State College contractor pleads no contest to wage theft, ordered to pay $20 million in restitution 

Ioannis Pashakis//August 4, 2021

State College contractor pleads no contest to wage theft, ordered to pay $20 million in restitution 

Ioannis Pashakis//August 4, 2021

A State College-based contractor embroiled in one of the largest prevailing wage criminal cases on record, plead no contest to theft and will be paying over $20 million in stolen wages to over a thousand Pennsylvania workers.

Attorney General Josh Shapiro announced that Glenn O. Hawbaker, Inc., one of the largest contractors to complete projects for the state, plead to four felony counts of stealing wages from workers.

From 2003 through 2018, Hawbaker received an estimated $1.7 billion in contracts from the state, Shapiro’s office wrote in a press release.

The contractor admitted in the plea that during those years it took money intended for prevailing wage workers’ retirement funds to contribute to retirement accounts for all Hawbaker employees.

Hawbaker was also charged with stealing funds intended for prevailing wage workers’ health and welfare benefits, using those funds to subsidize the cost of its self-funded health insurance plan for all employees.

The charges were announced in April and came after a three-year investigation into the company’s practices. Investigators said the company disguised the theft for decades by inflating its benefit spending records.

In a written statement to the Central Penn Business Journal, Hawbaker said that it believes it followed all requirements regarding fringe benefits and that the practices challenged by the Office of Attorney General were based on advice provided by the company’s former attorneys.

“Hawbaker has always intended to properly pay all of its employees. Through the years, both state and federal regulators extensively reviewed our Prevailing Wage Act and Davis Bacon Act practices on jobs and did not find any wrongdoing,” the company wrote. “This led us to believe we were properly following all laws, and we did not plead guilty. 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.

Hawbaker pleaded no contest to four felony counts of Theft by Failure to Make Required Disposition of Funds Received. The company was sentenced to five years’ probation and the payment of more than $20 million in restitution to 1,267 affected workers.

As a condition of its probation, Hawbaker will pay for a corporate monitor to oversee its compliance with all state and federal prevailing wage laws and regulations.

“A month ago I met with some of the men and women who had their wages and retirements stolen by Hawbaker — and I told them that we will do everything we can to get them every cent they are owed under the law,” said Shapiro when he announced the plea. “A few minutes ago, I was able to tell them that we made good on that promise.

“We took on one of the largest construction companies in the state, and now 1,267 people will have a better shot at retirement; they will get the paychecks they earned under the law; and they will have their work and their livelihoods protected and respected, instead of ignored.”

Shapiro added that his office has heard from other contractors in the state that this enforcement helps their business by deterring other employers from engaging in similar schemes.

Correction: Hawbaker pled no contest to the charges.