OAG Alleged that Diverse Masonry Misclassified Dozens of Workers as Independent Contractors to Avoid Paying Full Benefits
Attorney General Brian L. Schwalb today announced that Diverse Masonry Corporation (Diverse Masonry) will pay $191,750 to resolve allegations that the company failed to provide 59 of its workers with benefits, including paid sick leave, as required under District law, by systematically misclassifying them as independent contractors instead of employees.
OAG’s 2019 economic analysis of misclassification in the construction industry found that companies that illegally misclassify workers as independent contractors do so to reduce their labor costs by anywhere from 16.7 to 40 percent. These ill-gotten savings give employers who cheat the system a competitive edge over law-abiding companies and wrongfully suppress labor costs throughout the entire construction industry, where contracts are often awarded through competitive bidding.
“Diverse Masonry was not only exploiting workers to illegally boost its profit margins, but it was also seizing an unfair competitive advantage over law-abiding companies,” said Attorney General Schwalb. “The District’s development and growth depends in large part on the hard work of the construction trades, whose workers are particularly vulnerable when benefits are withheld in illegal misclassification schemes. As the District’s independent Attorney General, I will continue to have workers’ backs and ensure that all businesses...
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