Minnesota Contractors Ordered to Pay Record $1.28M in Wage Violations
According to Equipment World, the state of Minnesota announced April 27 that it has reached a $1.28 million settlement with contractors for underpaying workers, the largest wage and hour recovery in the state’s history.
Record Settlement Targets Twin Cities Construction Projects
The Minnesota Department of Labor and Industry investigation found that 26 workers were denied overtime and other pay across 19 construction projects in the Twin Cities metro area between March 4, 2019, and June 5, 2022. DLI noted that most of the affected workers were “shorted tens of thousands of dollars.” One of the projects involved was Viking Lakes in Eagan, a 200-plus-acre mixed-use development tied to the owners of the Minnesota Vikings.
The investigation focused on Advantage Construction Inc. and Property Maintenance & Construction LLC (along with a related entity, Property Maintenance and Construction Inc.). Advantage served as a subcontractor on the projects and had hired PMC. Under the consent orders both companies signed, Advantage agreed to pay $1,241,938.95 in back wages, while PMC agreed to pay $1,500 in liquidated damages per affected worker, totaling $39,000.
Both companies denied wrongdoing. Advantage stated it relied on its subcontractor to comply with all applicable wage laws and denied any joint employer relationship with the 26 workers. DLI described the case as a complex investigation aimed at “recovering every dime owed to these impacted workers.”
What It Means for Subcontractors
- The “my sub handled it” defense didn’t hold. Advantage’s position that it relied on PMC to comply with wage laws did not prevent a seven-figure settlement. If you hire lower-tier subs, you can still be pulled into enforcement actions.
- Audit your subcontract wage clauses. Contracts should require lower-tier subs to certify payroll compliance and carry indemnification provisions covering wage violation exposure.
- Overtime recordkeeping is under scrutiny. The violations centered on overtime and other pay, meaning timekeeping accuracy is not just an HR issue. It’s a legal liability on public and large private projects.
- Large, high-profile projects attract more scrutiny. The Viking Lakes development’s visibility likely contributed to regulatory attention. On marquee jobs, expect closer review of payroll practices at every tier.
- Violations spanning years compound fast. The infractions here ran over three years. Regular internal audits, not just end-of-project reviews, are the only way to catch and correct drift before it becomes a million-dollar problem.
