frequently finds violations of prevailing wage laws at public construction projects. At the C.E. King worksite, the union said it spoke to eight workers about their earnings.

The union then filed a public records request with Sheldon ISD, obtaining a wage scale that showed painters earning $15.75 an hour, rather than the $12 an hour many workers were getting paid.

“This is not an isolated incident,” Sal Herrera, the director of organizing for the painter’s union said. “This happens every day, all across school districts.”

The union has helped workers bring similar wage theft complaints with two other school districts over the last two years. Recovering wages is often a long, drawn out process that takes time and resources, Herrera said, which is part of the reason so few workers bring complaints.

Of the eight workers the union talked to at the C.E. King site, only Valladares and Hernandez came forward.

The reluctance of workers to press wage theft cases, usually out of fear of retaliation, is one of the reasons the practice is prevalent, worker advocates said. Between 2013 and 2015 about $50 million of wages were stolen from construction workers in Texas, according to a 2017 study by Economic Policy Institute, a Washington think tank.

In the case of projects such as C.E. King High School, it’s up to the school district to make the determination of wage theft. When workers come forward they are often asked to provide identifying information, including their name and Social Security number, leaving them vulnerable to getting fired.

Texas is one of six states without laws to protect workers alleging wage theft from retaliation, according to a report by the National Employment Law Project, an advocacy group in New York.

Valladares, 49, figured he didn’t have a lot to lose. Normally earning about $30,000 a year, he said he lives paycheck-to-paycheck, struggling to keep up with rent and child support. The possibility of receiving $5,000 in back wages seemed worth the risk.

“I need to be able to pay my rent,” Valladares said.

With painting jobs hard to find, Valladares decided to work in landscaping, but sometimes could only get two to three days of work a week as people cut back on expenses during the pandemic and recession. He estimates he only earned about $18,000 in 2020.

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The painters’ union estimates that Hernandez, who earns about $38,000 a year, was underpaid by about $6,000. Hernandez, his wife and two children live in a house with three other families, living on tight budget to stay top of bills and pay his $350 rent.

But there isn’t much extra money after bills are paid. His son recently had a medical emergency and Hernandez said he has no idea he will cover the $9,000 medical bill.

“They have to look for a solution,” Hernandez said.

Uphill battles

Under state law, prevailing wage disputes must first be brought to the public body that hired the contractor, in this case Sheldon ISD. The board made an initial determination that the workers were paid the correct amount.

The workers were never interviewed before the school board made the initial determination. Sheldon ISD said while making the initial determination it followed the state laws.

“The district performed a good-faith, thorough investigation of all information timely submitted regarding the complaints,” a spokeswoman said.

The workers’ claims will now go to arbitration, according to the union, where an arbitrator will review the complaints and decide the issue.

Laura Perez-Boston, the organizing director for the Workers Defense Project, a nonprofit that advocates for workers’ rights, said misclassifying trades people as laborers is common in public sector projects. She pointed to a recent dispute at the University of Houston, where construction workers on the Quadrangle Housing Replacement project rallied in February, claiming they were underpaid by $50,000 due to being misclassified and not getting overtime.

The University of Houston offered to facilitate a meeting between the Workers Defense Project and the contractors and subcontractors, but said the university could not resolve the dispute itself. It suggested the group pursue solutions with state and federal regulators.

Workers who press wage theft claims face uphill battles, Perez-Boston said. Workers can file claims with the Texas Workforce Commission or U.S. Department of Labor, but the burden falls on workers to find legal assistance and other resources they need to make their cases, Perez-Boston said. And just because a judgment comes out in a worker’s favor, doesn’t mean the company will pay the back wages.

Perez-Boston said that public institutions should do more to protect workers from wage theft and investigate their claims. Too often, she said, wage theft investigations end after institutions talk to contractors.

“You can’t actually just believe contractors,” Perez-Boston said. “You do actually have to talk to workers.”

The story has been updated to clarify information on the initial determination process and investigation by the Sheldon ISD board. 

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