Excavation Company Paying $356,000 in Back Wages, Premiums

Two brothers who own a Vancouver, Wash. excavation business have agreed to pay $356,000 in a case involving unpaid overtime wages and workers' compensation premiums, the state Department of Labor & Industries reported. The brothers, Jerry and James Schram, business partners in Schram's Excavating, pleaded guilty to misdemeanor charges for the unpaid wages; Jerry Schram pleaded guilty to a gross misdemeanor and will serve 30 days in jail. Both were given two years' probation and 240 hours of community service, according to L&I.

The settlement includes a payment, made July 8, of $75,000 to employees who were owed overtime pay for working more than 40 hours a week. "This settlement levels the playing field for other excavating companies," said Carl Hammersburg, manager of the L&I Fraud Prevention and Compliance Program. "Most contractors in Washington are honest. It's unfair when they can be underbid by companies that aren't paying their employees properly or are avoiding the insurance costs for caring for injured workers."

The company pleaded guilty to a felony for hiding information used to set the firm's comp insurance premiums. As a result, L&I dropped 31 other felony charges "to avoid the costs of a lengthy trial and expedite payment of unpaid wages and debts," the agency said.

L&I has increased its efforts to find unregistered contractors and registered construction companies that purposefully underpay their insurance premiums. A report to the state's Underground Economy Task Force estimated taxes owed by those in the underground construction economy in 2006 totaled $126 million; the Legislature increased funding to combat the underground economy and allow for another attorney to be hired.

 

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