Dive Brief:

• The U.S. Attorney's Office of the Northern District of California this month convicted the owner of several construction companies on charges of forced labor and harboring illegal aliens for commercial advantage or private financial gain, according to a press release from the office.
• Prosecutors charged Job Torres Hernandez of Hayward, California, with using his construction businesses to recruit undocumented workers from Mexico and then refuse to pay them. If they complained, he threatened them — and their families — with violence or with deportation. The trial also indicated that Torres held the workers captive in squalid living conditions and required them to work as long as 24 hours at a time.  
• Torres is in custody pending a June 2019 sentencing hearing at which he will face up to 20 years in prison and fines of $500,000, in addition to possible forfeitures and restitution. 

Dive Insight:

Last July, Full Power Properties paid $250,000 in back wages to 22 of Torres’ employees who worked on its Silvery Towers condo development in San Jose, California. U.S. Immigration and Customs Enforcement agents arrested Torres after a 2017 investigation, during which officials found some of the undocumented workers living in a filthy warehouse he owned. After the settlement was announced, Full Power Properties told Constructive Dive that it denied any wrongdoing and that it had changed its due diligence process for choosing subcontractors, as had its general contractor. 

In response to the Silvery Towers incident, San Jose city lawmakers introduced legislation earlier this month that would increase wage protections for construction workers on both public and private projects. The regulations would require developers, contractors and subcontractors to disclose their own prior wage theft violations, as well as their subcontractors'. 

Some construction companies in the U.S. use labor brokers because, by paying their workers under the table and providing no workers’ compensation coverage or other benefits, they are often the cheapest route to manning a project. And since the industry is in the midst of a labor shortage, labor brokers offer a steady supply of workers. According to a United Brotherhood of Carpenters report, state and federal governments lose out on more than $2.5 billion a year in taxes because of illicit pay practices. 

While criticism of labor brokers is typically around the issues of unpaid benefits and taxes — perhaps even lower-than-average pay rates — that system leaves open the possibility that the pool of labor being offered up includes those being forced to work under similar conditions as Torres’ employees. 

In fact, a 2017 report from the nonprofit group Polaris said that construction was one of the top 25 U.S. industries for human trafficking and modern-day slavery.