District of Columbia Attorney General Brian Schwalb announced that Brothers Mechanical Inc., a Virginia-based construction contractor with major projects across Washington, will pay $1.5 million to resolve allegations that it illegally misclassified hundreds of construction workers, denying them wages and benefits they were owed.
The settlement stems from an investigation by the D.C. Office of the Attorney General (OAG) and covers work performed from 2020 to the present.
According to Schwalb, the company worked on major developments throughout the District, including mixed-use and residential buildings in NoMa at 1200 3rd Street NE, 300 Morse Street NE, 300 M Street NE, and 1150 1st Street NE. Its crews also staffed projects at the Urby development in Navy Yard at 1399 Yards Place SE and at 100 V Street SW in Buzzard Point.
Investigators alleged that Brothers Mechanical secured labor through subcontractors who supplied nearly 500 workers for these job sites.
Schwalb’s office said it found that these workers were labeled as independent contractors even though they performed duties that qualified them as employees under District law. Misclassification meant they did not receive overtime pay for working more than 40 hours a week, were denied paid sick leave, were excluded from unemployment insurance and workers’ compensation protections, and were required to shoulder higher tax burdens than properly classified employees.
A message left for the company by the Informer wasn’t immediately returned.
“D.C. workers are the backbone of our economy, and especially at a time when the cost of living in D.C. continues to rise, I will continue to prioritize ensuring that workers receive the wages and benefits they have earned,” Schwalb said. “This settlement puts money back in the pockets of hundreds of construction workers and sends a clear message that businesses will face consequences when they break the law, cheat workers, and undercut law-abiding competitors.”
According to legal filings, Brothers Mechanical, which provides design, installation, and servicing for heating, cooling, plumbing, ventilation, and related systems, denied wrongdoing but agreed to pay $500,000 in restitution to impacted workers and $1 million in penalties to the District. The company will also be subject to sweeping compliance conditions for the next three years.
Chuck Sewell, marketing director for the International Association of Sheet Metal, Air, Rail, and Transportation Workers Local 100, said misclassification continues to destabilize the construction industry.
“When companies illegally label employees as independent contractors, or misclassify them to a lower standard, they avoid paying proper wages, benefits, workers’ compensation, and payroll taxes,” Sewell stated. “This is all too common in the construction industry, and creates an uneven playing field where law-abiding contractors, who invest in trained workers and follow all regulations, are undercut by those cutting corners.”
Sewell thanked Schwalb and his team for “working to ensure the industry is safe and fair for all contractors and workers in the District.”
Under the settlement, Brothers Mechanical must overhaul its subcontracting practices, require subcontractors to submit weekly certified payrolls, conduct random payroll audits, prohibit retaliation against workers who raise concerns, and train employees to identify potential wage violations.
The company will also be required to provide annual reports to the District documenting subcontractor compliance. These requirements will remain in place for three years.
“This settlement puts money back in the pockets of hundreds of construction workers,” Schwalb said, “and sends a clear message that businesses will face consequences when they break the law, cheat workers, and undercut law-abiding competitors.”