What might have been a routine redevelopment deal instead prompted members of the Roseville City Council last month to weigh their oversight responsibilities when it comes to developers reaping tax benefits from the northern suburb.
During a final round of public comment on an arrangement between the city and Reuter Walton Companies, two carpenters stepped forward and detailed abuses they experienced while working on the Minneapolis-based developer’s construction sites.
Samuel Saucedo of Minneapolis and Eric Macias of Rochester say they are still owed thousands of dollars in unpaid wages for work they did on Reuter Walton projects over the course of more than a year.
The two men, who often worked side by side, decided about a year ago to stop accepting jobs arranged by a common “labor broker,” Jose Merino. That included jobs on Reuter Walton sites.
They subsequently filed complaints with the state Department of Labor, but dropped them, Saucedo and Macias told council members Sept. 16, after receiving hostile phone calls from Merino.
In an interview before the public hearing, Macias remembered answering the phone call while his wife, who had recently given birth, looked on.
“You don’t know me. I’ve got money. I’ve got people. Somebody will find you,” Macias remembered hearing. “He said he’s going to kill me and kill my wife and my daughter, just because I want to get paid the money he owes me.”
After the call, Macias’ wife began hiding whenever anybody came to the door. Even when it was Eric.
A shell game with wages
At the public hearing, a representative of Reuter Walton denied any involvement in the allegations made by Macias and Saucedo. The developer has only two minor labor violations on its record, which resulted in fines totaling $1,000, he said.
The developer also claimed to have cut ties with a carpentry subcontractor that, workers say, did business with Jose Merino, Caliper Building Systems.
But Jorge Duran, a representative for the North Central States Regional Council of Carpenters, said a muddled network of contractors, subcontractors and brokers breeds worker exploitation on large construction projects. And it won’t change unless developers are ultimately held accountable.
“Reuter Walton, they claim they don’t know what’s going on, but what does that really tell you?” Duran said. “That’s why the City of Roseville needs to keep an eye on who this developer hires.”
For Saucedo and Macias, trying to get paid for their work on Reuter Walton projects was a demoralizing cycle that left them spiraling further and further into debt. Subcontractors would say they were waiting to get paid by the contractors; contractors would say they had paid the subcontractors in full.
Macias said he finally approached a Reuter Walton representative. “I said, ‘I’m at your jobsite every day, seven days a week, 12 hours a day. Why don’t you guys pay us?’” Macias remembered. “He said I don’t know. So you go to Caliper, and they say I don’t know. You go to Jose, he says I don’t know.”
Macias said he remains over $9,000 in debt.
Unsafe working conditions, unsafe living conditions
Wage theft wasn’t the only abuse workers recruited by Jose Merino say they experienced. Saucedo said his two teenage sons found work with Merino, despite being minors. (They weren’t paid either.)
And safety wasn’t even an afterthought, Saucedo added, resulting in “a lot of injuries.”
Merino “never provided safety equipment for us – no glasses, harnesses, hardhats, gloves, nothing,” Saucedo said. “People used to get shot with the nail gun, and he wouldn’t pay the hospital bills.”
Workers say Merino recruits them to move to the Twin Cities – Saucedo relocated from North Dakota, Macias from California – with promises of housing for themselves and their families, in three-bedroom, two-bathroom apartments.
The apartments turned out to be real, Saucedo and Macias said, but there were more than a dozen other construction workers already living in them.
And while he didn’t always get paid by Merino, Saucedo added, Merino never failed to collect the $300-per-week rent.
“I would work 70 hours per week, and he would pay me for 45,” Saucedo said. “And he would never pay me overtime.”
Both Saucedo and Macias regret ever moving to the Twin Cities.
“You drive with your family downtown Minneapolis, see so many big Reuter Walton signs,” Macias said. “It makes me really mad. I can’t believe they aren’t paying people.”
Union steps up pressure
Since walking away from Merino a year ago, Saucedo and Macias have joined the Carpenters union. Macias laughed when asked about the difference between working for Merino and working union. “It’s unbelievable,” he said.
But the two have also provided union representatives like Duran a window into the shadowy world of nonunion construction. Duran said he has talked to at least 150 other workers, many of whom are immigrants, who have experienced exploitation and wage theft at the hands of a labor broker.
“This is a very bad, infected virus in construction right now,” Duran said. “And it’s happening all across the state.”
In Roseville, council members didn’t go so far as to dump the redevelopment deal with Reuter Walton, but they did add language allowing the city to withhold and “claw back” tax financing dollars if Reuter Walton or any of its subcontractors on the project are found guilty of wage theft. And the language will be included in all future development deals.
The Carpenters union, meanwhile, plans to continue shining a light on the stories of Macias, Saucedo and other workers who allege mistreatment on Reuter Walton projects. The union also raised its concerns at a St. Paul City Council meeting in August, briefly putting a zoning change requested by Reuter Walton in jeopardy.
The union’s objective, public affairs director Richard Kolodziejski said, is to prevent future abuses by increasing public scrutiny at every level. Developers know Minnesota has a new wage-theft lawon the books, and both the Attorney General’s Office and the Department of Labor have announced plans to put that new law to good use.
“The enforcement is going to come now,” Kolodziejski said. “The state is going to be holding (developers) accountable, not just the wage broker.
“So we’re going to keep ratcheting this up and, hopefully, tighten things up in our cities.”