Gaetan Richard and Murray Rice were arrested this month on numerous charges, including racketeering, related to workers’ compensation fraud. According to state records, they have two active construction businesses: Richard and Rice Construction LLC and Richard & Rice Construction Co., Inc. Four other co-defendants were also arrested.
The alleged criminal scheme involved paying workers through over twenty shell companies. Over the course of about two years, Richard and Rice paid the shell companies nearly $40 million. According to an affidavit from the investigating detective, more that $12 million in workers’ compensation premiums and over $3 million in federal payroll taxes went unpaid.
If convicted, they could face 30 years in prison.
/wp-content/uploads/2024/02/CMWCarpenterslogoFIN.png00IKORCC/wp-content/uploads/2024/02/CMWCarpenterslogoFIN.pngIKORCC2016-02-01 00:00:002019-06-23 05:26:03Construction Co. Owners Face Racketeering Charges in Florida
Initially, many of unions were taken by surprise by the non-union sector’s developing economic clout. In the absence of a comprehensive counter-strategy, a number of locals and district councils adopted wage concessions in order to stay competitive with the non-union sector. Non-union employers effectively undercut that tactic by simply driving their own pay rates down further. At the same time, the ABC grew in political sophistication and became one of the linchpins of the “New Right” that propelled Ronald Reagan to the presidency in 1980.
“Our organization was set up to deal with the industry as it was in post-World War II North America,” said UBC General President Doug McCarron when he was elected in 1995. “But the industry has changed drastically since then, and we must change with it.”
Since his election, McCarron has reorganized the Brotherhood’s priorities and its structure. He set organizing as the union’s number one priority and has redirected its resources to get that job done. The union’s localized and often politically-motivated structure has also been restructured and streamlined to reflect today’s regional and national construction industry, as well as to ensure that union leaders are more accountable to members for the job they do.
The ultimate goal of these structural changes is to organize and reorganize every carpenter and contractor in North America and set the standard for wages, benefits, and working conditions on every jobsite. It is an ambitious goal, and one that will take a long-term effort to complete. But it can be done through organizing.
The UBC faces a complex and challenging future. New tools and materials and new methods of construction are entering the industry at an accelerated rate. In many ways, the carpenter of the 1990s is no different from the carpenter of the 1880s. But all indications are that the dawn of the 21st century will bring much more rapid technological innovation. Increasingly, the on-site carpenter is more an “installer” than a “fabricator” with the development of prefabricated materials, modular components, and panellized building sections. The multi-faceted general contractor is giving way to the construction manager whose subcontractors expect their carpenters to restrict their skills to more highly specialized tasks, such as concrete forms, framing, drywall, ceilings, finish work, etc. Union apprenticeship and journeyman-enhancement training programs have addressed these new developments while at the same time maintained a high level of all-around craft competence that union journeymen will always need.
Ultimately, maintaining and extending a strong union for carpenters will depend on combining an awareness of the dynamics of the future with the finest traditions of the past. The days of “country club” unionism that provided job security to members by keeping membership numbers down and the unorganized out are over. The UBC’s growth in the future rests on its ability to reach out and open its doors to all working carpenters.
Just as Peter J. McGuire built the Carpenters Union in the 19th century by organizing all carpenters, today’s leaders must rebuild this union in the 21st century in much the same way. They must embody that same spirit of inclusion in order to organize the unorganized and mobilize current union members to talk to their non-union brothers.
In 1882, W.F. Eberhardt of Philadelphia’s UBC Local 8 (which remains strong to this day), wrote a letter to the Carpenter. He outlined the efforts of his local’s members to contact every single carpenter in the city on a ward-by-ward basis. He described how those pioneering volunteer carpenter-organizers held regular meetings across the city to bring the unorganized carpenters into the new union. Today, more than 116 years later, the Brotherhood is using a “new” model much like the outlined by Eberhardt. Every district, council, and local in the union currently boasts an active volunteer organizing committee that uses today’s modern techniques and technologies, as well as old-fashioned one-on-one contact, to spread the still-relevant message of unionism to every non-union carpenter in their area. The American workforce may look different today–more multi-cultural, multi-racial, and multi-lingual. But the underlying principle of organizing all the men and women who make their living at the carpentry trade is exactly the same as it was in 1881, when 36 carpenters met in Chicago to improve their lives, their futures, and their trade.
Photo source: FreeImages.comGeorgeBosela
https://www.cmwcarpenters.com/wp-content/uploads/2019/06/union-on-brick-1221057-1280x960_SOURCE-FreeImages.comGeorgeBosela.jpg9001200IKORCC/wp-content/uploads/2024/02/CMWCarpenterslogoFIN.pngIKORCC2016-02-01 00:00:002019-06-23 05:23:31Today: UBC Meets the Challenge
“[A]s more workers’ comp fraud cases start creeping into the headlines, authorities are cracking down on the illegal practice, and construction companies need to be aware of their legal duties to avoid the potential consequences of fraud.”
“There are a few basic types of employer workers’ comp fraud, with diverse variations stemming from those few types.
“One instance of fraud involves paying employees cash off the books so that the amount of payroll on which premiums are calculated is reduced, thereby reducing premiums.”
“Along those same lines are cases when employers intentionally misclassify employees as independent contractors.”
“Yet another common scheme is using shell companies, or companies set up for the sole purpose of paying employees without paying workers’ comp insurance and other benefits or taxes. This can be a company that the employer sets up himself or a third party who poses as a single-man operation with minimal insurance and minimal paperwork — just enough to avoid raising questions during an insurance premium audit.”
“Perhaps the strongest enforcement assets are contractors themselves.
‘”When you get burned on a job, and you didn’t get the award because somebody’s doing it for a price you know they can’t, (other employers) just turn them in,” [Mark] Sierra [construction insurance expert and consultant] said. “Then the state has people that go out on job sites and inspect them. So, yes, the competition definitely helps police it.”
[William] Canak [professor, Middle Tennessee State University] added, “At a national level over the last decade, there’s been much greater recognition that there are a lot of people breaking the rules and that it negatively affects the proper functioning of the marketplace for employers and employees. It harms the community, it harms the workers and it harms law-abiding employers. So we’re seeing these initiatives roll out, and that’s good. It can’t all happen at once, but we’re making a lot of progress.”’
Jon Bel Edwards was elected Governor of Louisiana. He appointed Executive Secretary-Treasurer Jason Engels to his economic development transition team. The team will make recommendations on job training and workforce development. Recently, Jason appeared on New Orleans News 8 in a three-part series exposing payroll fraud in the Louisiana construction industry.
/wp-content/uploads/2024/02/CMWCarpenterslogoFIN.png00IKORCC/wp-content/uploads/2024/02/CMWCarpenterslogoFIN.pngIKORCC2016-02-01 00:00:002019-06-23 05:28:32Engels on Transition Team
Local unions took advantage of the favorable conditions to expand into new areas of collective bargaining. In 1950, for example, the New York District Council of Carpenters negotiated a 3% payroll tax to support a Carpenters Welfare Fund. The idea of health and welfare funds became so attractive that the national office’s Health and Welfare Committee, appointed in 1954, urged all locals to set up programs as quickly as possible. Jointly trusteed pension funds soon followed, as well as other contract gains, such as safety measures, travel time, and coffee breaks.
The accomplishments of this period brought additional stability into the lives of working carpenters and their families. Unfortunately, the extended boom and success in the bargaining arena also bred a measure of complacency within the unions. With nearly full employment becoming routine, business agents often reduced their roles to those of office administration, job referrals, and contract negotiations. Traditional tasks such as organizing the unorganized and membership education fell by the wayside. Furthermore, many union leaders and rank-and-file members, terrified by the nightmare of the Great Depression, were convinced that job security depended on limiting the number of union members in order to minimize competition for a finite number of jobs.
The post-war construction boom, however, outpaced the unions’ ability to satisfy all the labor requirements. As a result, a significant number of non-union contractors began to appear on the fringes of the industry, particularly in suburban and rural homebuilding. Many unionists remained unconcerned about the potential threat of these newcomers since work was plentiful in the growing commercial and industrial construction sectors. Compared to the physical demands and the short life span of house construction, employment was more stable and of longer duration on large-scale projects. Ignoring the emerging non-union workforce came at a cost, however. While union trades workers continued to build 80% of all construction in the U.S. As late as 1969, the reliance on bigger projects and a limited membership allowed the non-union employers to win a foothold in the industry.
The 1970s began a new and more difficult era. The face of labor relations in construction has been completely transformed in the last 20 years. While the Carpenters Union and other building trades unions have always had to contend with hostile governmental interference and economic insecurity, they still successfully established unionism as a widely accepted force in the industry by the turn of the century. Since 1970 however, the rapid rise of the open shop has upset the long-standing collective bargaining equilibrium in construction. Modern anti-union advocates have been able to accomplish much more than their predecessors did. Today, just 30-35% of the construction dollar in the U.S. involves union workers.
The roots of this transformation can be found in the spiraling costs of the late 1960s. Escalating materials and labor prices set off alarms in the ranks of building owners, management consultants, corporate journalists, and public policy makers. In 1969, 200 of the nation’s top executives formed the Business Roundtable in order to put a lid on construction bills. The Roundtable, made up of the heads of General Motors, General Electric, Exxon, U.S. Steel, Du Pont, among others, concluded that the route to financial control over capital construction costs lay in blunting the power of the building trades unions.
The Roundtable built political support to weaken legislation, such as the Davis-Bacon Act, that protects construction workers’ wages. It laid out a collective-bargaining agenda to eliminate union gains. Finally, many of its members sponsored and subsidized non-union contractors on their own projects. The Roundtable’s efforts combined with the severe building recession of the mid-1970s and an increasingly anti-labor political climate in the United States to provide a generous window of opportunity for the open-shop movement.
Non-union builders, gathered under the umbrella of the Associated Builders and Contractors (ABC), took advantage of these opportunities. Today, construction in the U.S. is no longer dominated by union contractors. Open-shop and/or double-breasted firms now participate in and even control many major construction markets. Their mission is clear. They reduce wages, weaken established safety and working conditions, and change the way work is carried out on the jobsite. They seek to replace the traditional egalitarian apprentice/journeyman system with the co-called “merit shop” philosophy in which workers are pitted against one another and have no real shot at quality training or a decent lifelong career in the trades.
https://www.cmwcarpenters.com/wp-content/uploads/2019/06/cranes-1253907-640x480_SOURCEFreeImages.comStephenGibson-BWresized.jpg400560IKORCC/wp-content/uploads/2024/02/CMWCarpenterslogoFIN.pngIKORCC2016-01-29 00:00:002019-06-23 05:33:39Prosperity, Complacency and Trouble
Construction Co. Owners Face Racketeering Charges in Florida
/0 Comments/in News /by IKORCCGaetan Richard and Murray Rice were arrested this month on numerous charges, including racketeering, related to workers’ compensation fraud. According to state records, they have two active construction businesses: Richard and Rice Construction LLC and Richard & Rice Construction Co., Inc. Four other co-defendants were also arrested.
The alleged criminal scheme involved paying workers through over twenty shell companies. Over the course of about two years, Richard and Rice paid the shell companies nearly $40 million. According to an affidavit from the investigating detective, more that $12 million in workers’ compensation premiums and over $3 million in federal payroll taxes went unpaid.
If convicted, they could face 30 years in prison.
Today: UBC Meets the Challenge
/0 Comments/in News /by IKORCC“Our organization was set up to deal with the industry as it was in post-World War II North America,” said UBC General President Doug McCarron when he was elected in 1995. “But the industry has changed drastically since then, and we must change with it.”
Since his election, McCarron has reorganized the Brotherhood’s priorities and its structure. He set organizing as the union’s number one priority and has redirected its resources to get that job done. The union’s localized and often politically-motivated structure has also been restructured and streamlined to reflect today’s regional and national construction industry, as well as to ensure that union leaders are more accountable to members for the job they do.
The ultimate goal of these structural changes is to organize and reorganize every carpenter and contractor in North America and set the standard for wages, benefits, and working conditions on every jobsite. It is an ambitious goal, and one that will take a long-term effort to complete. But it can be done through organizing.
The UBC faces a complex and challenging future. New tools and materials and new methods of construction are entering the industry at an accelerated rate. In many ways, the carpenter of the 1990s is no different from the carpenter of the 1880s. But all indications are that the dawn of the 21st century will bring much more rapid technological innovation. Increasingly, the on-site carpenter is more an “installer” than a “fabricator” with the development of prefabricated materials, modular components, and panellized building sections. The multi-faceted general contractor is giving way to the construction manager whose subcontractors expect their carpenters to restrict their skills to more highly specialized tasks, such as concrete forms, framing, drywall, ceilings, finish work, etc. Union apprenticeship and journeyman-enhancement training programs have addressed these new developments while at the same time maintained a high level of all-around craft competence that union journeymen will always need.
Ultimately, maintaining and extending a strong union for carpenters will depend on combining an awareness of the dynamics of the future with the finest traditions of the past. The days of “country club” unionism that provided job security to members by keeping membership numbers down and the unorganized out are over. The UBC’s growth in the future rests on its ability to reach out and open its doors to all working carpenters.
Just as Peter J. McGuire built the Carpenters Union in the 19th century by organizing all carpenters, today’s leaders must rebuild this union in the 21st century in much the same way. They must embody that same spirit of inclusion in order to organize the unorganized and mobilize current union members to talk to their non-union brothers.
In 1882, W.F. Eberhardt of Philadelphia’s UBC Local 8 (which remains strong to this day), wrote a letter to the Carpenter. He outlined the efforts of his local’s members to contact every single carpenter in the city on a ward-by-ward basis. He described how those pioneering volunteer carpenter-organizers held regular meetings across the city to bring the unorganized carpenters into the new union. Today, more than 116 years later, the Brotherhood is using a “new” model much like the outlined by Eberhardt. Every district, council, and local in the union currently boasts an active volunteer organizing committee that uses today’s modern techniques and technologies, as well as old-fashioned one-on-one contact, to spread the still-relevant message of unionism to every non-union carpenter in their area. The American workforce may look different today–more multi-cultural, multi-racial, and multi-lingual. But the underlying principle of organizing all the men and women who make their living at the carpentry trade is exactly the same as it was in 1881, when 36 carpenters met in Chicago to improve their lives, their futures, and their trade.
Photo source: FreeImages.comGeorgeBosela
Avoid the perp, walk: workers’ comp. premium fraud
/0 Comments/in News /by IKORCC“There are a few basic types of employer workers’ comp fraud, with diverse variations stemming from those few types.
“One instance of fraud involves paying employees cash off the books so that the amount of payroll on which premiums are calculated is reduced, thereby reducing premiums.”
“Along those same lines are cases when employers intentionally misclassify employees as independent contractors.”
“Yet another common scheme is using shell companies, or companies set up for the sole purpose of paying employees without paying workers’ comp insurance and other benefits or taxes. This can be a company that the employer sets up himself or a third party who poses as a single-man operation with minimal insurance and minimal paperwork — just enough to avoid raising questions during an insurance premium audit.”
“Perhaps the strongest enforcement assets are contractors themselves.
‘”When you get burned on a job, and you didn’t get the award because somebody’s doing it for a price you know they can’t, (other employers) just turn them in,” [Mark] Sierra [construction insurance expert and consultant] said. “Then the state has people that go out on job sites and inspect them. So, yes, the competition definitely helps police it.”
[William] Canak [professor, Middle Tennessee State University] added, “At a national level over the last decade, there’s been much greater recognition that there are a lot of people breaking the rules and that it negatively affects the proper functioning of the marketplace for employers and employees. It harms the community, it harms the workers and it harms law-abiding employers. So we’re seeing these initiatives roll out, and that’s good. It can’t all happen at once, but we’re making a lot of progress.”’
Construction Dive, January 26, 2016
Engels on Transition Team
/0 Comments/in News /by IKORCCJon Bel Edwards was elected Governor of Louisiana. He appointed Executive Secretary-Treasurer Jason Engels to his economic development transition team. The team will make recommendations on job training and workforce development. Recently, Jason appeared on New Orleans News 8 in a three-part series exposing payroll fraud in the Louisiana construction industry.
Prosperity, Complacency and Trouble
/0 Comments/in News /by IKORCCLocal unions took advantage of the favorable conditions to expand into new areas of collective bargaining. In 1950, for example, the New York District Council of Carpenters negotiated a 3% payroll tax to support a Carpenters Welfare Fund. The idea of health and welfare funds became so attractive that the national office’s Health and Welfare Committee, appointed in 1954, urged all locals to set up programs as quickly as possible. Jointly trusteed pension funds soon followed, as well as other contract gains, such as safety measures, travel time, and coffee breaks.
The accomplishments of this period brought additional stability into the lives of working carpenters and their families. Unfortunately, the extended boom and success in the bargaining arena also bred a measure of complacency within the unions. With nearly full employment becoming routine, business agents often reduced their roles to those of office administration, job referrals, and contract negotiations. Traditional tasks such as organizing the unorganized and membership education fell by the wayside. Furthermore, many union leaders and rank-and-file members, terrified by the nightmare of the Great Depression, were convinced that job security depended on limiting the number of union members in order to minimize competition for a finite number of jobs.
The post-war construction boom, however, outpaced the unions’ ability to satisfy all the labor requirements. As a result, a significant number of non-union contractors began to appear on the fringes of the industry, particularly in suburban and rural homebuilding. Many unionists remained unconcerned about the potential threat of these newcomers since work was plentiful in the growing commercial and industrial construction sectors. Compared to the physical demands and the short life span of house construction, employment was more stable and of longer duration on large-scale projects. Ignoring the emerging non-union workforce came at a cost, however. While union trades workers continued to build 80% of all construction in the U.S. As late as 1969, the reliance on bigger projects and a limited membership allowed the non-union employers to win a foothold in the industry.
The 1970s began a new and more difficult era. The face of labor relations in construction has been completely transformed in the last 20 years. While the Carpenters Union and other building trades unions have always had to contend with hostile governmental interference and economic insecurity, they still successfully established unionism as a widely accepted force in the industry by the turn of the century. Since 1970 however, the rapid rise of the open shop has upset the long-standing collective bargaining equilibrium in construction. Modern anti-union advocates have been able to accomplish much more than their predecessors did. Today, just 30-35% of the construction dollar in the U.S. involves union workers.
The roots of this transformation can be found in the spiraling costs of the late 1960s. Escalating materials and labor prices set off alarms in the ranks of building owners, management consultants, corporate journalists, and public policy makers. In 1969, 200 of the nation’s top executives formed the Business Roundtable in order to put a lid on construction bills. The Roundtable, made up of the heads of General Motors, General Electric, Exxon, U.S. Steel, Du Pont, among others, concluded that the route to financial control over capital construction costs lay in blunting the power of the building trades unions.
The Roundtable built political support to weaken legislation, such as the Davis-Bacon Act, that protects construction workers’ wages. It laid out a collective-bargaining agenda to eliminate union gains. Finally, many of its members sponsored and subsidized non-union contractors on their own projects. The Roundtable’s efforts combined with the severe building recession of the mid-1970s and an increasingly anti-labor political climate in the United States to provide a generous window of opportunity for the open-shop movement.
Non-union builders, gathered under the umbrella of the Associated Builders and Contractors (ABC), took advantage of these opportunities. Today, construction in the U.S. is no longer dominated by union contractors. Open-shop and/or double-breasted firms now participate in and even control many major construction markets. Their mission is clear. They reduce wages, weaken established safety and working conditions, and change the way work is carried out on the jobsite. They seek to replace the traditional egalitarian apprentice/journeyman system with the co-called “merit shop” philosophy in which workers are pitted against one another and have no real shot at quality training or a decent lifelong career in the trades.