Austin Local Says Workers Are Getting Cheated on City-Backed Project

February, 13, 2013

Austin construction workers and workers’ rights activists are accusing hotel developer White Lodging Inc., of cheating employees out of tens of thousands of dollars in wages on one of Austin’s most high-profile construction projects.

In late 2011, the company agreed to pay prevailing wage rates on a downtown JW Marriott project in exchange for a $3.8 million in development fee waivers. Austin Local 520 Business Manager Chris Wagner says White Lodging hasn’t lived up to its promise.

Says Wager:

Looking at the paperwork and talking to workers on site made it clear that they weren’t being paid according to prevailing wage rates. If they aren’t upholding their end of the bargain, they why should the city?

At a Feb.6 press conference, the Workers Defense Project produced affidavits from construction workers whose pay was lower than the prevailing wage. It also produced an e-mail from a Marriott representative who informed one of the contractors that “there is no prevailing wage scale for this project.”

The hotel developer broke ground last fall. The Austin Chronicle reports that city officials had known about wage discrepancies on the project since September, but didn’t initiate an investigation until Local 520 complained.

Says Chronicle reporter Amy Smith:

The first sign of trouble emerged last month, when interim Assistant City Manager Anthony Snipes sent a memo to the mayor and Council that suggested White Lodging was in violation of the city's prevailing wage policy. He said the city's contract management department had initiated a wage audit after receiving verbal complaints from leaders of IBEW Local Union 520, which represents electrical workers.

Most disturbing, says Wagner, is that a government official – no longer with the city – had given White Lodging advice on how to avoid paying prevailing wage.

Enforcing laws like the prevailing wage rate is vital in avoiding a race to the bottom that drives down wages and benefits for all workers, says Local 520 Membership Development Coordinator Philip Lawhon. He says the local, together with other workers’ rights advocates, is lobbying the Austin City Council to pass legislation mandating that employers on any city-backed projects pay a living wage and host safety trainings for workers.

Says Lawhon:

Gov. Rick Perry is spending lots of money to entice companies to come to Texas. He says he’s trying to create jobs, but we want to make sure new jobs are good ones. We’ve got enough jobs paying poverty-level wages, which do nothing to help the economy.

A recent study from the Workers Defense Project and the University of Texas, Austin found that more than half of all Texas construction workers live in poverty.

Photo used under a Creative Commons License from Flickr user joey.parsons.