Looks like San Jose’s good will efforts to provide emergency housing during the pandemic were plagued by bad labor—withholding tens of thousands in wages from construction workers.
According to documents from the city of San Jose’s Office of Equality Assurance, Habitat for Humanity East Bay/Silicon Valley was awarded million-dollar contracts for at least three separate Emergency Interim Housing Projects. Prioritizing speed and efficiency of construction, records show city staff chose the organization due to its expertise building these types of housing solutions and existing contract with the city.
However, Habitat handed off these builds to subcontractors who misclassified workers as “laborers,” shortened hours and certified invalid payrolls. Jobs at each of the sites—Monterey and Bernal, Evans Lane and Rue Ferrari—were required to pay prevailing wages outlined in California’s Labor Code, since these were city “public works” projects.
City documents from October show that VEEV Build—in charge of the Monterey and Bernal location—recorded inaccurate payrolls for its 22 workers, which the OEA concluded merits $319,631 in restitution. Additional penalties will arrive after those debts are paid.
Documents from early November reported subcontractor Suarez & Munoz Construction was liable for misclassifying 18 workers as “laborers,” as they completed jobs like fence installation, planting and decking. Suarez & Munoz Construction now owes nearly $31,000 in restitution to 18 workers and $5,880 in penalties from the Evans Lane project, as well as $70,318 in restitution and $16,560 in penalties from the Rue Ferrari site.
Habitat for Humanity and these subcontractors are now on the hook, as the city’s Compliance Officer awaits the day workers can cash accurate paychecks for their labor.