DLI recovers more than $334K in back wages for construction workers

The Minnesota Department of Labor and Industry (DLI) has recovered more than $334,000 in back wages for construction workers who were not paid the correct prevailing wage or overtime wages.

DLI’s record-setting prevailing-wage investigation found AE2S Construction, LLC, doing business as EIM, a North Dakota company, performed electrical work on a project at a wastewater treatment plant in Detroit Lakes, Minnesota, that was partially funded by a state grant and did not pay its employees the correct wage set under state prevailing-wage law. The company also failed to pay its employees overtime wages and misclassified some of its employees as apprentices instead of electricians.

The investigation, from March 2018 to December 2020, resulted in DLI entering into a consent order with AE2S Construction, LLC and recovering $333,984.26 in back wages through that order for 33 workers, whose individual back-wage payments ranged from $4.20 to $44,033.50. Earlier in the investigation, the company made partial overtime back-wage payments to nine workers for a total of $831.92.

"Skilled construction workers involved in state-funded projects must be paid the appropriate prevailing-wage rate based on the services they perform," said Roslyn Robertson, DLI commissioner. "Companies working in Minnesota must follow our state’s laws."

The prevailing-wage rate is the minimum hourly wage employers must pay their employees performing construction work on projects funded in whole or in part with state dollars. Minnesota's Prevailing Wage Act requires workers to be paid the wage rate for the type of work they are performing on the project. Prevailing-wage rates are based on wages paid in the local community for the same type of work.

DLI is available for consultations to inform project participants, including contractors and subcontractors, about prevailing-wage requirements and best practices for compliance. Contractors that perform work on state-financed construction projects can sign up for prevailing-wage notifications. Contractors planning to bid on projects subject to Minnesota's prevailing-wage law should contact DLI with questions before bidding or entering into construction contracts.