Oconomowoc apartment project workers are getting $1.2 million. Labor laws were violated

Construction companies that worked on a large Oconomowoc apartment development are paying an additional $1.2 million to 142 workers following an investigation of federal labor law violations.

Those subcontractors were hired to help build the 302-unit Hackney House Apartments, which opened in 2022 at the Pabst Farms site. 

Hackney House, developed by Milwaukee-based Mandel Group Inc., was insured by the U.S. Department of Housing and Urban Development − subjecting it to the Davis-Bacon Act, according to a U.S. Department of Labor statement.

The Davis-Bacon Act requires workers on federally assisted construction projects be paid no less than local prevailing wages. 

A Labor Department investigation found the project's prime contractor, Rosemont, Illinois-based McShane Construction Co., violated the act by failing to provide subcontractors with accurate information on wage rates to pay workers in certain job classifications.

A McShane executive didn't immediately respond Monday to the Milwaukee Journal Sentinel's request for comment.

The department's Wage and Hour Division investigated 23 subcontractors − with 13 firms paying 142 workers $1.2 million in prevailing wages, and an additional $30,472 in overtime back wages. 

“Our recovery of an average of $8,694 per worker will benefit these workers and their families financially and make a positive economic impact in their communities,” said Wage and Hour Division Regional Administrator Michael Lazzeri. “Employers on a federally funded project must comply with all federal guidelines for prevailing wages and benefits.”

The division also is doing outreach on prevailing wage compliance. That includes training for employers through the Associated General Contractors of Wisconsin, Wisconsin Builders Association, Associated Builders and Contractors of Wisconsin, and the National Association of Minority Contractors − Wisconsin Chapter.

Workers are being contacted through the University of Wisconsin-Madison School for Workers program, Voces De La Frontera, Workers for Justice Wisconsin and the Mexican Consulate in Milwaukee.

“Unfortunately, we often see violations in the construction industry related to employee misclassification, prevailing wages, overtime pay and the use of subcontractors and laborers who may not understand their rights,” said Wage and Hour Division District Director Kristin Tout.

“The payment of Davis‐Bacon prevailing wages reduces pay discrimination in construction, provides workers with fair wages and better benefits, and promotes economic prosperity in the region," Tout said.

Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram, X and Facebook.