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It what the Office of Attorney General is calling the largest case of its kind yet filed in the U.S., Glenn O. Hawbaker, Inc., of State College, was slapped with theft charges that reportedly violated state and federal wage laws, AG Josh Shapiro said in a press conference Thursday.
While Hawbaker boasted that it provided great employee benefits, in actuality, the company was stealing its workers’ retirement, health, and welfare money.
The firm received an estimated $1.7 billion in funding from PennDOT between 2003 and 2018, Shapiro said.
"They fleeced their workers in order to put more money into their pockets,” Shapiro said.
Shapiro noted that a three-year investigation sparked by worker concerns showed the firm was not abiding by regulations that set legal compensation rates for employees working on construction projects.
Those workers are supposed to receive the set hourly rate in either pay and/or benefits, however, Hawbaker instead siphoned those funds into the accounts of company executives, Shapiro said.
The firm underfunded employee retirement plans by $15 million in the last five years, Shapiro said.
Although investigators determined that the fringe benefit theft had gone on for decades, Hawbaker could only be charged for the last five years due to a statute of limitations, Shapiro said.
Hawbaker stole funds intended for prevailing wage workers’ health and welfare benefits and used them to subsidize the cost of the self-funded health insurance plan that covers all employees.
The firm claimed it paid $18.65 an hour to cover employee health care costs while its actual expense was $6.67, allowing them to pocket a $12 difference, Shapiro added.
"This is the third in a series of prosecutions related to wage theft and misclassification over the last few months – and it isn’t the last," Shapiro noted.
"Too often, the workers that get stolen from are underpaid, have been denied benefits, and have been put into dangerous situations without appropriate training. My Office is committed, with our partners in law enforcement, to keep fighting until workers are treated right."
“I recognize that thousands of people across Pennsylvania are finding out for the first time that they were a victim to this company’s crimes. If you are a worker and you believe that you may have lost out on benefits because of this company’s actions, we want to hear from you,” Shapiro concluded.
“We’ve set a hotline for workers to reach out: (814)-746-3518.”
The charges were filed by Supervisory Narcotics Agent Thomas Moore. The case is being prosecuted by Deputy Attorneys General Philip McCarthy and Lisa Eisenberg, Senior Deputy Attorney General Anthony Forray, and Chief Deputy Attorneys General Nancy A. Walker and Kirsten Heine.
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