Pennsylvania construction contractor Glenn O. Hawbaker Inc. has pleaded no contest to counts of theft of worker pay—in alleged violation of state prevailing-wage laws—and will pay 1,267 workers restitution of $20.7 million in unpaid wages, Pennsylvania Attorney General Josh Shapiro said.
The company entered its plea to four felony counts of “theft by failure to make required disposition of funds received” on Aug. 3 before President Judge Pamela A. Ruest of the Centre County Court of Common Pleas in Bellefonte, Pa.
[View plea agreement here.]
Hawbaker noted in a statement it did not plead guilty to the charges.
In addition to the restitution, the company also was sentenced to five years’ probation for each count, to run concurrently.
Hawbaker, based in State College, Pa., agreed to oversight by a court-appointed corporate monitor, Alfred B. Robinson Jr.—a former acting administrator for the U.S. Dept. of Labor’s Wage and Hour Division.
According to Shapiro’s office, with a restitution of nearly $20.7 million, the case is the largest prevailing-wage criminal proceeding in U.S. history.
Summary of Charges
The AG’s office said Hawbaker diverted money intended for prevailing-wage workers’ retirement funds to retirement accounts for all of the company’s employees, including its owners and executives.
The company also was charged with shifting funds that were to go for prevailing-wage workers’ health and welfare benefits and using the funds instead to subsidize the cost of a self-funded health insurance plan covering all Hawbaker employees.
Shapiro’s office said the Hawbaker company engaged in “artificially inflating its costs by millions of dollars each year and claiming credit for prohibited costs.”
A state investigation led to an April 8 criminal indictment, which included the charges.
Shapiro's office said Hawbaker received about $1.7 billion in Pennsylvania contracts between 2003 and 2018.
In a statement, the Hawbaker company said it “is pleased to bring this process to a conclusion and focus on the future.”
It said, “Our company’s decision to plead no contest avoids protracted litigation, which could have jeopardized the livelihoods of our dedicated employees.”
The company added, “We continue to believe that we followed all requirements regarding fringe benefits. The fringe benefit practices challenged by the Office of Attorney General were based upon advice provided by the company’s former attorneys.”
It said, “Hawbaker has always intended to properly pay all of its employees.”
The company said state and federal regulators “extensively reviewed” its prevailing-wage practices over the years and found no wrongdoing.
It added, “This led us to believe we were properly following all laws, and we did not plead guilty.”
The company continued, “We fully cooperated in this process and proactively addressed concerns raised by the attorney general’s office. As stated by the attorney general, we are making past and present employees whole.”