Pennsylvania Attorney General Josh Shapiro announced on Thursday State College-based business Glenn O. Hawbaker Inc. was charged with theft for taking millions of dollars from its workers.
According to Shapiro, Hawbaker underfunded employee retirement accounts of around $15 million within the past five years. Additionally, the company used “phony billing” to inflate health care benefits in order to overstate the value of its health care.
Shapiro said Hawbaker used money intended for employees to pay the pensions of other non-prevailing workers — like company executives — and to fund bonuses.
Contract workers are required to receive a “prevailing wage,” meaning a set wage per hour they are on the job. Workers can receive the full set wage in a paycheck or the money can be split between a paycheck and other fringe benefits like health care. However, Shapiro said the full prevailing wage must ultimately go back to the employees.
According to Shapiro, Hawbaker allegedly took millions of dollars in prevailing wages from employees to be used by company executives.
Shapiro said the company was awarded $1.7 billion in contracts from the Pennsylvania Department of Health from 2003-2018 to complete projects like building roads and bridges.
“During this time, they fleeced workers in order to put more money back into their pockets, they defrauded taxpayers who ultimately paid for these projects and cost honest companies a fair shot at these bids,” Shapiro said in a press conference.
Hawbaker has been charged with four counts of theft related to violating the Pennsylvania Prevailing Wage Act and the federal Davis Bacon Act, which directs the Department of Labor to determine locally prevailing wages rates. Shapiro said Hawbaker can only be charged on theft from 2015 to the present.
According to Shapiro, this is the largest Davis Bacon prevailing criminal wage case in U.S. history.
Shapiro said Hawbaker is cooperating with the investigation. Additionally, he said more companies in Pennsylvania are currently being investigated for employee wage violations.
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