Nearly a month before Bowdoin proudly unveiled the four new state-of-the-art apartment buildings on Park Row, the College found itself under fire due to the practices of one of its subcontractors, Timberland Drywall, Inc.
Approximately 15 protestors, half of them from the New England Regional Council of Carpenters (NERCC), held signs outside the construction site accusing Timberland Drywall of tax fraud via the misclassification of their workers. NERCC leaders coordinated their protest with the Bowdoin Labor Alliance (BLA).
The NERCC filed complaints with the Maine Department of Labor (MDOL) alleging that Timberland had misclassified its workers as independent contractors, rather than employees.
Wright-Ryan Construction, the general contractor that hired Timberland Drywall and oversaw the Park Row project, released a statement in which the company denied any misconduct.
The College issued its own response to the allegations, stating, “Our contracts stipulate compliance with all applicable legal requirements. If we learn of an issue, we will examine it closely, and if it turns out that there is a problem, we will address it directly and/or through the general contractors.” The College also re-published Wright-Ryan’s denial in its response.
Timberland has worked on construction projects across the state, and has been contracted to work on several government buildings. They did not respond to a request for comment.
The NERCC filled out three separate tip forms alleging worker misclassification. Two of the complaints cited different workers on the site, who said they had worked for Timberland as independent contractors for seven to eight and 10 years, respectively. The complaints were the result of first-hand conversations with drywallers working for Timberland who were dissatisfied with the lack of benefits they were receiving.
Per its standard confidentiality policy, MDOL would not confirm whether or not it had received any tips regarding misconduct by Timberland, nor whether an investigation into the matter was taking place.
Worker misclassification is not uncommon in Maine’s construction industry. According to a 2005 study by the University of Massachusetts: Boston and the Harvard Law School and School of Public Health, 14.2 percent of Maine’s construction employers misclassify their workers.
Under Maine law, contractors must meet a variety of qualifications to be classified as “independent.” According to MDOL’s guidelines, independent contractors are required to control the means and progress of their work and can also choose to accept or decline jobs. Additionally, it is commonplace for independent contractors to provide their own tools.
Construction workers who fit the definition of an “employee” are often misclassified as independent contractors. These workers operate under the direction of a superior and are entitled to benefits such as healthcare, retirement contributions and are eligible for worker’s compensation. Independent contractors are not afforded these benefits.
In addition, a company that misclassifies its workers avoids paying worker’s compensation insurance, among other taxes. According to John Leavitt, an executive committee member at the NERCC, roughly one third of a contractor’s bid will go to taxes, thus allowing contracting companies who misclassify their workers to undercut the bids of contractors operating under the law.
The Maine Revenue Service estimates that the state lost $2.7 million in state income tax alone due to the misclassification of construction workers, and according to the 2005 study, that number could be as high as $4.3 million.
In some cases, workers who are unaware that they are classified as independent contractors end up owing significant amounts of money to the government in unpaid taxes because independent contractors have no employer to withhold their taxes.
A MDOL memorandum outlining the complaint processing protocols indicates that all complaints are reviewed by the wage & hour director or the chief inspector, suggesting that despite the Department’s refusal to confirm, the NERCC’s allegations have been investigated.
John Ryan, the president of Wright-Ryan, referred to the company’s statement regarding the allegations against Timberland. When asked how he could be confident that Timberland was not under investigation given MDOL’s policy to not comment on possible investigations, Ryan stuck by his prior statement. The conversations between representatives from Wright-Ryan and MDOL led Ryan to believe that Timberland was not under investigation.
Despite the College’s and Wright-Ryan’s denial that MDOL is investigating Timberland, Leavitt continues to disagree. “I would say that is false,” Leavitt said of the college’s and Wright-Ryan’s claims, after requesting and holding closed-door meetings with the MDOL.
“They’re not going to tell me what they’re doing, they can’t … I filed complaints and other people have filed complaints on Timberland and on other companies,” said Leavitt. “Their due diligence is to do an investigation. So that should spell it out.”
Given the confidence that both the NERCC and Wright-Ryan have in their respective judgments of Timberland’s labor practices, it remains unclear if Timberland committed worker misclassification. Because the construction project is finished, the workers themselves were not available for comment.
The BLA became involved with the protest after representatives from the NERCC reached out to partner with the student group. Benjamin Ray ’20, a co-founder of the BLA and a native Mainer, is concerned with the potential effects of Bowdoin’s tacit endorsement of a company that is accused of “cheating our community,” as Ray phrased it.
“When you have drywall companies and even major construction companies that are cutting down costs by not having to pay for big costly health insurance and worker’s comp, then it’s a race to the bottom, and the only one who loses is the workers themselves,” said Ray. “When companies aren’t paying the taxes that they should, that means Social Security is gone, that means our funding for public schools and apartments, our teacher salaries [and] our fire department, infrastructure [are gone]—the taxes that companies should pay are what is funding our communities.”
It may be some time before Wright-Ryan’s denial or the NERCC’s allegations are confirmed—based on Leavitt’s experience, the MDOL can take up to a year to complete a thorough investigation.