HARRISBURG, Pa. (WHTM) — On Thursday, Pa. Attorney General Josh Shapiro announced theft charges against Glenn O. Hawbaker, Inc., of State College, in relation to violations of the Pa. Prevailing Wage Act and the federal Davis-Bacon Act.
Hawbaker received nearly $2 billion in funding in 2021 and is one of the largest contractors to complete projects in the state.
“This is the largest prevailing wage criminal case on record — under Pennsylvania prevailing wage law and across the United States under federal law,” said AG Shapiro. “My focus now is on holding Hawbaker accountable for breaking the law, and getting these workers their money back.”
Shapiro made it clear that Pa. employers would be held accountable if the state and federal act are broken, and specifically discussed the importance of the wage act in Pennsylvania and the federal Davis-Bacon Act.
“Employers across this Commonwealth, you are on notice: if you steal from your employees, if you misclassify workers, if you violate our labor laws, we are going to find out, we are going to hold you accountable, and we will do all we can so Pennsylvania workers receive the wages and benefits owed to them under the law,” Shapiro said.
According to AG Shapiro, both the Pa. Prevailing Wage Act and the Davis-Bacon Act were signed into law to protect workers, level the playing field and ensure projects that receive state and federal funding were paying the same wage rate.
“Contractors are permitted to satisfy a portion of the required wage by providing fringe benefits to employees. This portion is referred to as a ‘fringe benefit credit,’ and is calculated by determining the hourly equivalent of the value of the benefit to the contractor,” Shapiro explained.
According to Shapiro, despite claims that the company was taking care of its employees, Hawbaker stole from its workers’ benefits fund, specifically taking away retirement, health and welfare money from contracted employees — resulting in tens of thousands of dollars stolen from individual workers’ retirement fund.
“Hawbaker used its workers’ fringe benefit funds to lower their costs, and thereby increase profits for the Hawbaker family,” Shapiro added.
Shapiro also said the charges against Hawbaker are not the first, but the third in a series of wage theft prosecutions over the past few months — and emphasized that it won’t be the last.
These charges conclude a three-year investigation into the company’s practices for calculating and claiming fringe benefit credits.
“Investigators discovered that the company stole wages from its workers by using money intended for prevailing wage workers’ retirement funds to contribute to retirement accounts for all Hawbaker employees – including the owners and executives. As a result, workers received less money in their retirement accounts than what was owed,” Shapiro said. “The company disguised its scheme by artificially inflating its records of benefit spending by millions of dollars each year and claiming credit for prohibited costs. Those measures created the appearance that it provided employees with benefits that far exceeded the cost of those that it actually did.”
Although investigators realized Hawbaker’s deception went on for decades, the state could only charge the company for the last five years of their actions, in accordance with the statute of limitations.
“I recognize that thousands of people across Pennsylvania are finding out for the first time that they were a victim to this company’s crimes. If you are a worker and you believe that you may have lost out on benefits because of this company’s actions, we want to hear from you,” Shapiro said.
Pa. workers who believed they are being stolen from or mistreated in the workplace, can call AG Shapiro’s office or call this hotline: 814-746-3518.
A full statement provided by Glenn O. Hawbaker, Inc. can be read below:
Glenn O. Hawbaker is a third-generation, family-owned company that has been in business for nearly 70 years. Upon learning of the Attorney General’s investigation in 2018, we have cooperated fully. While we believe that we have always acted in accordance with all state and federal laws, in an abundance of caution, the company immediately changed its prevailing wage practices. These changes remain in effect today as we continue to do what’s right for our employees, both past and present. Our company will continue to work constructively with the Attorney General’s office to reach a swift resolution. Since 1952, Glenn O. Hawbaker’s mission has been to build, serve and advance local communities, and that will never change.