Underpaid 'executives' to get more Employer violated Baltimore wage law

September 12, 1990|By Michael K. Burns

Four vice presidents seemed like a lot for the small Lutherville firm that had a Baltimore contract to make electrical repairs in municipal buildings.

When the city Wage Commission investigated, it found these "executives" were only electricians, whose titles were created to avoid paying them proper wages.

The four electricians of Adam Electric Co. Inc. earned hourly rates between $7 and $13.50, the city investigators discovered, much less than the $22.40-an-hour "prevailing wage" to which they were legally entitled.

Last week, Baltimore's Board of Estimates awarded the four workers a total of $24,817 in underpaid wages stretching back to March 1989 and fined the company $5,700.

"This was just an attempt to get around the law," said Jesse Hinson, director of the Wage Commission, which enforces the ordinance that establishes standard pay rates for workers on all city contracts. The law is intended to prevent contractors from paying substandard wages in order to lower their bids on city projects.

Owners and board members of companies are exempt from the minimum pay standards, but the electricians in the Adam Electric case said they never attended a board meeting or made an executive decision.

The former Adam Electric employees said they had to sign up as vice presidents in order to be hired.

"The paper was just one thing that they made everybody sign before going to work for the company," said Bryan L. Lance of Westminster, who worked more than three years for the company and who was awarded $12,106 by the board.

Charles Little, who heads Adam Electric, argued that the employees worked without supervision like executives.

Mr. Little said he was considering an appeal to the Baltimore Circuit Court. He said the penalty was too stiff and would put the firm out of business.

Mr. Hinson noted that the company could have been fined as much as $14,300 for the violations, but the amount was reduced by a hearing officer, whose decision was upheld by the board.

According to the city law office, it is weighing further action against the firm for allegedly submitting false payrolls that showed the vice presidents were paid $925 a week.

By the board's decision, Benjamin Komons will get $5,747 in back pay, Joseph Sonntag $3,591, David Mendelsohn $3,373 and Mr. Lance $12,106.

Adam Electric's contract with the city was terminated earlier this year for unrelated reasons, city officials said.

Mr. Hinson said that such contractor abuse of executive exemptions for workers is rare.

"Were we to allow everybody who wanted to be called an officer of the corporation to work without benefit of the prevailing wage, everyone would be an officer, and no one would be paid the wages they are entitled to," he said.

Most infractions uncovered by the city commission are for failing to turn in payrolls on time, Mr. Hinson said.

But the agency also encounters "very imaginative" interpretations of the rules by employers trying to pay skilled craftsmen, such as plumbers and carpenters, the same as ordinary laborers, he said.

Last year, the commission made spot checks of nearly 17,000 weekly payrolls of contractors and came up with dozens of violations, which are subject to $50 daily fines.

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