(C) Iowa Capital Dispatch
This story was originally published by Iowa Capital Dispatch and is unaltered.
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Business owner wants to renege on deal to pay workers’ back wages [1]
['Clark Kauffman', 'More From Author', '- October']
Date: 2023-10-05
The owner of an Iowa construction company says he hopes to renege on a court-enforced agreement to pay his workers $128,000 in back wages.
Earlier this year, the U.S. Department of Labor took Seth Woods of Riverdale and his company, Woods Construction & Development of Riverdale, also known as Woods Estates, to civil court over allegations they had failed to pay workers overtime.
Woods Construction is primarily engaged in the business of residential construction and converts bare, unimproved building lots to completed housing that’s ready for occupancy.
The Department of Labor claimed that from April 2020 through April 2022, Seth Woods misclassified employees as independent contractors and then repeatedly paid those workers their regular rate of pay for all hours worked, including time worked in excess of 40 hours per week.
Although the workers were treated as independent contractors, the department alleged, they were all economically dependent upon the company for their employment, with some of the individuals having worked for Woods Construction for 12 years.
“These relationships were, and are, permanent, unless and until the workers voluntarily resign or are terminated,” the department alleged, and none of the workers had the ability to work for any other companies.
Woods Construction, the lawsuit claimed, provided the workers with air compressors, pneumatic nail guns, nails, screws, air hoses, job trailers, saws, lumber, skid loaders and other equipment, which would conflict with their treatment as independent contractors.
The Department of Labor listed 15 workers who, during the two years that were subject to investigation, had allegedly earned a total of $128,430 in unpaid wages.
Woods wants out of consent order
Recently, Woods agreed to a consent order and court judgment that requires his company to pay $128,000 in back wages. The order also requires that going forward Woods must pay his employees one and one-half times their regular rate of pay for any overtime hours they work.
However, Woods said Thursday he hopes to get out of the deal. He told the Iowa Capital Dispatch he only agreed to it to save the expense of a costly court battle, adding that “now I am going to see if I can renege on it” and not pay the $128,000.
“I think we’re going to undo that consent,” he said. “I don’t know how. I mean, I’m just going to say I didn’t know what I was signing.”
Woods said that while the U.S. Department of Labor insisted his workers were full-fledged employees, another arm of the federal government determined his business was ineligible for pandemic-related financial relief due to a lack of employees.
“Iowa can go to hell,” he said. “People like me go to work to pay for the 46 million people in this country that collect food stamps because they’re too lazy to work … It’s like a big witch hunt, kind of like what’s going on with our former president.”
Woods said companies like his routinely classify home-construction workers as independent contractors as a way to save money. “Otherwise,” he said, “the same house would be 100 grand more.”
Recently, a Polk County District Court judge ruled that a different Iowa construction company, Contreras Roofing, owed the state $64,862 in unpaid unemployment-insurance taxes due to the company falsely claiming its workers were not employees but independent contractors.
Contreras Roofing is run by Leonel Contreras of Des Moines.
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